Global trade, food production and ecosystem support : Making the interactions visible

Modern food production is a complex, globalized system in which what we eat and how it is produced are increasingly disconnected. This thesis examines some of the ways in which global trade has changed the mix of inputs to food and feed, and how this affects food security and our perceptions of sustainability. One useful indicator of the ecological impact of trade in food and feed products is the Appropriated Ecosystem Areas (ArEAs), which estimates the terrestrial and aquatic areas needed to produce all the inputs to particular products. The method is introduced in Paper I and used to calculate and track changes in imported subsidies to Swedish agriculture over the period 1962-1994. In 1994, Swedish consumers needed agricultural areas outside their national borders to satisfy more than a third of their food consumption needs. The method is then applied to Swedish meat production in Paper II to show that the term “Made in Sweden” is often a misnomer. In 1999, almost 80% of manufactured feed for Swedish pigs, cattle and chickens was dependent on imported inputs, mainly from Europe, Southeast Asia and South America. Paper III examines ecosystem subsidies to intensive aquaculture in two nations: shrimp production in Thailand and salmon production in Norway. In both countries, aquaculture was shown to rely increasingly on imported subsidies. The rapid expansion of aquaculture turned these countries from fishmeal net exporters to fishmeal net importers, increasingly using inputs from the Southeastern Pacific Ocean. As the examined agricultural and aquacultural production systems became globalized, levels of dependence on other nations’ ecosystems, the number of external supply sources, and the distance to these sources steadily increased. Dependence on other nations is not problematic, as long as we are able to acknowledge these links and sustainably manage resources both at home and abroad. However, ecosystem subsidies are seldom recognized or made explicit in national policy or economic accounts. Economic systems are generally not designed to receive feedbacks when the status of remote ecosystems changes, much less to respond in an ecologically sensitive manner. Papers IV and V discuss the problem of “masking” of the true environmental costs of production for trade. One of our conclusions is that, while the ArEAs approach is a useful tool for illuminating environmentally-based subsidies in the policy arena, it does not reflect all of the costs. Current agricultural and aquacultural production methods have generated substantial increases in production levels, but if policy continues to support the focus on yield and production increases alone, taking the work of ecosystems for granted, vulnerability can result. Thus, a challenge is to develop a set of complementary tools that can be used in economic accounting at national and international scales that address ecosystem support and performance. We conclude that future resilience in food production systems will require more explicit links between consumers and the work of supporting ecosystems, locally and in other regions of the world, and that food security planning will require active management of the capacity of all involved ecosystems to sustain food production.

Essays on Development Policy and the Political Economy of Conflict

Electoral Rules and Leader Selection: Experimental Evidence from Ugandan Community Groups. Despite a large body of work documenting how electoral systems affect policy outcomes, less is known about their impact on leader selection. We study this by comparing two types of participatory decision making in Ugandan community groups: (i) vote by secret ballot and (ii) open discussion with consensus. Random assignment allows us to estimate the causal impact of the rules on leader types and social service delivery. Vote groups are found to elect leaders more similar to the average member while discussion group leaders are positively selected on socio-economic characteristics. Further, dropout rates are significantly higher in discussion groups, particularly for poorer members. After 3.5 years, vote groups are larger in size and their members save less and get smaller loans. We conclude that the secret ballot vote creates more inclusive groups while open discussion groups favor the already economically successful. Preparing for Genocide: Community Meetings in Rwanda. How do political elites prepare the civilian population for participation in violent conflict? We empirically investigate this question using data from the Rwandan Genocide in 1994. Every Saturday before 1994, Rwandan villagers had to meet to work on community infrastructure. The practice was highly politicized and, according to anecdotal evidence, regularly used by the political elites for spreading propaganda in the years before the genocide. This paper presents the first quantitative evidence of this abuse of the community meetings. To establish causality, we exploit cross-sectional variation in meeting intensity induced by exogenous weather fluctuations. We find that an additional rainy Saturday resulted in a five percent lower civilian participation rate in genocide violence. Selection into Borrowing: Survey Evidence from Uganda. In this paper, I study how changes to the standard credit contract affect loan demand and selection into borrowing, using a representative sample of urban micro enterprises, most with no borrowing experience. Hypothetical loan demand questions are used to test whether firm owners respond to changes in loans' contractual terms and whether take-up varies by firms' risk type and other firm owner characteristics. The results indicate that contracts with lower interest rates and less stringent collateral requirements attract less risky borrowers, suggesting that there is scope for improvement of standard financial contract terms. Credit Contract Structure and Firm Growth: Evidence from a Randomized Control Trial. We study the effects of credit contract structure on firm outcomes among small and medium sized firms. A randomized control trial was carried out to distinguish between some of the key constraints to efficient credit use connected to the firms' business environment and production function, namely (i) backloaded returns (ii) uncertain returns and (iii) indivisible fixed costs. Each firm was followed for the 1-year loan cycle. We describe the experiment and present preliminary results from the first 754 out of 2,340 firms to have completed the loan cycle. Firms offered a grace period have higher profits and higher household income than firms receiving a rebate later on as well as the control group. They also increased the number of paid employees  and reduced the number of unpaid employees, an effect also found among firms that received a cash subsidy at the beginning of the loan cycle. We discuss potential mechanisms behind these effects.