Joanna B. Upton, Erin C. Lentz, Christopher B. Barrett, and Teevrat Garg Cornell University

1. Local Food for Local Schools: The impacts of local procurement for a school feeding program in Burkina Faso Joanna B. Upton, Erin C. Lentz, Christopher B. Barrett, and Teevrat Garg Cornell University May 23, 2012 seminar at University of California at Riverside

2. Background: The Policy Issues • “Food Assistance” rather than “Food Aid” • Rapid expansion in cash, vouchers and, especially, local and regional procurement (LRP) of food aid: • 11% of global food aid flows in 1999, then jumps to 39% by 2008 and then 67% in 2010 following the 2008 Farm Bill LRP pilot and launch of USAID EFSP • New (draft) int’l treaty: Food Aid Assistance Convention • The promise: • More timely and rapid delivery • “Structured demand” can perhaps stimulate agdev’t • More “culturally appropriate” foods? • The risks: • Market disruption from demand interventions • Food safety/quality

3. Background: Burkina Faso and LRP • Burkina Faso: an ideal candidate for LRP? • Frequent food aid recipient • Land-locked, so expensive/slow to reach • Agrarian, with surplus zones • Evaluation opportunity • Natural experiment with partial replacement of food aid from US under a Multi-Year Assistance Program (MYAP) with USDA-funded LP pilot for ongoing school feeding programs runs by the same agency (Catholic Relief Services). • Gnagnaand Namentenga Provinces • 364 schools serving 58,227 primary school students • Surplus cowpea production; net food buyers

4. Background: Burkina Faso and LRP Methodology and Results: LEAP and MYAP

5. Background: Burkina Faso and LRP • Procurement: • Vitamin-A Fortified Vegetable Oil • Competitive Tender—Ouagadougou and BoboDioulasso • 72.1 MTs purchased • Millet • Semi-competitive process through large grain cooperatives • Four unions, providing between 54 and 319 MTs each • 628.1 MTs purchased • Cowpeas • Semi-competitive process through small farmers’ associations • 22 associations, providing between 2.8 and 21.4 MTs each • 143.5 MTs purchased

6. Background: Burkina Faso and LRP

7. Background: Burkina Faso and LRP

9. Methodology and Results: Overview Key Logistical Concerns: • Timeliness: does LRP really deliver faster? • Cost: is LRP really cheaper? • Quality: is LRP equally safe/reliable? Macro-/Meso-level (Markets) Concerns: • Market Prices: does LRP disrupt local markets? Micro-level (Recipients and Communities): • Recipient Preferences: do they prefer local foods? • Producer Impacts: do suppliers benefit?

10. Methodology and Results: Timeliness Evidence from Burkina: Timeliness • Direct comparison (three observations each) versus multiple comparison • Average difference MYAP-LEAP: 31.7 weeks • Average difference, U.S. Average – LEAP: 20 weeks***

11. Methodology and Results: Cost Evidence from Burkina: Cost * For LEAP, the Veg Oil costs includes quality certification ** Estimate for MYAP *** Based on the ration of 180 grams grains, 45 grams legumes, 25 grams oil, per child for 20 rations per month for three months • Detail of Costs, and Costs per child LEAP cost 38% less per child than MYAP

12. Methodology and Results: Cost Other Comparisons, for the rations delivered (180 grams of millet/bulgur, 45 grams of cowpeas/lentils, 25 grams of vegetable oil):

13. Methodology and Results: Quality • Questions and Challenges: • Are quality products available? Is adequate testing available? Are standards (a) locally present, (b) enforceable? • Monitoring of stocks, especially with small-scale suppliers • Replacing spoiled foods

14. Methodology and Results: Market Impacts Food aid and market disruption: • Longstanding concerns about supply-side effects of food aid distribution • Are there demand side effects to worry about? Use secondary data on market prices and a range of control variables to study the relationship between LRP and - market prices - market price volatility

15. Methodology and Results: Market Impacts Estimation Strategy Price Level Impacts: Price Volatility Impacts: X = Full Set of Controls (incl. WFP LRP, rainfall, precip shocks, seasonal dummies, world market price, domestic CPI, transport costs, etc.) c: commoditys: price type (transmission channel) i: region t: time period

16. Methodology and Results: Market Impacts Millet Estimation Results No discernible impact of millet procurement, in general or in procurement (or non-procurement) markets.

17. Methodology and Results: Recipient Preferences Evidence from Burkina: Recipients Exploit natural experiment to test recipient preferences based on food aid sourcing: • Fielded among 120 schools each in MYAP/LEAP • Survey administered to the head school cook. • Ask Likert scale questions (1=low/very unsatisfied to 5=high/very satisfied) about a range of consumption and preparation attributes of the food. • Ask in general/absolute terms and relative to last year, when ALL schools were MYAP-supplied (diff-in-diff) • Complemented by a school director survey covering school characteristics, such as quality of infrastructure, distance to markets, enrollment, attendance, and composition of students.

18. Methodology and Results: Recipient Preferences Evidence from Burkina: Recipients

19. Methodology and Results: Recipient Preferences General Preferences (no comparison)

20. Methodology and Results: Recipient Preferences Preparation Requirements (compared to prior year)

21. Methodology and Results: Producer Outcomes Evidence from Burkina: Recipients Exploit natural experiment to test LRP impacts on smallholder cowpea suppliers: • Fielded among 160 members of LEAP-supplying farmer associations, with 150 control group members of MYAP zone farmer associations • Standard farm survey questions were asked for the project year (2010-2011) and prior year • Use difference in differences estimation for • farmers in LEAP associations (ITT) or • direct participants who sold to LEAP (ATET)

22. Methodology and Results: Producer Outcomes

23. Methodology and Results: Producer Outcomes • Transaction Costs / Profitability • Approximately 30% less time and 40% less distance traveled, on average Evidence from Burkina: Producers

24. Methodology and Results: Producer Outcomes • Transaction Costs / Profitability Evidence from Burkina: Producers

25. Methodology and Results: Producer Outcomes • Transaction Costs / Profitability • 19% higher price received on average (relative to control group) and 47% higher revenue • Association members who sold to LEAP also self-report higher price, as well as improved profitability project year relative to prior year (on a Likert scale) • How, if agencies pay competitive prices (no market impacts)? Evidence from Burkina: Producers Answer: LEAP allowed farmers to delay sales and reap the benefits of seasonal market price increases Source: SO.NA.GE.S.S.

26. Methodology and Results: Producer Outcomes • Behavioral Impacts (summary) • Ordered Logit estimator, with controls

27. Summary: Trade-offs or Synergies? Benefits/Synergies: • Cost Savings all around • 38% lower purchase cost for buyers (CRS) • 40% less distance traveled, and 20% higher price for sellers • Agencies save on transport • Recipients eat what they know and like • Much faster delivery • Easier to enforce product quality standards • Local benefits “on both ends” • Benefits from both the purchase and the distribution “It is a smart child who, when at market, buys his ‘beignets’ from his own mom.” - Mooré proverb

28. Trade-offs/risks: • Buying small works, but… • Can this be scaled up significantly? • Response analysis capacity • Maintaining quality • Commodities people prefer, but… • Preparation advantages? • Nutritional advantages? Overall: local food procurement clearly a success by multiple metrics in Burkina Faso. Merits being made a permanent part of the food assistance toolkit.

29. Thanks for your interest and comments