Economics of Food and Agriculture
Columbia University - Spring 2004
Full title: Economics of Food and Agriculture in Economic Development
Course number: INAF U4325
Class meetings: Tues. 2: 10 – 4:00 pm , IAB 410
Office hours: Thurs. 2:00 – 4:00 pm , Hogan 104 (and other times by appointment)
Instructor : Will Masters
Visiting Professor of International and Public Affairs, Columbia University
www.earth.columbia.edu/cgsd/masters
Professor of Agricultural Economics, Purdue University
www.agecon.purdue.edu/staff/masters
Office location: Center on Globalization and Sustainable Development
The Earth Institute at Columbia University
2910 Broadway (Hogan Hall, room 104)
Email: wm2112@columbia.edu
Phone: 212 854 7633 (office)
646 932 6253 (cell)
Farming is, of necessity, the principal occupation for the world's poorest people, particularly in Africa , South Asia and other low-income regions. With prosperity comes a transition to other activities, but agriculture still employs half of the world's labor force -- and malnutrition remains the world's leading cause of death and disability. This course surveys recent research in economics on how people meet their food needs, and on the role of agriculture in economic development. This material is of particular importance for students interested in Africa , the one region of the world where malnutrition rates are rising and agricultural productivity has been stagnant.
The course begins with an overview of the development process, in terms of the demographic transition and structural transformation from farm to non-farm employment. We then survey economics research on this process from the individual to the global level, in terms of the nutrition and health consequences of extreme poverty, the demand for food as income rises, the resource-allocation decisions of rural households, the market institutions that govern transactions within low-income countries and in world markets, the role of agriculture in economic growth and the agricultural policies of governments across countries and over time. The course concludes with an assessment of how national governments and international institutions can best contribute to the alleviation of extreme poverty in the world.
Course grades will be based on four written assignments, each of which involves the analysis and interpretation of real-life data to explain observed behavior and predict the effects of policy interventions, plus a final exam. Students who have a particular interest in a specific issue, in Africa or elsewhere, may substitute a paper and in-class presentation for the exam, with the instructor's permission. The final exam (or paper) will count for half of the course grade, and the other half will be determined by the four assignments, each of which will count for one-eighth of the course grade.
The course relies mainly on academic journal articles and other sources that are available to you on-line, through the Columbia library or public websites. Live links in the syllabus on CourseWorks will direct you to each reading. There will also be links to the slides used to illustrate each class lecture/discussion.
Students interested in book-length treatments of topics covered in the course are encouraged to buy or browse one or more of the following, which will be held on reserve in the library.
Accessible texts with much useful data in figures and tables
Phillips Foster and Howard D. Leathers. The world food problem: tackling the causes of undernutrition in the Third World (2nd ed.), Boulder : Lynne Rienner, 1999.
Thomas P. Tomich, Peter Kilby and Bruce F. Johnston, Transforming Agrarian Economies. Ithaca : Cornell University Press, 1995 .
Older near-classics that still read well
Yuhiro Hayami and Vernon W. Ruttan , Agricultural Development: An International Perspective. Revised ed. Baltimore : Johns Hopkins University Press, 1985.
C. Peter Timmer, Walter P. Falcon and Scott R. Pearson, Food Policy Analysis . Baltimore : Johns Hopkins University Press, 1983. [ Also available on-line !]
Jean Dreze and Amartya Sen, Hunger and Public Action. New York : Oxford University Press, 1989.
Relevant theory in book form
Partha Dasgupta, An Inquiry into Well-Being and Destitution. New York : Oxford University Press, 1993.
Pranab Bardhan, ed. The Economic Theory of Agrarian Institutions. New York : Oxford University Press, 1989.
Advocacy
Runge, C. Ford, Benjamin Senauer, Philip G. Pardey, and Mark W. Rosegrant (2003), Ending Hunger in our Lifetime: Food Security and Globalization . Baltimore : Johns Hopkins University Press.
