ReSAKSS ASIA Publications

RESAKSS ASIA PUBLICATIONS

by IFPRI | August 27, 2016

Latest Publications

ReSAKSS ASIA working papers

Rural household welfare in Papua New Guinea: Food security and nutrition challenges
Schmidt, Emily; Fang, Peixun; Mahrt, Kristi. Washington, DC 2022

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Papua New Guinea continues to encourage a policy focus on food and nutrition security. The PNG National Nutrition Policy (2016-2026) and Nutrition Strategic Action Plan (2018-2022) (NSAP) set a path to improve coordination, secure sufficient funding, and improve technical capacity of nutrition-focused pro gram implementation. As policy prioritizes improved nutrition outcomes, it is important to understand the cost that households face of securing a higher level of nutrition. Ensuring a healthy diet that meets nutrition standards is relatively expensive in PNG. The analysis presented in this paper, which uses detailed household food and non-food consumption data suggests that 4/5 of households in the survey sample live below the healthy diet poverty line (which sets a calorie threshold and defines healthy diet nutrition targets). That is, these households do not have the income available (or do not consume sufficient food and non-food goods) to meet their basic needs which includes securing a nutritious diet that meets food based die tary guidelines.
Synopsis: Implications of public investments and external shocks on agriculture, economic growth and poverty in Papua New Guinea: An economywide analysis
Dorosh, Paul A.; Pradesha, Angga. Washington, DC 2022

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Policy simulations utilizing an economy-wide model based on PNG national accounts and survey data highlight the importance of linkages between the agricultural and non-agricultural sectors of the PNG economy.
There are potentially major benefits of increased agricultural productivity for national income and urban households. To reduce rural poverty, however, transport and processing costs must be lowered, as well.
Even if only half of the increase in foreign exchange earnings from the 2022 world energy price shock is absorbed into the PNG economy, the real exchange rate appreciates by 13 percent, reducing incomes from export crops. However, increased domestic demand for non-tradable crops contributes to a 10 percent income gain for the rural poor.
Using a portion of increased oil and natural gas revenues to finance new investments in crop agriculture, processing and transport, provides even greater benefits by spurring real GDP growth and raising real household incomes by an additional 2 to 4 percentage points.
A hypothetical carbon credit arrangement in which PNG reduces deforestation in exchange for funds used to finance cash transfers to the poorest 20 percent of both urban and rural households could raise the incomes of these groups by about 13 percent.
Implications of public investments and external shocks on agriculture, economic growth and poverty in Papua New Guinea: An economywide analysis
Dorosh, Paul A.; Pradesha, Angga. Washington, DC 2022

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Policymakers in Papua New Guinea face difficult choices as to how best to promote economic growth and reduce poverty in the context of vast differences in technology and infrastructure across the country. Fluctuations in world prices of petroleum, minerals, and export crops complicate the management of the economy because of their large impacts on export earnings and government revenues, as well as household welfare. Moreover, other shocks, such as the Covid-19 pandemic that shut down major parts of the economies of PNG and the rest of the world, have far-reaching effects on various economic sectors, as well as the health and welfare of the population.
This paper presents an analysis of investment options in the agricultural sector and the effects of major economic shocks to the PNG economy using an economy-wide computable general equilibrium (CGE) model that provides estimates of the economic linkages between production, household incomes, consumption, investment, and trade. The model’s base data, a Social Accounting Matrix (SAM) for 2019, and many of the parameters are derived from the national accounts, household surveys and other data for PNG. It is important to realize, however, that even though the SAM and model structure provide a framework that guarantees a consistency of many of the assumptions, there remain many uncertainties in the data. Thus, the results presented here should not be interpreted as exact estimates, but only approximations of potential effects of policies and external shocks.
The plan of this paper is as follows. Chapter 2 provides an overview of agriculture and economic growth in PNG over the last two decades, highlighting the declining share of agriculture in GDP despite positive agricultural GDP growth rates and changes in the real exchange rate that have major implications for incentives in the economy. Chapter 3 then presents a summary of the economy-wide model used in the analysis. Details of the model are found in the annexes and in the references included in the paper. Design of the model simulations and model results are discussed in Chapter 4. These simulations cover various investments in agriculture and transport infrastructure, increases in world prices of petroleum and natural gas, price increases for agricultural exports and hypothetical carbon credits tied to a reduction in exports of forestry products. Chapter 5 concludes with a summary of the main findings, policy implications and suggested areas for further work.
Synopsis: Improving agricultural value chain coordination and gender inclusiveness in Papua New Guinea
Kosec, Katrina; Schmidt, Emily; Carrillo, Lucia; Fang, Peixun; Ivekolia, Mark; Ovah, Raywin. Washington, DC 2022

