9. Crises, Media, and Agricultural Development Policy

For more elaborated and sophisticated models, see, for example, the textbooks on agricultural, food, and development policy analysis of Gardner (1987) and Sadoulet and de Janvry (1995).

There are more factors that would need to be taken into account in a truly complete model. For example, not only “exogenous” shocks will affect producers and consumers, but also “endogenous” price changes, with the latter caused, for example, by faster productivity growth in agriculture. In addition, one would have to consider general equilibrium effects (considering not just food market effects but also effects through/on markets for labor, capital, services, other inputs and outputs). For example, as other prices (e.g. energy, fertilizer, etc.) changed together with food prices, this may need to be taken into account as well.

In extreme cases the size of the effects could actually be reduced to zero.

Only a few studies initially pointed at the mixed effects of the high food prices on poverty and food security (e.g. Aksoy and Hoekman 2010; Heady 2013; Jacoby 2013; Verpoorten et al. 2013). Recently there has been a growing consensus on the nuanced and mixed effects, as summarized in the review by Heady and Martin (2016). The observed heterogeneity among households and countries is consistent with economic predictions: net sellers and exporters of food benefit and net buyers and importers lose; the transmissions of price shocks to local markets have been mitigated by policy interventions and by institutional and infrastructure deficiencies; negative price effects on poverty and malnutrition have been offset by economic growth over the same period; and accounting for positive wage effects for the rural poor enhances poverty reduction.

Their model builds on the work of Mullainathan and Shleifer (2005) on bias in mass media; of Andreoni and Payne (2003) on fundraising by charity organizations and the literature on bias in communication in mass media; on international organizations’ lending and project implementation activities (Aldenhoff 2007; Dreher et al. 2009; Vaubel et al. 2007); the impact of fundraising on NGO strategies (e.g. Chau and Huysentruyt 2006; Andreoni and Payne 2003; Aldashev and Verdier 2010).

All international organizations use funds from donors to operate and implement their projects—or subgroups within these organizations have to compete internally for funding. While their funding sources may differ, in a world where financial means are limited and where there is continuous pressure to demonstrate relevance and importance of budget spending on particular items, projects, or divisions within large organizations, all these organizations face a demand to demonstrate the importance of their work. Focusing their reports and analyses on those hurt by price changes may fit in such strategy to show relevance and importance—and may thus help in securing and raising funds.

For example, Swinnen and Francken (2006) find that virtually all the attention to globalization, trade, and development issues in mass media is concentrated around “international summits”.

Van Belle et al. (2004) and Kim (2005) find that a higher level of media attention to developing countries problems leads to more aid. Eisensee and Strömberg (2007) argue that disaster relief and aid allocations are influenced by media coverage of disasters.

For example, Heinz and Swinnen (2015) find that job market losses are reported 20 times more likely than job market gains in the media (on a per job basis).

This shift in policy attention reflects the relative income effect, which is widely observed to be a determinant of food and trade policy (see Chap. 2). When economic conditions change, government attention will typically shift from one social group (or economic sector) to another depending on how they are (relatively) affected, that is, who is benefiting and losing from the change.

The organization cost argument was made first by Olson (1965) and has been applied to agricultural and food policy by, for exam ple, Anderson and Hayami (1986) and Gardner (1987).

In addition, the organizations have maintained their views on issues on which they differ in opinion. For example, organizations like the World Bank, OECD, FAO, and IFPRI have continued to emphasize the importance of trade liberalization and of concluding the Doha Round both before and after 2006, while NGOs, such as Oxfam and ActionAid, have continued to recommend the cut of rich country subsidies and the importance of government regulation and protection of poor countries’ agri-food markets (Swinnen et al. 2011).