Category Archives: What We Know

Counterfeit Seed: The Contrarian’s Take

I’m fascinated by Seed Counterfeiting as a potential answer to the old puzzle of why there hasn’t been a Green Revolution in Africa. As an explanation, it has a lot going for it: simple, parsimonious, straightforward and backed by a mountain of anecdote. Yet, at this point, the evidence really is that: just anecdote. Which leaves us open to an intriguing possibility: what if – and I have my devil’s advocate cap squarely on as I pose this question – it’s all a mirage? A kind of rural legend?

What’s undoubted is that lots and lots of people believe seed counterfeiting is rife in East Africa. Stories are easy to come by of farmers buying seeds that come in Certified Seed bags, planting them, and getting very low germination rates or just  poor harvests.  The conventional wisdom in a whole band of Eastern and Southern Africa stretching from Kenya to Zimbabwe has long attributed this to malicious counterfeiting: fraud, if we’re to call it what it is.

But fraud implies malicious intent, and we really don’t have very good evidence for malicious intent. At least not yet.

An alternative hypothesis is out there, though it doesn’t get very much play: maybe the reason so much seed is of poor quality has to do more with incompetence than fraud.

The seed companies in the region are badly undercapitalized. They underinvest in research and development. They fall prey to all the same dysfunctions that all the other institutions in East Africa also fall prey too. What if the problem has more to do with the way these small seed companies safeguard the integrity of their germplasm and handle quality assurance than with any malicious faking in a back alley somewhere?

One problem is the slow rate of new hybrid variety introductions: in Uganda, you get perhaps 3 new maize varieties introduced per year, and some of the top selling varieties have been around for decades. Maintaining the genetic integrity of the parent lines and the foundation lines isn’t straightforward in an undercapitalized industry. Genetic drift ain’t just a river in Egypt, and it’s not unthinkable that the genetic variability farmers report in some of the certified seed they plant stems from this: real companies selling seed that is no longer hybrid without realizing it.

As for non-germination, plenty of handling issues could account for this. Seed is finicky: it needs to be stored right and kept right to stay viable. In the West, seed is kept in cold storage along the distribution chain. How many cold storage facilities for seed have you seen in Africa?

I’ve spoken to thoughtful people who take these concerns seriously, to the point of doubting whether counterfeiting is a significant part of the problem at all. It’s a minority view, but one that injects a needed measure of skepticism. In the end, the prevalence of the belief that malice is to blame for poor seed performance may turn out to tell us more about the absence of social capital and the generalized distrust in market exchange than about the prevalence of malicious counterfeiting.

What’s shocking is that research hasn’t put this question to bed. At least not yet. IFPRI has a study out in the field now in Uganda, for USAID, that should put this question to rest at least in that country. A World Bank study has just been commissioned that ought to be able to answer the question in Kenya, too.

These studies can’t come too soon. I do hope they’re conducted with a genuinely open mind to this possibility.

Because I sure think malicious counterfeiting is a major bar to agricultural productivity growth in East Africa. But that’s not good enough. I want to know.

How enormous stories go unreported all the time

Anjan Sundaram’s OpEd in the New York Times this weekend was beautifully written and clarified a lot of things for me. I really urge you to go read it if you haven’t already.

For the past month I’ve been genuinely shocked and confused that a story as big and “important” as the slow starvation of hundreds of  thousands of people under the increasingly ironically-tinged label of “international protection” could warrant essentially no media coverage in the West.

But, of course, a moment’s reflection reveals that this sort of thing happens all the time, including with stories that are a lot “bigger” than the Refugee Food Crisis. The wars in Eastern Congo, for instance, are one or two order of magnitude newsier than the refugee food crisis, and yet…nothing. Or, well, virtually nothing.

Sundaram paints a picture of a Western news gathering system that’s just about thrown in the towel on Africa. Unless white people or oil are involved somehow, they’re just not going there, and how “big” the non-oil/non-white-people story might be won’t budge them from that bedrock commitment.

It really is shocking.

Is this the most evil Aid program in the world?

U.S. Food Aid has long had a dirty name in development circles. Whether you prefer see it as a giant exercise in Corporate Welfare or a transparent sop to farm state senators, one thing is clear: the program is more concerned with shifting grain surpluses (in gringo ships, of course) than with feeding the world’s hungry.

Now, research by Nathan Nunn and Nancy Qian just published in the hyper-prestigious American Economic Review shows it’s even worse than we thought.

U.S. Food Aid kills. In the actual bullet-holes-in-bodies sense.

How? You’ve heard of the butterfly that flaps its wings in Brazil and causes a rain storm in North Dakota. Turns out that rain storm leads to a bumper U.S. wheat harvest, which U.S. AID ships out to Africa, where a warlord steals it, sells it, and uses the money to buy weapons and kill people.