Bread for the World (2003), Agriculture in the Global Economy: Hunger 2003 . Washington : Bread for the World Institute www.bread.org . [Online only --not in the library]
In addition to the economic analyses reported in journal articles, the course makes direct use of “live” data from authoritative sources, notably:
World Bank World Development Indicators (for national income and related data)
United Nations Population Projections (for across-country demographic data)
Demographic and Health Surveys (for within-country demographic data )
Food and Agriculture Organization (FAOSTAT) (for data on food and agriculture)
OECD Development Assistance Committee (DAC) (for data on foreign aid)
Lexis-Nexis Academic Universe (for an archive of world news)
The Famine Early Warning System (for determinants of food security)
COURSE OUTLINE AND DUE DATES
(Dates shown are for class on Tuesdays, assignments due on Thursdays at 5:00 pm )
SECTION 1. INTRODUCTION
Week 1. Overview Jan. 20
Demographic transition and structural transformation
Week 2. Food consumption and health Jan. 27
Biological constraints at the margin of subsistence
Week 3. Food demand Feb. 3
Consumption preferences and consumer behavior
1 st exercise due: predicting consumption choices Feb. 5
SECTION 2. HOUSEHOLDS
Week 4. Rural households Feb. 10
What people do when they have few assets, limited markets, and face mortal risks
Week 5. Technology adoption Feb. 17
Are innovations good for the poor? Who adopts innovations, and why?
Week 6. Natural-resource use Feb. 24
What people do when key assets are collectively owned
2 nd exercise due: demographic change and household decisions Feb. 27
SECTION 3. MARKETS
Week 7. Jeffrey Sachs guest lecture Mar. 2
Topic TBA
Week 8. Rural markets: price stabilization and spatial integration Mar. 9
Is it possible (or even desirable) to reduce price fluctuations?
Week 9. Policy and political economy Mar. 23
How and why governments tax or subsidize agriculture
3 rd exercise due: household decisions and market outcomes Mar. 25
SECTION 4. COUNTRIES
Week 10. Agriculture in economic growth Mar. 30
Is agriculture an engine of growth – or the caboose that lags behind?
Week 11. Agriculture in the world economy Apr. 6
Factor endowments, comparative advantage and trade
Week 12. R&D for innovation and technical change Apr. 13
The green revolution, biotechnology, and innovation systems
4 th exercise due: policy choices and market outcomes Apr. 15
SECTION 5. CONCLUSIONS
Week 13. Student presentations Apr. 20
[For those who have chosen to do a research project rather than take the final exam]
Week 14. Wrap-up and conclusions Apr. 27
Final exam (for those who did not do a research project)
READING ASSIGMENTS
(Asterisks signify a “required” reading, meaning that it's likely to be needed for the final exam.)
Session 1. Tuesday - January 20, 2004
Overview: demographic transition and structural transformation
*
Bloom, D.E. and J.D. Sachs, " Geography,
Demography, and Economic Growth
in Africa ," Brookings Papers on Economic Activity 2:207-295,
1998
* Bloom, D.E. and J.G. Williamson, “ Demographic Transitions and Economic Miracles in Emerging Asia .” The World Bank Economic Review , Volume 12, Number 3, September 1998.
* Sachs, J.D., “ Tropical Underdevelopment ” National Bureau of Economic Research Working Paper: 8119, February 2001, 29 pp.
* World Bank (2003), Global Economic Prospects and the Developing Countries 2003 , Chapter 1 (especially “Growth and poverty to 2015”, pages 28-41).
Masters, W.A. and M.S. McMillan, “ Climate and Scale in Economic Growth .” Journal of Economic Growth, vol. 6, no. 3, September 2001, pp. 167-86
World Bank (2001), “ The Nature and Evolution of Poverty ,” Chapter 1 in World Development Report 2001: Attacking Poverty . Washington , DC : The World Bank, pp. 15-29.
World Bank (2003), World Development Indicators
Macro International (2003), Demographic and Health Surveys
Alan Heston, Robert Summers and Bettina Aten, Penn World Table Version 6.1 , Center for International Comparisons at the University of Pennsylvania (CICUP), October 2002 .
Tomich, Thomas P., Peter Kilby and Bruce F. Johnston (1995), "Poverty and the Rural Economy" and "Structural Transformation" (excerpts), in Transforming Agrarian Economies ( Ithaca , NY : Cornell University Press), pp. 9-19 and 35-48.
United Nations (2003), UN Population Projections
FAO (2003), FAOSTAT
Session 2. Tuesday - January 27, 2004
Food consumption and health: Biological constraints at the margin of subsistence
* Fogel, R. W. Economic Growth, Population Theory, and Physiology: The Bearing of Long-Term Processes on the Making of Economic Policy ” The American Economic Review, Vol. 84, No. 3. (Jun., 1994), pp. 369-395.
* Deaton, A., “Health, Inequality, and Economic Development.” Journal of Economic Literature, XLI(1), March 2003: 113–158.
