Macroeconomics, agriculture, and food security: A guide to policy analysis in developing countries

Abstract

Why write a book on macroeconomic policies and their links to agriculture and food security in developing countries? The food price spikes of the years just prior to 2010 and the economic, political, and social dislocations they generated refocused the attention of policymakers and development practitioners on the agricultural sector and food security concerns. But even without those traumatic events, the importance of agriculture for developing countries—and for an adequate functioning of the world economy— cannot be denied. First, although declining over time, primary agriculture still represents important percentages of developing countries’ overall domestic production, exports, and employment. If agroindustrial, transportation, commercial, and other related activities are also counted, then the economic and social importance of agriculture-based sectors increases significantly. Furthermore, large numbers of the world’s poor still live in rural areas and work in agriculture. Through the links via production, trade, employment, and prices, agricultural production is also crucial for national food security. Second, it has been shown that agriculture in developing countries has important growth and employment multipliers for the rest of the economy, and agriculture seems to have larger positive effects in reducing poverty than growth in other sectors. Third, agriculture is not only important for individual developing countries, but it has global significance, considering the large presence of developing countries in world agricultural production and the increasing participation in international trade of those products (these three points will be covered in greater detail in Chapter 1).Chapter 1 Agriculture, Growth, Poverty, and Food Security 3 Chapter 2 Macroeconomic Policies: Some Definitions and Conceptual Issues 31 Chapter 3 Contextual Factors: Country Heterogeneity and Global Economic Conditions 53 Part 2 MACROECONOMIC DATA, BALANCES, AND ADJUSTMENT PROCESSES Chapter 4 Macroeconomic Data 97 Chapter 5 A Simplified Macroeconomic Framework 133 Chapter 6 Macroeconomic Consistency: Main Macro Balances 155 Chapter 7 Macro Balances in Product, Factor, and Asset Markets 195BookPRIFPRI1; CRP2; A Ensuring Sustainable food production; C Improving markets and trade; F Strengthening institutions and governanceMTID; PIMCGIAR Research Program on Policies, Institutions, and Markets (PIM

Transformation of Food Systems: How Can It Be Financed?

“…However, the share for mitigation and adaption in agriculture, forestry, land use, and natural resource management (AFOLU, which is somewhat different from AFF) was far smaller; about 9.1 billion USD, and again multilateral development banks accounted for over two-thirds of that total (CPI, 2020 and its database). Multilateral climate funds (such as the Global Environment Facility, the Green Climate Fund, the Special Climate Change Fund, the Least Developed Countries Fund, the Adaptation Fund, and others [22] ), which receive a lot of attention, provided just 3 billion USD annually for all activities (average of 2017-2018), of which less than 0.8 billion USD was for AFOLU [4,21] .…”

How to Prevent and Cope with Coincidence of Risks to the Global Food System

“…Negative macroeconomic impacts, such as balance-of-payments problems, public deficits, and declining total investment because of uncertainty, influence domestic agricultural and food production as well as food trade and may have second-round effects on poverty and food security (61). In particular, oil prices tend to have significant implications for food systems, as energy used in agricultural production is mostly oil related and oil prices affect prices of fertilizers and chemicals used in crop production (44,62). Macroeconomic volatility can also cause poverty traps and deteriorate human capital (61).…”

“…A major driver of the oil trade embargo were geopolitical developments in the Middle East and responses to conflict, namely the Yom Kippur War. The oil shock led to a significant slowdown in the global economy in 1974 and 1975, with many industrialized economies and close to 40% of the developing countries experiencing recessions (62). At the same time, weather shocks in 1972 affected crops around the world, contracting food production at a time when food demand was on the rise from rapid population growth in developing countries.…”

Exchange rates, remittances, and competitiveness in Haiti

“…The focus then is on the evolution of the nominal ER. That dual role has been at the core of many countries' inconsistent economic programs (see Corden, 1990).…”

“…The level and changes (both actual and expected) of the ER (nominal and real, defined below) have wide influence throughout the economy, affecting and being affected by the demand and supply of traded and nontraded goods and services, the demand and supply of money and monetary assets denominated in local currency in comparison with assets denominated in other currencies, and inflows or outflows of capitals and remittances, among main key variables. In consequence, the ER and ER policies influence growth, employment, inflation, international trade, and banking and fiscal stability (a classical general treatment can be found in Krueger 1983; see also Corden 1990).…”