Nunn and Qian start with the (standard) observation that the key determinant of U.S. aid shipment volumes for wheat have little to do with conditions on the ground in recipient countries. Instead, food aid closely track wheat production in the U.S.: a good harvest in the mid-west is inevitably followed by a spike in food aid shipments the following year.

Their strategy is to identify the impact of wheat aid shipments in a given year on the incidence of civil conflict in recipient countries. Some whiz-bang econometrics later they conclude that, on average, “an increase in US food aid increases the incidence and duration of civil conflicts.” The more it rains in the mid-west, the more violence there is in very poor countries.

The deeper you get into the weeds, the hairier this story gets:

The amount of theft can even exceed the value of the food, since convoy vehicles and other equipment are also stolen. In 2008, MSF Holland, an international aid organization working in Chad and Darfur, noted the strategic importance of these goods, writing that these “vehicles and communications equipment have a value beyond their monetary worth for armed actors, increasing their capacity to wage war” (Polman 2010, p. 105).

The research finds no impact of U.S. Food Aid on local food production or prices. Let me just repeat that, because it’s actually quite staggering: flooding a conflict area with free American wheat does not cause local food prices to go down. Nunn and Qian do note that the available data on this is limited – still, that’s amazing.

On the one hand this is “good”, in that it suggests aid may not lead to agricultural disinvestment or to farmers reallocating their labour to armed conflict due to agricultural prices collapsing (the traditional case against aid).

On the other hand, it’s hard to see what possible use Food Aid can be at alleviating hunger if it leaves food prices where they were before. It suggests the scale of Food Aid diversion in conflict areas is so vast that all it does is bolster the resource base of the parties to the conflict, without so much as a cursory bump to food availability.

What intrigues me is the Limited Access Orders reading to this evidence – something that, to be clear, Nunn and Qian don’t really go into. In an LAO reading, developing country conflicts are usually driven by failures in elite pacts over how to divvy up rents. Food aid is, in a way, the ultimate rent: free food that drops from the sky (sometimes literally.) It’s just more stuff to squabble over.

And I know it’s true, because I read it in the AER.

Aid, Oil and a Question of Magnitudes

As Blattman likes to say, our views are inevitably influenced more than we’d like to admit by the one or two countries we know most. In my case that’s Venezuela, which is where I’m from, and a country I’ve long blogged about. The growing protests there this month have seen me return to that beat, temporarily.

Needless to say, you don’t write about a place for 12 years without it powerfully affecting your understanding of development.

A smallish (30 million people) middle income country sitting on top of an ocean of oil, Venezuela’s experience neatly puts international aid flows in perspective.

On average, over the last 10 years, Venezuela has taken in roughly $100 billion in oil revenues each year. A trillion dollars total, give or take. That’s within spitting distance the total overseas development aid from all OECD countries to all middle-income and poor countriesAll of it going to a single, not-especially-poor, not-especially-large country run by a government whose entire basis of legitimacy is its militant determination to make people’s lives better.

If there was some simple mechanism whereby throwing money at a government deeply concerned with poverty would make it go away, surely Venezuela would have eradicated poverty a long, long time ago. And yet our social performance over the last 15 years has been middling, at best. Sure, poverty fell, as did infant mortality and illiteracy, but none of this happened markedly faster in Venezuela than in other countries in the region that didn’t get a massive oil bonanza.

After a decade-long petroboom, Caracas – my hometown – is still ringed by some of the most violent slums anywhere in Latin America. Hunger is still a problem in rural communities. One squandered trillion dollar oil-boom later, a government of undoubted political commitment to the poor has demonstrated just to what extent good intentions are not enough.

Recent trends are threatening even the advances that were made at the height of the oil boom. A disastrous anti-business policy stance, alongside some truly reckless fiscal policies have left the country facing very high inflation and mounting shortages. Here, to give you a sense, is what you have to go through to make a cake in Caracas these days. As mass demonstration rock the country, the oil bonanza of the last 15 years seems increasingly distant.

It takes seeing the Venezuelan case up-close-and-personal to realize the basic good sense of Angus Deaton’s critique: there is no amount of money and no volume of good intentions that can make up for the impact of a bad policy regime.  A sharp look at Venezuela, Nigeria, Indonesia and the other developing petrostates should make this obvious.

Somehow, it doesn’t.

Why rural development comes first

One common criticism this blog has been getting has to do with its rural focus. “Sure,” people argue, “most of the very poorest live in the countryside. But, overwhelmingly the way they get less poor is to move to a city.”

This is true. Urbanization has been a key feature of every fast development experience there’s ever been. So, in terms of grand strategy, why would you waste your time messing with rural producers?

