Agricultural productivity, food consumption and Oxfam

By Matt Collin · June 07, 2011

From the study which has generated Oxfam's "prices will double in 20 years" headline:

It should be emphasized that the model does not capture potential increases in agricultural productivity that are likely to result from increased research and development efforts incentivized by the price increases for agricultural output.

So we're assuming nobody tries to invest more in agricultural productivity to gain from these price increases.

And, even more surprising, given the doom-and-gloom headlines:

With the exception of South Asia, real per capita food consumption generally expands despite the strong domestic food price increases, since average real income per capita is projected to rise. However, the food price increases relative to other commodities means that the share of income that households spend on food remains higher than it would be in the absence of these price increases.

And even for South Asia, the model shows only a tiny decline (and who know how certain these estimates are). These are, of course, averages, and do not necessarily translate into gains for the poor in each country.

Chris Blattman points out further dissension by Matt Ridley. Hat tip to Tim Worstall for catching some of the inconsistencies between Oxfam's statements and the results of the Sussex report.

Please discuss - we need to do more of this.

1 Comment

Ranil Dissanayake · June 07, 2011 at 12:50 PM

This was the part that came under 'uncertain' in my assessment of Grow. The thing is, quite a bit of what Oxfam are advocating (though not all by any means) are goods no matter what's going on with food prices.

The big question, which as ever, is not answered in the campaign which focuses on one major issue, is what the correct balance of funding / effort is, given our constrained maximisation problem in development. That's where these criticisms come into play.

the paper does have an 'optimistic scenario' which has higher than expected productivity growth (the baseline scenario has only continuation of trend productivity increases). We can use this as an imperfect proxy for the effect of extra investment due to higher prices. It shows that depending on the crop, food prices would rise between about 10% and 40%.

I'd like to see a model which spends a lot more time trying to predict productivity changes, which seems to me the only real way of dealing with this in a rigourous way.