Rui Benfica

Biofuels, poverty, and growth: a computable general equilibrium analysis of Mozambique

This paper assesses the implications of large-scale investments in biofuels for growth and income distribution. We find that biofuels investment enhances growth and poverty reduction despite some displacement of food crops by biofuels. Overall, the biofuel investment trajectory analyzed increases Mozambiques annual economic growth by 0.6 percentage points and reduces the incidence of poverty by about 6 percentage points over a 12-year phase-in period. Benefits depend on production technology. An outgrower approach to producing biofuels is more pro-poor, due to the greater use of unskilled labor and accrual of land rents to smallholders, compared with the more capital-intensive plantation approach. Moreover, the benefits of outgrower schemes are enhanced if they result in technology spillovers to other crops. These results should not be taken as a green light for unrestrained biofuels development. Rather, they indicate that a carefully designed and managed biofuels policy holds the potential for substantial gains.

Smallholder agriculture, wage labour and rural poverty alleviation in land-abundant areas of Africa: evidence from Mozambique

This paper challenges the conclusions of earlier writers regarding the roles of smallholder agriculture, commercial agriculture and wage labour in rural poverty alleviation in Mozambique. We review literature from across Sub-Saharan Africa and use recently collected household level data sets to place Mozambique within this literature. Results show that, as in the rest of SSA, wage labour earnings are concentrated among the best-off rural smallholders; these earnings increase income inequality rather than reducing it. Results also suggest that the same set of households, who are substantially better-off than others, has tended to gain and maintain access to the ‘high-wage’ end of the labour market over time. Key determinants of access to ‘high-wage’ labour are levels of education and previously accumulated household wealth. Income from wage labour plays a key role in lifting out of relative poverty those ‘female-headed’ households that can obtain it, yet only about one in five such households earns wage income. We stress that the rural development question in Mozambique, and elsewhere in SSA, should not be framed as an artificial choice between promoting either wage labour opportunities or commercial agriculture or smallholder agriculture. The issue is what mix of approaches is needed to develop a diversified rural economy with growing total incomes, improving food security and rapid reductions in poverty. We suggest that commercial agriculture and increased rural wage labour are important components in any such strategy, but that this strategy will fail without substantial and sustained increases in the productivity and profitability of smallholder agriculture.

Biofuels, poverty, and growth: A computable general equilibrium analysis of Mozambique

Large private investments in biofuels are presently underway in Mozambique. This paper uses an economywide model to assess the implications of these investments for growth and income distribution. Our results indicate that biofuels provide an opportunity to enhance growth and poverty reduction. Overall, the proposed biofuel investments increase Mozambiques annual economic growth by 0.6 percentage points and reduce the incidence of poverty by about six percentage points over the 12-year phase-in period. However, the benefits depend on production technology. Our results indicate that an outgrower approach to producing biofuels is more pro-poor, due to the greater use of unskilled labor and accrual of land rents to smallholders in this system, compared with the more capital-intensive plantation approach. Moreover, the expected benefits of outgrower schemes will be further enhanced if they result in technology spillovers to other crops. from authors abstract

Food (In)security and its drivers: insights from trends and opportunities in rural Mozambique

We used multiple rounds of nationally representative agricultural survey data to analyze the trends and drivers of food insecurity in rural Mozambique. Reduced-form Probit models were estimated to explain the observed trends as a function of underlying drivers and factors related to agricultural policy interventions. Despite rapid macroeconomic growth, food insecurity in the rural areas had increased from 42.9xa0% in 2002 to 47.8xa0% in 2008. Significant inequalities were also observed in the distribution of food insecurity with a substantial disadvantage to the bottom quintile households and rural households located in the Northern provinces. Limited progress on several drivers of agricultural production and food access as well as geographic disparities appear to explain a significant part of the food insecurity trends and distribution. Whether the indicator was use of improved farm inputs and technology, receipt of agricultural extension services, farm production, or cash income, progress did not occur. This implies that to achieve broad-based food security in rural Mozambique, interventions may need to focus on addressing these drivers to increase agricultural productivity while enhancing resilience to price and weather shocks. Interventions must also be spatially targeted and tailored to each segment of the population.