A partnership with academia

Building knowledge for trade and development

NEWS

Chaired by Vi trade and poverty online course author and project mentor, Nicolás Depetris Chauvin, the morning session of September 9 included presentations by researchers from Costa Rica, the former Yugoslav Republic of Macedonia, and the Democratic Republic of the Congo.
 
First on the programme was Carlos Umaña (pictured, left), of Academia de Centroamerica, and policymaker partner, Henry Benavidez (pictured), of the Ministry of Foreign Trade.  The pair discussed research on whether a reduction in the price of rice due to cheaper imports expected from the free trade agreement between Central America, the United States and the Dominican Republic (CAFTA-DR), would benefit poor households in Costa Rica.
 
“CAFTA-DR will eliminate import quotas and provide unlimited duty-free access to imports from the United States by 2025,” Umaña said. “The US will become the cheapest source of rice for Costa Rica.” 
 
His analysis predicts a welfare gain for all rice-consuming households, particularly the poorest in urban areas, and recommends that government agencies surveil price behavior for the imported product, especially after 2016, when tariffs will be reduced by 8 percent annually.
 
The second presentation was delivered by Marjan Petreski (pictured, left), whose analysis proposes a revised scheme of agricultural subsidies in order to improve the welfare of the former Yugoslav Republic of Macedonia’s households, 27.1 percent of whom are poor. 
 
The research was motivated by the observation that despite a substantial programme of subsidies paid indiscriminately per cultivated hectare, and recent agricultural price increases, production of food has declined to approximately 60 percent of 1991 production levels.
 
“An overarching objective was to improve the living conditions and incomes, by targeting those who are predominantly living or temporary migrating to the rural areas,” Petreski said. “Effects, however, to a large extent, were unsatisfactory.”
 
In his proposal, Petreski gives priority to the poorest female-headed households, allocates a larger subsidy to rice producers, and provides incentives for urban households to cultivate wheat and maize.
 
“It was smart to keep (the subsidies) at the same level,” said policymaker partner, Nikica Mojsoska Blazhevski, Advisor to the Minister of Labour and Social Policy (pictured). “Policymakers don’t like to see increases in the programmes.”
 
The last presentation of the morning came from Christian Otchia (pictured, left), currently at Nagoya University, Japan, who conducted an assessment of the potential of agricultural trade liberalization to improve the welfare of the poor in his country, the Democratic Republic of the Congo.
 
The study finds that tariff cuts from liberalization have very little positive effect on the poor, and proposes complementary policies to boost productivity and reduce transportation costs for agricultural products, which combined bring larger welfare gains than trade liberalization alone.
 
“The highest priority is to increase agricultural productivity and build rural feeder roads,” agreed policymaker partner, Charles Lusanda, of the Ministry of Economy (pictured). “The government envisages policy focusing on agro-industrial infrastructure and agro-industrial parks.”
 
He added that the DRC has partnered with South Africa to set up a pilot agro-industrial park at Bunkanga Lonzo, which comprises industrial, commercial and residential developments. The first harvest is expected in December of this year.

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