Governance, Institutions, and Macroeconomic Policies

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While the term "food policy" is often interpreted to mean sectorial, micro, or meso policies, food systems are strongly influenced by macroeconomic policies, as illustrated by the cases in this section. Institutions enter into food systems in a variety of ways at local, national, and international levels, and institutional innovation is a critical element of effective policy design and implementation. The cases discuss these issues and the related role of governments, along with the impact of instability and armed conflict on food security and lessons for government action.


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Now showing 1 - 10 of 11
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    Brain Drain of Health Professionals in Tanzania
    Juma, Adinan; Kangalawe, Allen G.; Dalrymple, Elizabeth; Kanyenda, Tiwonge (CUL Initiatives in Publishing (CIP), 2012)
    Migration of health professionals worldwide has resulted in an unequal distribution of medical staff globally. The movement of medical staff out of some developing countries, often termed brain drain, affects the health care system at multiple levels, including both doctors and nurses. Medical staff are leaving their countries because of both push and pull factors. Pull factors include better remuneration and working environment, job satisfaction, and prospects for further education. Push factors include lack of education opportunities, poor working environment, poor infrastructure, and lack of diagnostic equipment. Apart from push and pull factors, the mobility of medical professionals is influenced by their links to the receiving countries. This movement of medical professionals leaves the sending country not only with a shortage of medical professionals, but also increased morbidity and mortality. Without medical personnel, there cannot be timely diagnosis and intervention in the course of disease. Currently there is a global shortage of 4.25 million health care workers, with Sub-Saharan Africa alone in need of more than half of these workers (WHO 2006a). This shortage is fueled in part by the brain drain of medical personnel. As of 2006, Tanzania, with a population of 40 million, had only 1,264 doctors working in the country and 1,356 doctors working abroad. Tanzania will need to triple its number of doctors if it is to achieve the Millennium Development Goals of reducing child mortality and improving maternal health. The crisis of health workers is one of the most significant obstacles to improving the health system in Tanzania and other African countries. The global workforce crisis can be tackled if there is global responsibility, political will, financial commitment, and public-private partnerships for country-led and country-specific interventions that seek solutions beyond the health sector. Only when enough health workers can be trained, sustained, and retained in Sub-Saharan African countries will the region attain the Millennium Development Goals. Your assignment is to advise the government of Tanzania and other developing countries on a policy to attract health workers to clinical settings within their home countries, taking into account the interests of the important stakeholder groups.
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    Implementing a Decentralized National Food and Nutrition Security System in Brazil
    Kepple, Anne W.; Maluf, Renato S.; Burlandy Luciene (CUL Initiatives in Publishing (CIP), 2012)
    Brazil entered the new millennium with a stabilized economy and a better-nourished population enjoying greater access to health care and education than in the past. Economic growth and a strong government commitment to decreasing poverty and inequality during the first decade of the 2000s made it possible for Brazil to anticipate achievement of the Millennium Development goal of reducing extreme poverty by half by 2015 (CONSEA 2009a, b), with a concomitant 25 percent decrease in the prevalence of hunger (IBGE 2010a). A major factor in these advances was the Zero Hunger strategy, composed of an integrated set of actions spanning 19 ministries and secretariats, with poverty alleviation serving as one key aspect of a much broader approach to promoting food and nutrition security. Aiming to consolidate the gains of the past decade, the president of Brazil signed a presidential decree in August 2010 outlining directives for the development of a National Food and Nutrition Security Plan and other steps necessary to implement the National Food and Nutrition Security System, founded on decentralized policy implementation and decision making. More than two decades of social mobilization to fight hunger and a constitutional commitment to decentralized decision making, combined with the concerted effort on the part of government and civil society during the past decade, have laid the groundwork for a decentralized food and nutrition security system. The federal government's intersectoral approach and close collaboration with the National Council on Food and Nutrition Security (CONSEA), an advisory council with a direct institutional link to the executive branch and broad representation from civil society as well as key government sectors and programs, has proven to be a successful model at the federal level. The challenge now is to replicate this model at the state and local levels, define responsibilities of the three levels of government, and find the right balance of inducements and obligations. The presidential decree charges an interministerial governmental body with formulating the first National Food and Nutrition Security Plan, followed by the promotion of state and municipal food and nutrition security plans. Although the federal government is committed to decentralized control and recognizes that too many rules and regulations can interfere with the flexibility needed to adapt to local political-institutional arrangements, it requires instruments to fulfill its mandate to implement the law and monitor actions at the local level. What directives and instruments would you recommend be included in the national plan to meet this challenge?
