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Category: Food

Published April 17, 2013

The Best Paragraph I Read Today

It’s that time of year where I am reading drafts of term papers. While reading a draft of a paper on ethical consumerism, I came across this great paragraph, probably the best I will read today:

Not only do these alternative food networks [Note: Fair Trade, local, organic, etc. — MFB.] often have high price barriers, they also give rise to a hierarchy among consumers. Those who can afford ethical products are at the top, and cash-strapped families with no other option but to buy generic, mass-produced groceries are seen as morally inferior. Not only can lower-income families not afford these higher quality goods for their personal use, they are also morally chastised for their purchases. Lower class incomes do not enable an expression of values orientated towards a sustainable, fair food production system, however few other forms of activism are available to these communities.  Lower class families are victimized both economically and morally for “choices” that arise merely out of economic need.  Such a hierarchy ignores questions of access and champions individuals who are already members of an elite, privileged community.

Indeed. Moreover, the student quoted above has managed to capture my view that telling the poor to eat local and organic foods is really placing the horse before the cart.

Published April 3, 2013

The Impacts of Commodity Price Volatility in Ethiopia

How does commodity price volatility affect the welfare of rural households in developing countries, for whom hedging and consumption smoothing are often difficult? And when governments choose to intervene in order to stabilize commodity prices, as they often do, who gains the most? This article develops an analytical framework and an empirical strategy to answer those questions, along with illustrative empirical results based on panel data from rural Ethiopian households. Contrary to conventional wisdom, we find that the welfare gains from eliminating price volatility are increasing in household income, making food price stabilization a distributionally regressive policy in this context.

That’s the abstract of an article Chris Barrett, David Just, and I have been working on since 2007, and which has just been accepted for publication by the American Journal of Agricultural Economics.

In this article, we ask the question: What is the effect on rural households of increasing the uncertainty (i.e., volatility) surrounding the prices of the staple crops they produce and consume, holding the levels of those same prices constant? In other words, we isolate the impact of an increase in the variance of a price distribution holding the mean of that price distribution constant, and we look at the effects of the covariance between each pair of prices, since a price never varies alone.

To answer those questions, we use publicly available survey data from rural Ethiopia and study the welfare impacts of volatility in the prices of coffee, maize, beans, barley, wheat, teff, and sorghum.

This article, I think, is my best piece of research so far, and it is not without reason that I used it as my job-market paper this year. It really has everything one wants one’s research articles to have:

Continue readingThe Impacts of Commodity Price Volatility in Ethiopia
Published April 2, 2013

Messing with Markets: Raisin Hell

Since the 1940s raisin farmers have been obliged to make over a portion of their crop to a government agency called the Raisin Administrative Committee. The committee, run by 47 raisin farmers and packers, along with a sole member of the raisin-eating public, decides each year how many raisins the domestic market can bear, and thus how many it should siphon off to preserve an “orderly” market. It does not pay for the raisins it appropriates, and gives many of them away, while selling others for export. Once it has covered its own costs, it returns whatever profits remain to farmers. In some years there are none. Worse, farmers sometimes forfeit a substantial share of their crop: 47% in 2003 and 30% in 2004, for example.

Participation in this Brezhnevite scheme is mandatory. Although a large majority of raisin farmers approved of it by referendum when it started 65 years ago, they have not been formally consulted since. And raisins are just one of 30 products subject to such “marketing orders” overseen by the Department of Agriculture.

From an article in this week’s edition of The Economist.

Since the 1940s? Thirty such marketing orders? I wonder why the asinine crowd who usually delights in braying “Socialiss’!” in this country hasn’t made itself heard on this matter yet.