* Strauss, J., and Thomas, D. (1998). “Health, Nutrition, and Economic Development”. Journal of Economic Literature , 36(2):766-817.
UN Standing Committee on Nutrition (2000) Fourth Report on the World Nutrition Situation . Geneva : ACC/SCN in collaboration with IFPRI.
Arcand,
Jean-Louis, (2001), “ Undernourishment
and Economic Growth ”, FAO
Economic and Social Development Paper 147. Rome
: FAO.
Mark H. Beers and Robert Berkow, eds., The Merck Manual of Diagnosis and Therapy. Section 1. Nutritional Disorders .
Session 3 . Tuesday - February 03, 2004
Food demand: Consumption preferences and consumer behavior
* Masters, W.A. and D. Sanogo, “ Welfare Gains from Quality Certification of Infant Foods: Results from a Market Experiment in Mali .” American Journal of Agricultural Economics, vol. 84, no. 4, November 2002, pp. 974-89.
Enns CW, Mickle SM, & Goldman JD. 2002. Trends in food and nutrient intakes by children in the United States . Family Economics and Nutrition Review 14(2):56-68.
Session 4. Tuesday - February 10, 2004
Rural households: What people do when they have few assets, limited markets,
and face mortal risks
* Fafchamps, M. and A.R. Quisumbing, “ Human Capital, Productivity, and Labor Allocation in Rural Pakistan .” Journal of Human Resources , vol. 34, no. 2, Spring 1999, pp. 369-406
* Stefan Dercon and Pramila Krishnan, “In Sickness and in Health: Risk Sharing within Households in Rural Ethiopia.” Journal of Political Economy , Vol. 108, No. 4. (Aug., 2000), pp. 688-727.
Assignment Due: 1 st exercise: predicting consumption choices (to be distributed)
Session 5. Tuesday - February 17, 2004
Technology adoption: Are innovations good for the poor? Who adopts them, and why?
* Foster, Andrew D and Rosenzweig, Mark R, “ Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture ” Journal of Political Economy , vol. 103, no. 6, December 1995, pp. 1176-1209.
Feder, Gershon; Just, Richard E; Zilberman, David, “Adoption of Agricultural Innovations in Developing Countries: A Survey.” Economic Development and Cultural Change , vol. 33, no. 2, January 1985, pp. 255-98
Session 6. Tuesday - February 24, 2004
Natural-resource use: What people do when key assets are collectively owned
* Kazianga, H. and W.A. Masters, “ Investing in Soils: Field Bunds and Microcatchments in Burkina Faso. ” Environment and Development Economics, vol. 7, no. 3, July 2002, pp. 571-91.
* Dalton , T.J. and W.A. Masters, “ Pasture Taxes and Agricultural Intensification in Southern Mali ” Agricultural Economics , vol. 19, no. 1-2, September 1998, pp. 27-32
* Matson, P. A., Parton, W. J., Power, A. G., Swift, M. J., “ Agricultural Intensification and Ecosystem Properties ” Science 277 (1997): 504-509.
Session 7. Tuesday - March 02, 2004
Guest lecture: Prof. Jeffrey Sachs
Readings t o be announced
Assignment Due: Exercise #2: demographic change and household decisions
Session 8. Tuesday - March 09, 2004
Rural markets: price stabilization and spatial integration
* Fafchamps, Marcel. “ Networks, Communities and Markets in Sub-Saharan Africa: Implications for Firm Growth and Investment ” Journal of African Economies, vol. 10, no. 0, Supplement 2 Sept. 2001 , pp. 109-42.
* Shively , G.E., E. Martinez and W.A. Masters, “ Testing the Link between Public Intervention and Food Price Variability: Evidence from Rice Markets in the Philippines .” Pacific Economic Review, vol. 7, no. 3, October 2002, pp. 545-54.
* Masters, W.A. and E.A. Nuppenau, “Panterritorial versus Regional Pricing for Maize in Zimbabwe .” World Development , vol. 21, no. 10, October 1993, pp. 1647-58.
Session 9. Tuesday - March 23, 2004
Policy and political economy: How and why governments tax or subsidize agriculture
* Anderson, Kym (1995), "Lobbying Incentives and the Pattern of Protection in Rich and Poor Countries." Economic Development and Cultural Change 43(2, Jan.): 401-424.
