1. Trade and Poverty in Rural Africa The role of nutrition, population dynamics, and farm productivity William A. Masters Purdue University www.agecon.purdue.edu/staff/masters Woodrow Wilson Center -- April 15, 2005

2. physical capital –livestock –soils! human capital –nutrition –children social capital –networks (as opposed to markets) –conflict (as opposed to cooperation) How do African farmers respond to shocks?

3. Investment rates depend on both prices and productivity

4. Consumption levels have fallen to be among the world’s lowest Data and projections on childhood underweight, 1995-2015

5. Attribution of disease burden to major risk factors (estimates for high-mortality developing countries, 2000) Undernutrition is the developing world’s leading cause of ill-health

6. Source: FAO (2004), The State of Food Insecurity in the World 2004. Rome, FAO. Stunting by residence and wealth The rural poor are particularly undernourished

7. Poverty is closely linked to institutions and social capital

8. Food-crop output has been a key difference between Africa and Asia

9. More and more Africans have no choice but to be farmers

10. …and Africa’s fertility transition is unusually slow

11. To raise food-crop productivity, Africa has a lot of catch-up to do

12. The pace of farm productivity growth is driven by new-variety adoption

13. …and new varieties come from public R&D investment

14. R&D levels vary across countries but have not grown over time

15. R&D has varied but high payoffs Source: Alston, J.M., M.C. Marra, P.G. Pardey, and TJ Wyatt. 2000. "Research returns redux: A meta-analysis of the returns to agricultural R&D." Australian Journal of Agricultural and Resource Economics, 44(2): 185-215. Estimated return to agricultural research and extension (%/year)

16. …and sustaining sufficient public investment has been difficult!

17. The value of successful food-crop techniques spreads widely among low-income people –Private firms can’t recover costs –Donors have difficulty contracting for appropriate R&D or dissemination efforts …but welfare gains can be measured, so donors could pay innovators after adoption –payments can be proportional to gains –innovators can choose what data to submit –secretariat can spot-check and certify accuracy New funding mechanisms may be helpful

18. . Conclusions To facilitate trade for the poorest people, local food-crop productivity must rise –To improve nutrition, health and schooling –To free resources for other things African farmers face unusual obstacles –Including much less of the public R&D needed to generate appropriate new varieties Donors can and do fund R&D programs directly, but contracting is difficult –A proposd way to facilitate investment is at: www.earth.columbia.edu/cgsd/prizes www.earth.columbia.edu/cgsd/prizes