In Taiwan and South Korea, the cities had to compete for rural people to want to move there.

That’s what I thought too until I read Diane Davis’s remarkable Discipline and Development: Middle Class Prosperity in East Asia and Latin America. (You can read the brilliant intro online here.)

Davis’s book is a perfect little counterpoint to Robert Bates’s classic Market and States in Tropical Africa, (which it really helps to have read before you dive into it.)

For Bates, the political economy of the post-colonial African state was pretty simple: they were machines for extracting rents from farmers and transferring them to urban constituents. Through a series of institutional mechanisms handed down from the Colonial past (chief among them, the dreaded Agricultural Marketing Board), African states systematically looted the countryside, underpaying for products, undersupplying services, and spending the proceeds on a series of industrial boondoggles in town. It…wasn’t a very successful development model, in large part because it created powerful incentives for industrialists to specialize not on running profitable industries, but on pressuring the state to extract rents from rural people and hand them over.

Bates’s book is the stuff of a thousand undergrad syllabi, I think most people in the development game have at some point come across the argument. What I find dismaying is that Davis’s book, which is at least as good (for my money, way better), is…not as often read. What she shows is that some of East Asia’s fastest developers of the Tiger years turned the political economy of African states on its head.

Davis shows how in Taiwan and South Korea – which, in the 1950s, were just as poor as Uganda or Nigeria – land reform produced a class of prosperous, independent, middle-class rural producers. The producers – mostly rice farmers in South Korea, a mix of rice and sugar-cane farmers in Taiwan – were politically powerful. Powerful enough to resist any thought industrialists might have had to finance industrial expansion on their backs.

If anything, it was just the opposite: rural people put the heat on the government to squeeze the industrialists for surpluses. In this narrative, Taiwanese and South Korean industrialists’ export orientation was forced on them by a political dynamic where they were relatively weak, and under strong pressure to perform.

Continue reading Why rural development comes first

How Prevalent is fake seed in Uganda?

Say you’re a farmer in Uganda. You don’t have a lot of land, you don’t have a lot of money, you don’t have a lot of hope. You go into town and stop to talk to your local agro-dealer. He says if you buy his high-yield seed and fertilizer you can triple your harvest for about $100.

Do you believe him? Should you believe him?

If Fake Seed turns out to be as prevalent as initial tests suggest, the problem is a development catastrophe for Uganda.

In a better world, this should be a no-brainer. Of course you should believe him! There are tons of cases of farmers doubling and tripling their yields just by switching to hybrid seed + fertilizer. This isn’t voodoo, it isn’t even GMO: it’s a long established, tried-and-tested technology at the heart of the 1960s and 70s’ Green Revolution. You’d have to be dumb to pass up on hybrid seed.

And yet, if you’re a Ugandan farmer, you may well not believe your ag dealer. And not because you’re dumb; because you’re smart.

You’ve heard the stories. Stories of farmers who gambled on seed that didn’t grow. Stories of unscrupulous dealers making off with their very hard-earned savings in return for junk. You know the seed you saved from last season won’t get you a great harvest, but one thing you’re sure of: it will grow.

The stakes couldn’t be higher. If the seed you buy doesn’t grow, you’ll starve. Even the money you’d need to buy emergency food will be gone since, of course, you’ll have spent it on the seed.

The question, then, is how good a reason do Ugandan farmers have to worry about this? Sadly, there are plenty of anecdotes about fake seed in Uganda, but – at present – a shortage of hard data.

An important study is now underway by Svensson, Yanagizawa-Drott, and Bold should help pin down the scale of the problem. This same team previously studied the market for antimalarials in Uganda, 37% of which turned out to be fake. Their preliminary results on seed, not yet published, show perhaps 3 in 10 commercial seed bags sold in Uganda fail to germinate. 

I asked James Joughin about this number, which strikes me as astronomic, and he said it’s not immediately evident how much of this bum seed is outright counterfeit – just normal grain painted to look like it’s been industrially treated as seed – and how much of it is “real” seed that fails to germinate for some other reason.

“Who can tell?” Joughin said, “maybe the ag dealer left a bag of real seed outside, and it got wet, and that’s how it was ruined.” Or maybe a mistake was made at the seed treatment plant, where quality standards vary enormously. The fact that the National Seed Certification Service is a bit of a cess-pool, with seed companies working to dismal quality standards able to bribe their way to certification, certainly doesn’t help.

Whether the culprit is lax quality control, limp regulation, improper handling in the supply chain or outright criminality, the result is the same: the final buyer can’t be certain this very expensive input is going to work.

