Up in Smoke? Agricultural Commercialization, Rising Food Prices and Stunting in Malawi

Up in Smoke? Agricultural Commercialization, Rising Food Prices and Stunting in Malawi

Diversification into high-value cash crops among smallholders has been propagated as a strategy to improve welfare in rural areas. However, the extent to which cash crop production spurs projected gains remains an under-researched question, especially in the context of market imperfections leading to non-separable production and consumption decisions, and price shocks to staple crops that might be displaced on the farm by cash crops. This study is a contribution to the long-standing debate on the links between commercialization and nutrition. It uses nationally-representative household survey data from Malawi, and estimates the effect of household adoption of an export crop, namely tobacco, on child height-for-age z-scores. Given the endogenous nature of household tobacco adoption, the analysis relies on instrumental variable regressions, and isolates the causal effect by comparing impact estimates informed by two unique samples of children that differ in their exposure to an exogenous domestic staple food price shock during the early child development window (from conception through two years of age). The analysis finds that household tobacco production in the year of or the year after child birth, combined with exposure to an exogenous domestic staple food price shock, lowers the child height-for-age z-score by 1.27, implying a 70-percent drop in z-score. The negative effect is, however, not statistically significant among children who were not exposed to the same shock. The results put emphasis on the food insecurity and malnutrition risks materializing at times of high food prices, which might have disproportionately adverse effects on uninsured cash crop producers.

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Bibliographic Details
Main Authors: Wood, Benjamin, Nelson, Carl, Kilic, Talip, Murray, Siobhan
Language:English
en_US
Published: World Bank, Washington, DC 2013-10
Subjects:AGGREGATE HOUSEHOLD INCOME, AGRICULTURAL DEVELOPMENT, AGRICULTURAL ECONOMICS, AGRICULTURAL GROWTH, AGRICULTURAL PRODUCE, AGRICULTURAL PRODUCTION, AGRICULTURAL PRODUCTIVITY, AGRICULTURAL SEASON, AGRICULTURAL SECTOR, AGRICULTURE, ARABLE LAND, CALORIC INTAKE, CASH CROPS, CASH-CROP, CENTRAL REGION, CHILD DEVELOPMENT, CHILD MORTALITY, CHILD NUTRITION, COVARIATE SHOCKS, CROP INCOME, CROP PRODUCTION, CURING, DISASTERS, DIVERSIFICATION, DROUGHT, ECOLOGICAL ZONES, ECONOMIC GROWTH, ECONOMIC SHOCKS, FAMILIES, FAMINE, FARM AREA, FARM HOUSEHOLDS, FARM MANAGEMENT, FARM PRODUCTION, FARMERS, FOOD AID, FOOD AVAILABILITY, FOOD COMMODITIES, FOOD CONSUMPTION, FOOD CROP, FOOD CROP PRODUCTION, FOOD CROPS, FOOD INSECURITY, FOOD MARKETS, FOOD NECESSITIES, FOOD POLICY, FOOD POLICY RESEARCH, FOOD PRICE, FOOD PRICES, FOOD PRODUCTION, FOOD SECURITY, FOOD SELF-SUFFICIENCY, FOOD STOCKS, GEOGRAPHIC REGIONS, GRAIN RESERVES, HAZARDS, HEALTH INTERVENTIONS, HEALTH OUTCOMES, HIGH POPULATION DENSITY, HOUSEHOLD INCOME, HOUSEHOLD SIZE, HOUSEHOLD SURVEY, HOUSEHOLD WELFARE, HOUSING, HUMAN CAPITAL, HUMAN DEVELOPMENT, INADEQUATE FOOD, INCOME, INCOME DISTRIBUTION, INCOME GROWTH, INCOME QUINTILE, INEQUALITY, INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE, INTERVENTION, IRRIGATION, LAND HOLDINGS, LAND TENURE, MAIZE, MALNUTRITION, MARKET FAILURES, MARKETING, MATERNAL HEALTH, MORTALITY, NUTRITION, NUTRITION OUTCOMES, NUTRITIONAL STATUS, PEDIATRICS, PESTICIDES, POLITICAL ECONOMY, POOR, POOR SMALLHOLDERS, POVERTY ALLEVIATION, POVERTY RATE, POVERTY REDUCTION, PREGNANCY, PRESCHOOL CHILDREN, PRODUCTION FUNCTION, REGIONAL BOUNDARY, RICE, RISK FACTORS, RISK REDUCTION, RURAL, RURAL AREAS, RURAL DEVELOPMENT, RURAL INCOME, RURAL LIVELIHOODS, RURAL POOR, SAVINGS, SCHOOLING, SMALL FARMS, SMALLHOLDER AGRICULTURE, SMALLHOLDER FARMERS, SMALLHOLDER HOUSEHOLDS, SOCIAL CAPITAL, SOCIAL PROTECTION, SPATIAL DIFFERENCES, STRUCTURAL ADJUSTMENT, SUBSISTENCE, SUGARCANE, SUSTAINABLE GROWTH, TARGETING, TEA, TOBACCO INDUSTRY, VEGETABLE CROPS, VULNERABILITY ASSESSMENT, WAR, WATER AVAILABILITY, WELFARE IMPROVEMENTS,
Online Access:http://documents.worldbank.org/curated/en/2013/10/18371657/up-smoke-agricultural-commercialization-rising-food-prices-stunting-malawi
https://hdl.handle.net/10986/16864
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Summary:Diversification into high-value cash crops among smallholders has been propagated as a strategy to improve welfare in rural areas. However, the extent to which cash crop production spurs projected gains remains an under-researched question, especially in the context of market imperfections leading to non-separable production and consumption decisions, and price shocks to staple crops that might be displaced on the farm by cash crops. This study is a contribution to the long-standing debate on the links between commercialization and nutrition. It uses nationally-representative household survey data from Malawi, and estimates the effect of household adoption of an export crop, namely tobacco, on child height-for-age z-scores. Given the endogenous nature of household tobacco adoption, the analysis relies on instrumental variable regressions, and isolates the causal effect by comparing impact estimates informed by two unique samples of children that differ in their exposure to an exogenous domestic staple food price shock during the early child development window (from conception through two years of age). The analysis finds that household tobacco production in the year of or the year after child birth, combined with exposure to an exogenous domestic staple food price shock, lowers the child height-for-age z-score by 1.27, implying a 70-percent drop in z-score. The negative effect is, however, not statistically significant among children who were not exposed to the same shock. The results put emphasis on the food insecurity and malnutrition risks materializing at times of high food prices, which might have disproportionately adverse effects on uninsured cash crop producers.

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