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Market Level Effects of World Food Program Local and Regional Procurement of Food Aid in Africa

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  • Zavale, Helder
  • Myers, Robert
  • Tschirley, David

Abstract

This paper assesses the impact of local and regional procurement (LRP) of food aid on local market prices in Africa. In particular we study maize in Uganda and Mozambique and beans in Ethiopia. Two complementary modelling approaches are employed: a vector autoregression (VAR) and a computational model (CM). The VAR is a reduced-form econometric approach while the CM is a structural simulation approach. Using two different approaches provides a useful consistency check. Results from the VAR show average price increases brought about by LRP are statistically significant and range from 2% to 16%. The size of the average estimated price effects are economically meaningful for maize in Uganda but much smaller (though still statistically significant) for maize in Mozambique and beans in Ethiopia. In all three country applications, LRP is estimated to have no effect on price variability. Results from the CM fall within a 90% confidence bound around results obtained from the VAR.

Suggested Citation

  • Zavale, Helder & Myers, Robert & Tschirley, David, 2015. "Market Level Effects of World Food Program Local and Regional Procurement of Food Aid in Africa," 2015 Conference, August 9-14, 2015, Milan, Italy 211862, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae15:211862
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    File URL: http://purl.umn.edu/211862
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    References listed on IDEAS

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    1. T. S. Jayne & Robert J. Myers & James Nyoro, 2008. "The effects of NCPB marketing policies on maize market prices in Kenya," Agricultural Economics, International Association of Agricultural Economists, vol. 38(3), pages 313-325, May.
    2. Nicole M. Mason & Robert J. Myers, 2013. "The effects of the Food Reserve Agency on maize market prices in Zambia," Agricultural Economics, International Association of Agricultural Economists, pages 203-216.
    3. Uregia, Nigussie Tefera & Desta, Mulat Demeke & Rashid, Shahidur, 2012. "Welfare Impacts of Rising Food Prices in Rural Ethiopia: a Quadratic Almost Ideal Demand System Approach," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 124861, International Association of Agricultural Economists.
    4. Karanja, Daniel David & Renkow, M. & Crawford, E.W., 2003. "Welfare effects of maize technologies in marginal and high potential regions of Kenya," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 29(3), December.
    5. Myers, Robert J. & Piggott, Roley R. & Tomek, William G., 1990. "Estimating Sources Of Fluctuations In The Australian Wool Market: An Application Of Var Methods," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 34(03), December.
    6. Tschirley, David L. & del Castillo, Anne Marie, 2007. "Local and Regional Food Aid Procurement: An Assessment of Experience in Africa and Elements of Good Donor Practice," Food Security International Development Working Papers 54562, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    7. Tschirley, David L. & del Castillo, Anne Marie, 2007. "Local and Regional Food Aid Procurement: An Assessment of Experience in Africa and Elements of Good Donor Practice," Food Security Collaborative Working Papers 54486, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    8. Tefera, Nigussie, 2012. "Welfare Impacts of Rising Food Prices in Rural Ethiopia: a Quadratic Almost Ideal Demand System Approach," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126698, International Association of Agricultural Economists.
    9. Lentz, Erin C. & Passarelli, Simone & Barrett, Christopher B., 2013. "The Timeliness and Cost-Effectiveness of the Local and Regional Procurement of Food Aid," World Development, Elsevier, vol. 49(C), pages 9-18.
    10. Garg, Teevrat & Barrett, Christopher B. & Gómez, Miguel I. & Lentz, Erin C. & Violette, William J., 2013. "Market Prices and Food Aid Local and Regional Procurement and Distribution: A Multi-Country Analysis," World Development, Elsevier, vol. 49(C), pages 19-29.
    11. Alexander Benkwitz & Michael Neumann & Helmut Lutekpohl, 2000. "Problems related to confidence intervals for impulse responses of autoregressive processes," Econometric Reviews, Taylor & Francis Journals, vol. 19(1), pages 69-103.
    12. Jayne, T. S. & Strauss, John & Yamano, Takashi & Molla, Daniel, 2001. "Giving to the Poor? Targeting of Food Aid in Rural Ethiopia," World Development, Elsevier, vol. 29(5), pages 887-910, May.
    13. Blough, Stephen R, 1992. "The Relationship between Power and Level for Generic Unit Root Tests in Finite Samples," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 7(3), pages 295-308, July-Sept.
    14. Sims, Christopher A & Stock, James H & Watson, Mark W, 1990. "Inference in Linear Time Series Models with Some Unit Roots," Econometrica, Econometric Society, vol. 58(1), pages 113-144, January.
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    Keywords

    Food Consumption/Nutrition/Food Safety; Food Security and Poverty; International Development;

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