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in developed countries even without government protection and subsidies as long as product prices are competitive with crude oil, flexible-fuel vehicles have a significant presence, and adequate infrastruc- ture for distribution exists. In developing countries like Mozambique, Senegal, and Tanzania, the familiar problems of poor infrastructure and low productivity in agriculture are likely to pose additional challenges to national biofuel programs. However, if appropriate investments and logistical efforts within the agricul- ture sector are made (and if governments are realistic about the high level of support necessary during the early stages of a program), promising possibilities exist that could benefit local farmers.


2 GLOBALIZATION, TRADE, AND MARKETS


GLOBALIZATION AND MARKETS While open and liberalized agricultural markets can encourage agriculture-led economic growth in devel- oping countries, ineffective policies, weak institutions, and inadequate infrastructure can impede progress toward a market-oriented economy. One of the activi- ties IFPRI engaged in this past year to help clear a path for progress was the African Growth and Devel- opment Policy (AGRODEP) Modeling Consortium. This new initiative launched by IFPRI and several partners aims to position African experts—rather than external actors—as leaders in the study of strategic develop- ment issues in Africa and the broader agricultural growth and policy debate. AGRODEP will facili- tate use of economic modeling tools, promote access to existing data sources, develop meth- odologies and standards to improve data quality, provide training workshops and research grants, and support collaboration between African and international researchers. By sharing core eco- nomic models; establishing a central web-based database for statistical, economic, and geospatial data; and combining a network of experts with a community of practitioners, AGRODEP is poised to equip African researchers with the tools nec- essary to perform science-based research and


solve locally relevant agriculture-related challenges through sound policies.


INSTITUTIONS AND INFRASTRUCTURE FOR MARKET DEVELOPMENT In Central America, IFPRI researchers developed and implemented a poverty scorecard system to deter- mine the allocation of development grants that link smallholders to markets. In order to better tar- get grants and investments to the rural poor, the scorecard system uses an innovative methodology to assess potential projects in terms of both impact (including spillover effects) and sustainability. To date, there are nine projects (in El Salvador, Guatemala, Honduras, and Nicaragua), which have nearly 6,000 beneficiaries—50 percent of whom are women—who live in areas with high levels of poverty.


PARTICIPATION IN HIGH-VALUE AGRICULTURAL MARKETS In 2010, IFPRI’s study on cereal availability in Ethio- pia drew to a close. The project found that cereal procurement by the government, the World Food Programme, or other nongovernmental organizations should not have significant impacts on market prices; similarly, increasing cash transfers to social safety net beneficiaries should not cause cereal price inflation. To minimize the impact of strategic reserves on cereal prices, researchers recommend linking the operation of grain reserves with the operation of social safety net programs. These findings (along with results from a separate IFPRI assessment of Ethiopian agriculture)


Nicaragua: Facilitating market integration for small-scale farmers can help increase incomes, efficiency, and access to modern value chains.


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