ACME Lecture Series: Direct and indirect effects of crop purchase programs  on smallholder welfare: Evidence from Zambia

Presented by Professor Ruth Uwaifo Oyelere 

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Date: Thursday, November 29, 2018 

Time: 1:00 p.m - 1:50 p.m 

Evans Dining Hall, Terrace Level 

Government and parastatal crop purchase programs have regained popularity in sub-Saharan Africa, and many cite improving food security and incomes as key goals. There is limited empirical evidence on the welfare effects of these programs. This paper considers one such program, the Zambian Food Reserve Agency (FRA), which purchases maize from smallholder farmers at a panterritorial price that frequently exceeds market prices in surplus production areas. We use a fixed effects model and nationally-representative household panel survey data covering years before and during a ramp-up of FRA activities to estimate direct and indirect effects of these activities on smallholder welfare. Results suggest positive direct welfare effects on the small minority of smallholders that are able to sell to the FRA. But the results also suggest negative indirect welfare effects larger than the positive effects in districts with greater FRA maize purchases.