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    The Role of Government in the Labeling of GM Food
    Emma, Camille (CUL Initiatives in Publishing (CIP), 2010)
    Food labels embody a range of attributes: a salad bag may be organic, a yogurt may be low fat, and potato chips may be all natural. Each year, food companies create new and innovative labels to market their products. In 2008 in the United States, 22,566 new food products were introduced to the market. More than 100,000 types of food products line the shelves of supermarkets and wholesale stores (Economic Research Service, USDA 2009c). With so many different foods and labels, how do consumers make choices, and who ensures that these labels are trustworthy and helpful to consumers? The U.S. government created the Food and Drug Administration (FDA), a regulatory agency responsible for assuring that foods sold in the United States are safe, wholesome, and properly labeled (FDA 2008). The FDA works with Congress, the United States Department of Agriculture (USDA), the Environmental Protection Agency (EPA), and other governing bodies to set food-labeling standards. The FDA does not preapprove labels but has the right to request changes or removal of labels that do not meet its specifications. Therefore, food manufacturers have some freedom in labeling and can work creatively to provide consumers with the information needed to make purchasing decisions (FDA 2008). Opinion polls in the early 2000s suggested that the majority of U.S. consumers want to know if their food products contain genetically modified material. GMOs, or genetically modified organisms, are the result of gene transfer technology. They are used in agriculture to create plants with traits that are desirable to farmers, consumers, or other food system parties. The United States has no government-sponsored food-labeling schemes that state whether or not food products contain GM material. Government regulations do, however, prohibit the presence of genetically engineered material in food that carries the government-approved label assuring that food is produced using organic production processes. Thus, consumers who wish to avoid GM material can buy organic food. Another option for consumers who do not want to buy food that may contain GMOs is to select foods labeled GMO-free. Such labeling is organized by civil society groups and food companies. To carry the label, foods must comply with standards set by the organizers. The government does not regulate the label but may intervene if there is evidence that the label is misleading. A new initiative for voluntary labeling of GMO-free food raises the question of what role—if any—the government should play in monitoring and implementing labeling related to GMOs. Your assignment is to advise the U.S. government on whether it should engage in the labeling of GMO or GMO-free foods or monitor voluntary labeling organized by the private sector and civil society, and if so, how it should proceed. Would you give the same advice to a developing country? If not, how would it differ?
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    Development Strategies, Macroeconomic Policies, and the Agricultural Sector inZambia
    Resnick, Danielle; Thurlow, James (CUL Initiatives in Publishing (CIP), 2008)
    At its independence in 1964, Zambia, a landlocked country in Southern Africa, was perceived to have a bright future. The country was endowed with vast natural resources, including favorable agroecological conditions and large copper deposits. Within two decades, however, the country descended into a macroeconomic crisis. Agriculture and rural incomes stagnated and industry was collapsing, leading to severe poverty and malnutrition. This case study examines how Zambia's different development strategies led first to a macroeconomic crisis in the 1980s and then to economic recovery in the late 1990s. More specifically, it focuses on the interplay between macroeconomic and sectoral policies and draws attention to how policies and stakeholder interests at different levels of an economy must work synergistically if a development strategy is to be sustainable and achieve its objectives. Zambia's government first adopted a strategy of state-directed industrialization. Bolstered by copper revenues and the political influence of urban dwellers, this strategy favored urban industry over agriculture and rural development. When world copper prices collapsed, however, the country plunged into macroeconomic crisis and the sectoral policies underlying state-directed industrialization became unsustainable. Driven by pressures from domestic political constituents and international donors, Zambia became a multiparty democracy in 1991 and elected a government that favored a strategy of market-driven development. The country eventually achieved macroeconomic stability by curtailing sectoral investments and subsidies, but with mixed consequences for national welfare and agricultural producers. Zambia has recently experienced a period of renewed growth and poverty reduction. Yet just as falling copper prices forced Zambia to undergo market-oriented reforms, the recent boom in world copper prices could provide incentives to return to a more interventionist development strategy. To implement such a strategy, however, the government would have to raise taxes on foreign mining companies, which now own Zambia's previously state-owned mines. This case study focuses on trade-offs from raising mining taxes and possible implications for agriculture and the food system. Given the current political environment and taking into account the mechanisms through which a change in world copper prices affects the agricultural sector, your assignment is to advise Zambia's government on how it might use the revenues gained from increasing mining taxes to improve economic growth and reduce poverty.