* McMillan, M.S. and W.A. Masters, “ An African Growth Trap: Production Technology and the Time-Consistency of Agricultural Taxation, R&D and Investment .” Review of Development Economics , vol. 7, no. 2, May 2003, pp. 179-91.
Session 10. Tuesday - March 30, 2004
Agriculture in economic growth: Is agriculture an engine of growth – or the caboose?
* Gollin, D., S. Parente and R. Rogerson, “The Role of Agriculture in Development.” American Economic Review Papers and Proceedings , vol. 92, no. 2, May 2002, pp. 160-64
* Ravallion, Martin; Datt, Gaurav, Why Has Economic Growth Been More Pro-poor in Some States of India Than Others? Journal of Development Economics, vol. 68, no. 2, August 2002, pp. 381-400.
Datt,
Gaurav and Martin Ravallion. Farm
Productivity and Rural Poverty in India
Journal of Development Studies. Vol. 34, Iss. 4 (Apr 1998.); p. 62 (24
pages).
Matsuyama , Kiminori, 1992. Agricultural Productivity, Comparative Advantage, and Economic Growth. Journal of Economic Theory , vol. 58, no. 2, December 1992, pp. 317-34
Mellor, John W. (2000), “ Faster More Equitable Growth: The Relation Between Growth in Agriculture and Poverty Reduction ” CAER II Discussion Paper No. 70, May 2000. Cambridge : Harvard Institute for International Development.
Assignment Due: Exercise #3: household decisions and market outcomes
Session 11. Tuesday - April 06, 2004
Agriculture in the world economy: Factor endowments, comparative advantage and trade
* K. Anderson, B. Dimaranan, J. Francois, T. Hertel, B. Hoekman and W. Martin (2001), “ The Cost of Rich (and Poor) Country Protection to Developing Countries .” Journal of African Economies , 10(3): 227- 257.
Hertel, Thomas W; Masters, William A; Elbehri, Aziz (1998), “The Uruguay Round and Africa : A Global, General Equilibrium Analysis.” Journal of African Economies , vol. 7, no. 2 (July): pp. 208-36.
Hertel, T.W. et al., RunGTAP: A General Equilibrium Model of World Trade. W. Lafayette , IN : Center for Global Trade Analysis, Purdue University .
Session 12. Tuesday - April 13, 2004
R&D policy for innovation and technical change : The green revolution, biotechnology, and innovation systems
* Evenson, R. E. and D. Gollin, 2003. “ Assessing the Impact of the Green Revolution, 1960 to 2000 .” Science 300 (5620, 2 May 2003 ): 758-762 (in Review).
* Pardey, Philip G. and Nienke M. Beintema, 2001. Slow Magic: Agricultural R&D a Century after Mendel . Washington , DC : IFPRI.
* Julian M. Alston, Michele C. Marra, Philip G. Pardey and T.J. Wyatt (2000), "Research returns redux: a meta-analysis of the returns to agricultural R&D." Australian Journal of Agricultural and Resource Economics, 44 (2, June): 185-215.
Masters, W.A., T. Bedingar and J.F. Oehmke, “ The Impact of Agricultural Research in Africa: Aggregate and Case Study Evidence ” Agricultural Economics , vol. 19, no. 1-2, September 1998, pp. 81-86.
Michele C. Marra, Philip G. Pardey, and Julian M. Alston, 2002. “ The Payoffs to Transgenic Field Crops: An Assessment of the Evidence .” AgBioForum, 5(2): 43-50.
Thirtle, C., L. Lin and J. Piesse, 2003. “The Impact of Research Led Agricultural Productivity Growth on Poverty Reduction in Africa , Asia and Latin America .” World Development (forthcoming).
Center for Life Sciences, Colorado State University , 2003. Transgenic Crops: An Introduction and Resource Guide .
Session 13. Tuesday - April 20, 2004
Student presentations
Assignment Due: Exercise #4: policy choices and market outcomes
Session 14. Tuesday - April 27, 2004
Wrap-up and conclusions
* Lindauer, David L. and Lant. Pritchett, " What's the Big Idea? The Third Generation of Policies for Economic Growth ." Economia , Vol. 3, No. 1 (Fall 2002), pp. 1-39.
Radelet,
Steve, “ Bush
and Foreign Aid ”
Foreign Affairs, September/October 2003
Vol 82, Number 5
Oxfam America , “ Running into the Sand: Why failure at the Cancun trade talks threatens the world's poorest people .” Oxfam Briefing Paper No. 53. Boston , MA : Oxfam America , September 2, 2003 .