Impacts of World Food Program local and regional procurement of food aid on markets, household welfare and food supply chains in Africa

Local and regional procurement (LRP) relative to global food aid deliveries saw a sharp increase from 8% in 2001 to a historical high of nearly 30% in 2011. Despite this growing importance, relatively little is known about the LRP impacts on local market prices, household welfare, and food supply chains, especially in countries where LRP has represented a meaningful share of marketed surplus. This dissertation addresses this knowledge gap using three self-contained but related essays.;Essay one assesses the World Food Program (WFP) LRP effects on the level and variability of market prices for maize in Uganda and Mozambique, and beans in Ethiopia. Using data spanning 2001 to 2011, we employ two complementary methodologies as a consistency check: (1) a vector autoregression (VAR) model, which is a reduced-form econometric approach; and (2) a computational model (CM), which is a structural modeling approach. Results from the VAR show average price increases brought about by LRP are statistically significant, ranging from 2% in Nampula (Mozambique) to 16% in Lira (Uganda). In all three country applications, LRP has no economically meaningful effect on price variability. When LRP is at its historical mean levels, price effects from the CM fall within the 90% confidence bounds obtained from the VAR. This suggests that the two complementary methodologies deliver consistent results.;Price increases induced by LRP purchases have welfare implications for households that buy and/or sell those commodities. In essay two, we use nationally representative household-level data to convert the estimated price increases into estimates of the corresponding household welfare effects. This is accomplished by estimating the household's willingness to accept compensation for the price increase. Due to data limitations, essay two focuses only on maize in Uganda and Mozambique. Average welfare effects in both countries are negative but fairly small in relative terms (less than 1% loss). However, 8.9% of households in Uganda and 6.9% in Mozambique experience welfare gains or losses greater than 3%. Household welfare effects vary substantially in both countries, ranging from -10% to +11% in Uganda and from -7% to +8% in Mozambique.;In addition to these price and welfare effects, the overall effects of LRP activities depend on the systemic effects that WFP is able to induce in food supply chains as the agency goes about its procurement. Essay three, therefore, employs a case study approach to complement the first two essays by investigating traders and processors responses to engagement with WFP and their perceptions of the LRP effects on food supply chains. Essay three focuses on three commodities and four countries: maize in Uganda and Mozambique, beans in Ethiopia, and high energy protein supplements (HEPS) in Ethiopia and Malawi. Two main findings stand out. First, WFP has positively influenced the "quality culture" on maize in Uganda, beans in Ethiopia, and HEPS in Ethiopia and Malawi. Second, WFP operations have spurred market entry in the Malawian and Ethiopian HEPS sectors, have facilitated greater commercial competitiveness of the Malawian HEPS and Ethiopian bean sectors, but have had limited effect on market entry in Mozambique's maize sector.