When the word "simply" appears in a headline about development issues,
be very, very cautious. That’s what happened in story that the NYT splashed
on its front page Sunday: "Ending
Famine, Simply by Ignoring the Experts", by Celia Dugger. The thesis
of the story is basically that by doing the opposite of what the World Bank
advised and subsidizing fertilizer, Malawi has managed to find itself in a world
of agricultural plenty.
One problem is that the article didn’t come with hyperlinks: it does things
like quote "an independent evaluation financed by the United States and
Britain" without giving us any idea of where to find it. What’s more, the
only people the article quotes are people who support its thesis. All this meant
that Brad DeLong was immediately suspicious: "it’s very hard to assess
what is going on," he wrote,
noting that Dugger doesn’t even say where the subsidies are coming from.
Nevertheless, it was clear to Mark Thoma who would embrace the article wholeheartedly:
"This is very Rodrikian," he wrote.
"It’s also Sachsian".
Turns out, Thoma’s batting .500 on that one. Sachs is quoted in the article,
and loves the fertilizer-subsidy program. But Dani Rodrik today gives his blog
over to Maggie McMillan, who has some
extremely pointed words for Dugger:
Low fertilizer use is indeed one of the Africa’s most vexing challenges.
But subsidizing is only a band-aid, masking its high cost and low productivity
without sustaining growth…
Dr. Masters and his colleagues at Purdue University did one of the first studies
of Malawi’s fertilizer subsidy program, when it was first introduced.
They predicted the high payoff reported in the NYT article, but found that
it had little to do with the fertilizer subsidy as such. Most of the effect
comes from the improved seed that accompanied the fertilizer, and from overcoming
Malawian farmers’ credit constraints.
Without underlying change, warns Dr. Dick Sserunkuuma, an economist at Makerere
University in Kampala, farmers do not benefit enough from the fertilizer to
make the subsidy an effective development strategy. The article makes it sound
like farmers in Malawi can achieve international levels of competitiveness
simply by applying fertilizer. This is simply not true…
The World Bank has given out lots of loans to African governments for fertilizer
and it has good reason to be cautious. For example, in an effort to stave
off famine and reduce Ethiopia’s dependence on food aid, in 1995 the
World Bank gave two loans to the government of Ethiopia totaling $164 million
to support fertilizer use. Fertilizer use increased quite a bit, and with
good rains in 2000/2001 there was a record harvest and maize prices plummeted.
I was there that year and the sad joke was that farmers had come all the way
to Addis to beg on the streets for money to repay their fertilizer loans.
Inputs can be productive without being profitable…
More fertilizer use is clearly an important part of poverty-alleviation success
stories around the world, driven by the spread of improved seed and favorable
market conditions. Subsidized fertilizer can raise output only temporarily.
So there is certainly scope for increased fertilizer use in Africa, but it
is not the magic bullet that the NYT headline would have us believe.
Many thanks to McMillan for moving the story forward in a smart and non-truculent
manner. Now, what are the chances, do you think, that Celia Dugger will respond?