Download Impact of HIV/AIDS on Agriculture

Impact of HIV/AIDS on Agriculture:
Macro- and Micro-Economics Analyses
Joel Negin
Economics of Food and Agriculture
April 20th, 2004
1
Background
• Based on the stats and my time working in
the HIV/AIDS field in South Africa and
Botswana, it is clear that the epidemic is
wreaking havoc on lives and economies
in the region
• HIV/AIDS is not only a medical issue:
– It impacts social networks, families,
businesses, labor, household decisions,
government policy, security
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Rural agriculture has been dismissed in
many of the economic growth models
• Traditional growth models see agriculture as
something that is quickly moved out of and is not
seminal to the economic growth of a developing nation
– But from 1950s, economists have seen agriculture
as the lagging sector, a source of “surplus” labor as
formalized by W.A. Lewis (1954) and others.
Growth models focused on savings and investment,
then on innovation and on institutions, both mainly
non-farm.
– The puzzling persistence of extreme poverty may
lead to a rediscovery of farm productivity as an
engine of non-farm growth
3
The impact of HIV/AIDS on GDP Growth
• A number of people have tried to assess the impact of
HIV/AIDS on macro-economic growth
And yet, they have generally assessed that HIV/AIDS
will not have a major impact of GDP growth
• “There is more flash than substance to the claim that
AIDS impedes national economic (income) growth,”
Bloom and Mahal
• “Our results have shown that letting the HIV/AIDS
prevalence rate grow without control would have
macroeconomic impacts that are non-negligible,”
Robalino, Voetberg, and Picazo
4
The impact of HIV/AIDS on GDP Growth
• “AIDS prevalence increased more in those countries with
characteristics that are associated with slower growth, and not,
apparently, to AIDS itself having an independent negative
influence on economic growth.” – Bloom and Mahal
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Source: Bloom and Mahal, “Does the AIDS epidemic threaten economic growth?”, Journal of Econometrics
The Demographic Transition
•The “demographic transition” is society’s shift from high
to low birth & death rates, and then having more workingage adults
•How will AIDS impact the “demographic transition”?
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Population size with and without
AIDS, Botswana
7
Source: “Impact of AIDS,” United Nations Secretariat, Population Division
Population growth rate will slow
faster with AIDS
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Source: “Impact of AIDS,” United Nations Secretariat, Population Division
Drop in labor force will have an impact
on economies
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Source: “Impact of AIDS,” United Nations Secretariat, Population Division
Child Dependency
100
No. of children (0-14)
per 100 adults (15-59)
90
80
70
60
50
40
30
20
10
0
E. Asia
S. Asia
Sub-Sah. Africa
Whole World
10
Source: UN Population Division, World Population Prospects: The 2000 Revision
If Macroeconomic studies are not successfully
analyzing the impact of the epidemic, how should we
assess the impact of HIV/AIDS
• Agriculture and rural economies are not really taken into account in
macroeconomic growth studies
– “AIDS-related output losses, income losses, and medical
expenditures will be relatively low, corresponding to the relatively
low productivity, earnings, and utilization of medical services
among the poor,” Bloom and Mahal
• The poor are underrepresented in macroeconomic measures such as
GDP
– Yet, it is the poor and rural and those involved in agriculture who
are most impacted by the HIV/AIDS epidemic
MICROECONOMIC HOUSEHOLD STUDIES
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Household Surveys
• So we move into microeconomic studies to
try to understand the impact the epidemic
is having on the ground
– “From an economic point of view, the primary
impact of the disease manifests mainly
among individual economic agents, i.e.
individuals and households,” Booysen and
Bachmann
– Takes us back to the liminal decisions people
have to make
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Rural Household Decision Making from
• Dercon and Krishnan.
– Poor households cannot or do not allocate nutrition
within the household leading to increased vulnerability
for poor women
– Households are not pareto-efficient
• Fafchamps and Quisumbing
– Education increases income
– With AIDS, women are forced to leave school to care
for ailing family members, less likely to go to school
• Rwanda Household study of how households cope with
illness
– Sell assets, renting land – short-term responses but
hurt long-term survival prospects
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Household Surveys:
Who does AIDS affect?
• Yamano and Jayne, “Measuring the Impacts of Prime-Age Adult
Death on Rural Households in Kenya”:
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Household Surveys:
Change in Crop Cultivation
• Yamano and Jayne:
– Male head of HH death leads to a 68% reduction in net value of HH crop
production
– Female head of HH death causes decline in cereal cultivation while male
death leads to reduction in cash crops
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Source: Yamano and Jayne, “Measuring the Impacts of Prime-Age Adult Death on Rural Households in Kenya.”
Nutrition and HIV
• People who are HIV
positive have greater
nutritional needs
(proteins, etc.) while
being able to work
less
– Cycle of needing
more, working /
contributing less
– Need higher
nutrition foods but
higher nutrition
foods need more
labour
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Source: Gillespie, Haddad, and Jackson, “HIV/AIDS, Food and Nutrition Security,” International Food Policy Research Institute
Rural areas and women are most
affected
• Less health care infrastructure
• Loss of adult labor, skills, and intergenerational
learning
• People coming home to die increases number of
dependents in the home
• Women are most impacted… access to land, to
resources, time, money, dependents
– Studies have documented that rural women
work 12-13 hours a week more than men
– Women comprise about 47 per cent of the
total agricultural labor force
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Impact of HIV/AIDS on Households
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Source: “Impact of AIDS,” United Nations Secretariat, Population Division
Impact of HIV/AIDS on Agriculture
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Source: “Impact of AIDS,” United Nations Secretariat, Population Division
Conclusion: Africa’s economic decline is closely
linked to its agricultural problems
FAO Index of Net Food Output per Capita, 1961-2000
160
150
140
130
120
110
100
90
19
61
19
63
19
65
19
67
19
69
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
80
World
E SE Asia
South Asia
Sub-Sahara
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Conclusion
• HIV/AIDS is destroying sustainability of rural
agriculture and livelihoods
– If Sachs is right about Malthusian trap…
– If the article in week 11 by Gollin, Parente and
Rogerson on the need for a minimum consumption
level of food for economic growth is right…
HIV/AIDS is going to create a poverty trap for
developing countries in sub-Saharan Africa
– Can Africa overcome its agricultural problems without
addressing the scourge of AIDS?
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Policy Prescriptions
• Women-only community organizations,
savings groups
• Increase security of land tenure
• Give subsidies to families that take in
orphans
• Agricultural technology to increase yields
• Encourage women to farm cash crops, not
just cereals
• Give access to credit to families who lose
head of household
• Provide ARVs – what will this do?
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Additional Thoughts
• Where are the studies on the economic
impact of malaria or measles in Africa?
– Is there too much focus on AIDS?
– Let’s use this understanding of the
impact of poverty and disease on microand macro-economics to address health
more generally
• Clinics, physicians, research, drugs,
political will
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