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Maximizing efficiency throughout the entire agri-food value chain is critical to fostering greater economic growth and poverty reduction in Papua New Guinea (PNG). Investments in midstream value chain infrastructure (e.g., improved storage facilities, rural feeder roads, electricity, and cold storage transport) are crucial to strengthen linkages between producers and consumers. These investments should also promote inclusive development that benefits both men and women value chain actors. In this study, we analyzed three key value chains in Papua New Guinea—poultry, sweet potato, and fresh vegetables—aiming to guide policymakers and stakeholders toward ways to improve productivity, increase revenue, and bolster competitiveness and inclusiveness within the agriculture and livestock sectors.
Synopsis: Improving agricultural productivity in Papua New Guinea: Strategic and policy considerations
Benny, Dickson; Benson, Todd; Ivekolia, Mark; Kedir Jemal, Mekamu; Ovah, Raywin. Washington, DC 2022

Abstract | View

In a recent working paper, we examine staple and cash crop production yields in Papua New Guinea (PNG). In doing so, we assess the yield gap (difference between the crop yields farmers commonly obtain and what they might realize with optimal inputs and crop management) for the main staple food crops in PNG. The yield gap for sweet potato is the smallest (1/4 - 1/3 less than attainable yields), while banana shows the largest yield gap at about ¾ less than what might be achieved under intensive cultivation. In addition, we compare PNG agricultural output with areas of similar growing conditions in Indonesia to provide insight into potential investments to further spur agricultural productivity in PNG. Finally, we assess current sector policies in PNG that aim to support agricultural development as an engine for economic growth.

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ReSAKSS Asia Policy Notes

The Ukraine war and its food security implications in Sri Lanka
Thibbotuwawa, Manoj; Dissanayake, Nimesha; Niwarthana, Sachini. Washington, DC 2023

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The Ukraine War has had major implications for food security and food systems across the world given the important role both Russia and Ukraine play in global food, fertilizer, and energy markets. Russia and Ukraine together supply about 12% of global agricultural exports on a caloric basis and over 30% of global wheat exports.1 Fertilizer and energy markets experienced rising prices and supply disruptions as well. The Russia-Ukraine conflict heavily impacted food security in Sri Lanka which is dependent on imports from the Caspian region. The impact of this shock has been compounded for Sri Lanka which has been suffering from a severe economic crisis due to a lack of foreign reserves, a debt default, high inflation, import restrictions, and shortages of critical goods and services. These compound crises have halted Sri Lanka’s progress on economic development and its achievement of the SDGs. Progress had been significant with the share of undernourished population declining from 16.7% in 2001 to 3.4% in 2020.2 During the same period the prevalence of stunting declined from 20.6% to 16%.3 The prevalence of wasting among children under age five declined from 15.9% in 2000 to 15.1% in 2016. Sri Lanka was ranked 65th out of 116 countries on the Global Hunger Index and 77th out of 113 countries on the Global Food Security Index in 2022 suggesting the need for some improvements in the food system. The latest food security assessment by the World Food Program (WFP) notes that about 30% of the population of 22 million (6.26 Mn people) are food insecure.4 Further, most households are regularly employing food-based coping strategies such as eating less preferred and less nutritious food and reducing the amount of food they eat. Further, an estimated 200,000 households are using emergency livelihood coping strategies that are likely to severely impact their income-generating activities and it is anticipated that more people are turning to these coping strategies as the crisis deepens. Against this backdrop, this policy brief explores the impacts of the evolving crisis in Ukraine on the nexus of poverty, agriculture, and food security in Sri Lanka and the possible avenues for mitigating the negative implica-tions of export restrictions, rising import costs, and inflation.
The Ukraine war and its food security implications for India
SJ, Balaji; Babu, Suresh Chandra. Washington, DC 2022