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    Coffee, Policy, and Stability in Mexico
    Ávalos-Sartorio, Beatriz (CUL Initiatives in Publishing (CIP), 2007)
    The fact that poor people will resort to violence to change the political and economic system that they believe is responsible for their poverty is not new. The link between poverty, violence, and instability has started to figure prominently in the agenda of strategic discussions in global fora and national governments, sparked by the increased sense of threat from terrorism felt by societies in developed countries. Analysts seem to agree that poverty, combined with a long list of factors, including ethnic disparities, social and economic inequalities, and resource disputes, can prepare the ground for conflict. Although poverty itself does not cause violent conflict, it does provide a basis for it. This case study is about the probable link between poverty and violent social uprisings in rural Mexico. It illustrates how the sudden exacerbation of poverty and exclusion, provoked largely by the implementation of market liberalization policies, may have been the trigger that led thousands of people to turn to violent rebellion against the rule of law, with immense and far-reaching social, economic, and political costs. In the early 1990s, coffee-producing populations in southern Mexico, already living in poverty and in generally marginal conditions, suddenly and simultaneously experienced a precipitous reversal of cash flows and an alteration in their usual paths of economic exchange. These changes resulted partly from an institutional change that happened too fast. The 1989 collapse of the International Coffee Agreement and the 1990 dismantling of the Mexican Coffee Institute triggered a sudden drop in coffee prices and disarray in domestic coffee markets that destabilized the economies of thousands of coffee-producing households. This case study argues that the suddenness and magnitude of the so-called coffee crisis that ensued may help explain when, how, and why two paramilitary armies with strong backing from the local population made their first public and violent appearance in the Mexican countryside in the mid- 1990s. Through this real-life example, this case study aims to stimulate thinking about what went wrong with policy and discussion on what can be done, or done better, by stakeholder groups to achieve both poverty and stability goals. The assignment is to identify key lessons learned for the design and implementation of government action in situations similar to the one described in this case.
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    Biosafety, Trade, and the Cartagena Protocol
    Cheng, Fuzhi (CUL Initiatives in Publishing (CIP), 2007)
    Global production of genetically modified (GM) agricultural commodities has increased significantly in the past decade. Some people see GM crops as offering new hope in addressing some of the most serious problems that poor people in developing countries face, such as hunger and malnutrition. Others see them as creating unpredictable health and environmental problems and having negative economic repercussions. The proliferation of domestic biosafety measures has increasingly affected international trade in GM products and led to trade disputes. Although WTO member countries can make their own decisions regarding GM products at the national level, domestic legislation must be WTO-consistent to the extent of not adversely affecting international trade. In this respect, other legal documents, notably the multilateral environmental agreements (MEAs), also play a role. The Cartagena Protocol on Biosafety is the MEA that deals with transboundary movement of GM products. The interaction between the Protocol and the WTO rules adds challenges to an already complex scenario of international trade. A number of conflicts exist between the Protocol and the WTO rules. These conflicts boil down to the fundamental issue of which rules should prevail when trade disputes related to GM products arise. This issue lies at the heart of the perceived conflict between trade liberalization and environmental protection and was heatedly debated among different interest groups during the negotiation of the Protocol. The “Miami Group,” representing major agricultural exporters including the United States, holds the view that the WTO agreements are the only law applicable in resolving trade disputes over GM products. They fear that non-WTO agreements (such as the Protocol) may give an importing country excuses to limit trade in GM products. Potential loopholes in the Protocol could also allow a country to favor domestic GM production over imports, or GM product imports from some countries over others. The Miami Group thus favors the inclusion in the Protocol of a “savings clause,” which could, in effect, save provisions of the WTO agreements from being overcome by those of the Protocol. The European Union (EU) and most developing countries, on the other hand, argue that the Protocol should be invoked in defense against WTO claims. They support a comprehensive Protocol in light of the unknown effects of GM products on the environment and human health. Because food scandals in recent years have deeply shaken consumer trust in food safety, the EU in particular calls for a strong statement of the precautionary principle as provided in the Protocol. To resolve its potential conflicts with the WTO provisions, the Protocol contains a “savings clause,” which recognizes the importance of existing international agreements. Meanwhile, it calls for the mutually supportive functioning of trade and environmental agreements with a view to achieving sustainable development. The Protocol also provides different procedures and documentation requirements in dealing with different types of living modified organisms (LMOs). Your assignment is to recommend changes in either the Protocol or the WTO agreements that would mitigate the conflicts between GM commodity trade and environmental protection, taking into account the positions of the key stakeholder groups.