One thing is for sure: if Fake Seed turns out to be as prevalent as initial tests suggest, the problem is a development catastrophe for Uganda. Adopting Improved Seed and Fertilizer remains the most promising, quickest road out of acute poverty for vulnerable rural populations, with stories of harvests tripling entirely common. (On demonstration plots run by trained agronomists, the yield bump can be up to 10-fold.) Anything that slows the spread of hybrid seed or heightens farmers’ perceptions of its risk is an outright disaster.

And so back we go to Uganda’s broken Seed Certification system. Development topics really don’t get more boring than that, but the Ugandan Seed situation is a perfect little parable for how indispensable a minimally competent state able to enforce its own laws really is for development. If the state can’t (or won’t) prosecute people who cheat farmers with bum seed, that’s just not a category of problem an NGO can address.

Continue reading How Prevalent is fake seed in Uganda?

How can it be that 87% of Ugandan farmers still don’t use improved Seed?

It’s one of the enduring puzzles of the development world: the key technology that could quickly bring most of the world’s poorest people out of poverty is long established, well understood, readily available…and mostly unused.

Today, in peaceful, fertile Uganda, 87% of smallholder farmers still use saved grain as seed, a technology unchanged in 12,000 years that guarantees miserable yields and plenty of hunger. How can we possibly account for the fact that this still goes on, today, in 2014?

The tendency in the aid world is to try to answer this question in a nice, sterile, politics-free safe-zone. We’ll talk about access to finance. We’ll dream up cool little mobile platforms to allow farmers to buy seed on layaway. We’ll fund research and improve breeding methods. We might even capitalize some Seed companies.

What most of us won’t do is wade waist-deep into the institutional/regulatory morass behind any given African country’s seed industry. Heaven forbid!

Which is what makes this evaluation paper by James Joughin for the World Bank so valuable. Joughin, an agricultural economist, actually worked at Uganda’s Ministry of Agriculture for over three years, so he’s plenty well acquainted with the muck. And so, he jumps right in.

Here, for those of you who have been itching to know, is how the Ugandan Seed Certification System’s key institutions work (or, rather, don’t work):

Continue reading How can it be that 87% of Ugandan farmers still don’t use improved Seed?

The Cash or Kind Wars, part 1 (out of a zillion)

“Give a man a fish, and he’ll eat for a day. Give a man a fish net, and he’ll fish for a lifetime. Give him 20 bucks, and he may buy something way better than a fish net, or he may just drink it. It’s hard to say…”

That, in a nutshell, is the state of the Cash-or-Kind debate today.

The miseries of just handing out consumption goods are  well understood. Nobody wants your old sneakers. Cash is preferable in every conceivable way.

But that’s not the interesting question.

The interesting question pits cash against capital goods: investments that people could – but might not – spend their cash on. And here it’s a good deal murkier, because the normal reasons behind the “presumption in favour of cash” go wobbly in an investment context.

In the context of a critique, Matt Collin puts forward the presumption in favour of cash pretty succinctly:

Even without the growing body of empirical evidence indicating that just giving cash is an incredibly cost-effective way to increase welfare, there is an extremely compelling theoretical case to be made for cash transfers. Poor households have preferences… and no one will ever have better information on these preferences than these households. Transferring households cash allows them to best allocate these new resources to meet these preferences – otherwise, we run the risk of wasting resources onstuff that households just don’t want

When we’re talking about consumption goods, this is entirely uncontroversial, and it’s important to fully digest the reasons behind the presumption in favour of cash in that context.

But take a step back and ask yourself why donors give in the first place.

Continue reading The Cash or Kind Wars, part 1 (out of a zillion)

The Brutal Math of the One Acre Farm

As facts go, the facts of the small African farm are grim, and seldom grasped. You need to start here, though, because 70% of the world’s poorest people live on very small farms.

Their poverty is nothing but straightforward: if you’re farming the size of farm the poorest farm, with the kind of technology the poorest have access to and getting the yields that pass for normal in the poorest countries, you just don’t produce enough calories to feed  even two adults –

[A note on sources is at the end.]

A household working one acre at South Sudanese yields just can’t feed itself. Notice, we’re talking calories here. So this is before we even start thinking about protein, or micronutrients, to say nothing of the thousand other things people need to survive (cookware, salt, oil, housing, clothes, etc. etc. etc.) It doesn’t get more elemental than this.

The second column in that chart shows what happens if you take that same very poor household and endow it with three simple things: high-yield hybrid seed, a ridiculously small amount of fertilizer, and the advice on how to use them properly.

It turns out to be shockingly easy to boost small farm yields 3 and 4-fold, just by doing that. Suddenly, there are enough calories to go around, perhaps a bit to sell. Some actual cash income. A minimum of hope.

Continue reading The Brutal Math of the One Acre Farm