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Russia’s war on Ukraine shows no signs of subsidence. Its economic and societal adversities have already been felt worldwide but keep evolving, with food and energy being the most affected. Low-income, food-deficit nations importing from these two countries – many of which are in Northern Africa and Western and Central Asia – face critical challenges. The South Asian region, which has grappled with surging commodity prices and supply constraints even before the war, is likely to witness further inflation with rising food and oil prices. India is home to around 18% of the world’s population and accounts for 74% of the South Asian population. It is predicted to be the fastest-growing big economy this year. The country’s central bank (RBI) predicts that GDP will grow by 7.5% in FY 2022-23 (RBI, 2022), while many international organizations forecast growth between 6.4% and 8.2% (ADB, 2022; IMF, 2022; United Nations, 2022; World Bank, 2022). Still, in the wake of the ill effects of COVID-19, the country’s dependence on imports such as oil, fertilizers, and edible oils, and given surging domestic food and nonfood inflation in recent months, raises concerns about economic stability and possible interventions that might curtail fragility. The country consumes around 5 million barrels of crude oil daily but imports over 89% of its requirement from overseas. Crude oil prices have increased by 27% in just four months since the start of the war (February- June 2022). Edible oils have similarly increased, with palm and soybean oil prices rising by around 14% and 18%, respectively. The price of sunflower seed oil has increased by 42%, of which 86% originates from Ukraine and Russia. Fertilizer import dependency from the conflict regions is also sizeable. Russia was the 5th largest supplier of fertilizers to India in 2021-22, and Ukraine and Belarus were the 9th and 10th largest suppliers. The rise in prices of both finished fertilizers and fertilizer inputs has prompted the Government to double the fertilizer subsidy budgeted earlier this year. This policy brief investigates India's susceptibility to the war's disruptions and higher prices for commodities where import dependence is high. It then discusses potential income, food, and nutritional impacts on farmers, the poor, and the vulnerable. It also evaluates the Government’s policy measures such as subsidization, social safety nets, and trade diversification to reduce the impact of the war. Finally, it explores the market opportunities the conflict has created and the required structural reforms that would equip the country to handle such shocks in the future
Synopsis: Implications of public investments and external shocks on agriculture, economic growth and poverty in Papua New Guinea: An economywide analysis
Dorosh, Paul A.; Pradesha, Angga. Washington, DC 2022

Abstract | View

Policy simulations utilizing an economy-wide model based on PNG national accounts and survey data highlight the importance of linkages between the agricultural and non-agricultural sectors of the PNG economy.
There are potentially major benefits of increased agricultural productivity for national income and urban households. To reduce rural poverty, however, transport and processing costs must be lowered, as well.
Even if only half of the increase in foreign exchange earnings from the 2022 world energy price shock is absorbed into the PNG economy, the real exchange rate appreciates by 13 percent, reducing incomes from export crops. However, increased domestic demand for non-tradable crops contributes to a 10 percent income gain for the rural poor.
Using a portion of increased oil and natural gas revenues to finance new investments in crop agriculture, processing and transport, provides even greater benefits by spurring real GDP growth and raising real household incomes by an additional 2 to 4 percentage points.
A hypothetical carbon credit arrangement in which PNG reduces deforestation in exchange for funds used to finance cash transfers to the poorest 20 percent of both urban and rural households could raise the incomes of these groups by about 13 percent.
Synopsis: Improving agricultural value chain coordination and gender inclusiveness in Papua New Guinea
Kosec, Katrina; Schmidt, Emily; Carrillo, Lucia; Fang, Peixun; Ivekolia, Mark; Ovah, Raywin. Washington, DC 2022

Abstract | View

Maximizing efficiency throughout the entire agri-food value chain is critical to fostering greater economic growth and poverty reduction in Papua New Guinea (PNG). Investments in midstream value chain infrastructure (e.g., improved storage facilities, rural feeder roads, electricity, and cold storage transport) are crucial to strengthen linkages between producers and consumers. These investments should also promote inclusive development that benefits both men and women value chain actors. In this study, we analyzed three key value chains in Papua New Guinea—poultry, sweet potato, and fresh vegetables—aiming to guide policymakers and stakeholders toward ways to improve productivity, increase revenue, and bolster competitiveness and inclusiveness within the agriculture and livestock sectors.
Synopsis: Improving agricultural productivity in Papua New Guinea: Strategic and policy considerations
Benny, Dickson; Benson, Todd; Ivekolia, Mark; Kedir Jemal, Mekamu; Ovah, Raywin. Washington, DC 2022

Abstract | View

In a recent working paper, we examine staple and cash crop production yields in Papua New Guinea (PNG). In doing so, we assess the yield gap (difference between the crop yields farmers commonly obtain and what they might realize with optimal inputs and crop management) for the main staple food crops in PNG. The yield gap for sweet potato is the smallest (1/4 - 1/3 less than attainable yields), while banana shows the largest yield gap at about ¾ less than what might be achieved under intensive cultivation. In addition, we compare PNG agricultural output with areas of similar growing conditions in Indonesia to provide insight into potential investments to further spur agricultural productivity in PNG. Finally, we assess current sector policies in PNG that aim to support agricultural development as an engine for economic growth.

More ReSAKSS Asia Policy Notes

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