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    The Sugar Controversy
    Vio, Fernando; Uauy, Ricardo (CUL Initiatives in Publishing (CIP), 2007)
    Sugar, one of the world's most important food commodities, provides a high percentage of calories for the population in many countries. But consumption of calories either as sugar or fat by sedentary populations promotes overconsumption of energy and thus may contribute to the “globesity” epidemic and associated chronic diseases. In addition, sugar provides only energy (“empty calories”), potentially leading to micronutrient inadequacy, with corresponding health consequences. The “sugar controversy” has its roots in an expert consultation held in early 2002 by the World Health Organization (WHO) and the Food and Agriculture Organization of the United Nations (FAO) on diet, nutrition, and physical activity for the prevention of chronic disease. This consultation produced a report (Technical Report Series No. 916, or TRS 916) that focused on the dietary and physical activity determinants of major chronic diseases and established the scientific basis for prevention of these conditions (WHO/FAO 2003). As part of the response to the global epidemics of diabetes and obesity (“diabesity”)—major threats to the lives and well-being of populations across the globe—TRS 916 recommended limiting the population's mean intake of added sugars to 10 percent or less of total energy (Nishida et al. 2004). Sugar producers and sugar-exporting countries raised immediate concerns about the consequences of this recommendation for future markets. The recommendation was challenged on the strength of the evidence, its scientific merit, and the assumptions made; the sugar recommendation became the focus of a debate between the nutrition community, the sugar industry, and agricultural policy experts. The two positions contrasted the potential health gains with the economic implications of limiting sugar consumption. This case raises several interesting issues that have wider implications, given that food policy is increasingly being shaped by health and nutrition considerations rather than solely by the economics of agricultural production. This case study analyzes the controversy from the perspective of health and nutrition consequences and presents policy options considering the potential trade-offs for agriculture. Despite the controversy raised by TRS 916, in May 2004, 191 countries at the World Health Assembly adopted the WHO global strategy on diet and physical activity prevention of chronic disease, based on the recommendations of TRS 916, which include the need to restrict sugar intake to no more than 10 percent of total energy intake. Most governments are now implementing this strategy to varying degrees, driven by the urgent need to cope with the increasing problems of obesity, diabetes, and related chronic diseases. In addition, interesting economic alternatives to sugar production are presently being explored. The apparent threat to agriculture offers the possibility of shifting agricultural production from sugar cane to products with greater added value, such as fruits and vegetables. The WHO strategy is actively promoting the production of fruits and vegetables, which favors health, to prevent chronic disease. In addition, the potential use of sugar cane in the production of ethanol as a biofuel demonstrates the need to examine new opportunities in agricultural production that can yield win-win situations for farmers in developing countries. Your assignment is to recommend a position in the sugar controversy to the government of a developing country that faces not only rapidly increasing overweight, obesity, and associated chronic diseases, but also dependence on sugar exports for foreign exchange.
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    The WTO Dispute Settlement Mechanism and Developing Countries: The Brazil–U.S. Cotton Case
    Cheng, Fuzhi (CUL Initiatives in Publishing (CIP), 2007)
    The Dispute Settlement Mechanism (DSM) of the World Trade Organization (WTO) is often seen as one of the major achievements of the multilateral trading system. Many believe that the WTO DSM has introduced greater “legalism” and provides a more “rules-oriented” system relative to the “power-oriented” one of the General Agreement on Tariffs and Trade (GATT). Indeed, since its inception in 1995, more and more developing countries have used this system to pursue their trading rights. More important, trade disputes recently resolved through the WTO DSM have involved successful challenges, by developing countries, to certain unfair trade practices of developed countries, including the Brazilian challenge to U.S. cotton subsidies. Cotton production and trade are highly distorted by policy. Since the late 1990s cotton subsidies in the United States have been frequently criticized for driving down world prices. The continued depression of the world cotton price has made this commodity a hot spot of agricultural trade disputes at the WTO. Citing injury to its domestic cotton industry, Brazil initiated a dispute settlement accusing the United States of provoking and maintaining WTO-inconsistent domestic and trade policies. Relative to the size of national economies, some African countries have suffered far more, but their voice was rarely heard at the WTO DSM. The reluctance of poorer nations to use the WTO DSM to challenge their richer trading partners raises a number of interesting issues. Most fundamentally, it reflects a long-recognized fact that economic and political power still plays an important role in today's world trading system. Because of developing countries' lack of financial, institutional, and human resources, they may find the barriers to using the WTO DSM prohibitively high. For those who manage to enter the DSM or even legally win a case, benefits remain elusive because they can hardly force the losing defendants into compliance. In addition, developing countries risk retaliatory action by rich countries whose trade policies are challenged. This risk is particularly great for the African countries, which are highly dependent on foreign aid from developed countries. Several policy options are offered to address these issues. One way of increasing developing-country access to the DSM is to reduce litigation costs, either by using the legal aid currently offered through the Advisory Centre on WTO Law (ACWL) or by introducing some tailor-made and less-demanding litigation procedures for “small claims.” A mechanism for collecting trade data and the formation of a permanent panel could further reduce dispute settlement costs. During the panel ruling implementation stage, developing countries can build on their retaliatory power by further liberalizing their domestic markets and increasing the export stake of developed countries. Forging alliances with constituencies within the developed countries provides an effective strategy that not only strengthens developing countries' retaliatory power, but also helps them avoid possible political repercussions from the losing party. Your assignment is to propose changes in the WTO DSM that would benefit small, low-income developing countries.
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    Cambodia's WTO Accession
    Cheng, Fuzhi (CUL Initiatives in Publishing (CIP), 2007)
    Since the creation of the World Trade Organization (WTO) in 1995 with 128 members, an additional 21 countries have successfully acceded to the organization. On October 13, 2004, Cambodia became the WTO's 148th member, almost 10 years after it had first applied and just over a year after its membership package was approved at the Cancún Ministerial Conference. Cambodia is the second in the category of least-developed countries (LDCs) to join the WTO, following Nepal's accession on April 23, 2004. In its Protocol of Accession, Cambodia has taken on commitments in two major areas, including market access for imported goods and services and implementation of trade-related rules established in various WTO agreements. Cambodia agreed to bound its tariffs for all imported goods, eliminate export subsidies, allow foreign involvement in services, and apply trade-related rules either upon accession or at specified dates. Cambodia's WTO accession has raised a number of issues that might be of concern to existing WTO members as well as to other applicants. First, the vague definition of membership criteria in the WTO document has resulted in a complex and lengthy accession process. Second, countries seeking membership usually have to agree on higher obligations but limited rights, a phenomenon referred to as the WTO+ commitments and WTO– rights. Third, the special and differential treatment (SDT) provisions in various WTO documents were not executed fully in the recent accession cases. The existence of these issues has greatly hampered the process of integration of the LDCs to the world economy. A series of concrete steps must be taken to move the world trading system in a more pro-development direction. WTO legal documents should lay out detailed and transparent criteria for accession and make available specific provisions for LDCs compared with other applicants. Developed-country members should also exercise restraint in seeking concessions and commitments on goods and services from acceding LDCs and take into account those undertaken by existing LDC members. The role of SDT should be emphasized, and the SDT as set out in WTO agreements should be applicable to all acceding LDCs from the date of their accession. Accompanying the SDT, targeted and coordinated technical assistance and capacity building should be provided to acceding LDCs to cover all stages of the accession process. Taking into account the interests of the identified stakeholder groups, your assignment is to recommend how the accession process can be streamlined for least-developed countries.
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    Linkages between Government Spending, Growth, and Poverty in India and China
    Fan, Shenggen (CUL Initiatives in Publishing (CIP), 2007)
    The objective of this case study is to present a synthesis of the links between government spending— in areas such as agricultural research and development (R&D), irrigation, rural education, and infrastructure (including roads, electricity, and telecommunications)— and economic growth and poverty reduction in China and India. The findings of this case study are intended to help explain how government spending on key investments can help meet the broader policy goals of improved growth and reduction in poverty through various channels. The study, using a common framework, seeks to broaden and deepen understanding of the mechanisms through which government investment results in pro-poor economic growth. The overall picture for public investment can be summarized as follows: Using state-level data for India over time, the study found that many types of government spending have resulted in reductions in rural poverty, and most have also contributed to growth in agricultural productivity. Different kinds of spending, however, have different effects on poverty and productivity. Rural roads and agricultural research have the largest impact on agricultural growth and poverty reduction. Many investments in rainfed areas of eastern India offer the largest impact on rural poverty, but also contribute to higher growth in comparison with investments in the more-favored irrigated areas. Using provincial data over time, the study shows that for China, government investment in agricultural R&D and rural education have had the largest impact on both growth and poverty reduction. To eliminate the remaining poverty in China, the government should place the highest priority on public investment in western China, where the majority of the poor reside, because the marginal returns to public investments, in terms of poverty reduction, are higher there than in other regions. Your assignment is to recommend a public sector investment strategy for rural infrastructure to be considered by the government of one of the two countries discussed in this case.