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

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 GargCornell University

May 23, 2012 seminar atUniversity of California at Riverside

• “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 ag

dev’t– More “culturally appropriate” foods?

• The risks:– Market disruption from demand interventions– Food safety/quality

Background: The Policy Issues

• 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).

– Gnagna and Namentenga Provinces• 364 schools serving 58,227 primary school students• Surplus cowpea production; net food buyers

Background: Burkina Faso and LRP

Methodology and Results: LEAP and MYAP


• Procurement:– Vitamin-A Fortified Vegetable Oil

• Competitive Tender—Ouagadougou and Bobo Dioulasso• 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


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?

Methodology and Results: Overview

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***

Methodology and Results: Timeliness

LEAP MYAPDiverse U.S. Programs

(63 obs)0 0

(Dec 15 - J an 28) (J une 8, 2010)MYAP: Shipment from U.S. 27MYAP: Arrival in Lomé 32

Availability for Quality Testing 9 33 to 45LEAP: Contract for oil 14LEAP: Contracts for millet 11

15.3 47(March 25-April 7) (April 14 - J une 3)

Delivery

0

34.96

Call Forward / Identification of suppliers

Average Time (in weeks from procurement startdate)KEY DATES

Evidence from Burkina: Cost• Detail of Costs, and Costs per child

Methodology and Results: Cost

LEAP MYAPCommodity Cost (& Vouchers)

Millet / bulgur wheat 339.27$ 386.73$ Cowpeas / lentils 546.45$ 585.85$ Vegetable oil* 2,065.00$ 1,322.12$

Ocean Freight and Transport to OuagadougouBulgur wheat N/A 442.87$ Lentils N/A 442.87$ Vegetable oil N/A 477.41$

Transport to Schools**Millet / bulgur wheat 80.78$ 50.00$ Cowpeas / lentils 20.02$ 50.00$ Vegetable oil 47.04$ 50.00$

Quality TestingMillet / bulgur wheat 18.55$ 15.60$ Cowpeas / lentils 18.55$ 16.37$ Vegetable oil* N/A 8.10$

TOTALSMillet / bulgur wheat 438.60$ 895.20$ Cowpeas / lentils 585.02$ 1,095.09$ Vegetable oil 2,112.04$ 1,857.64$

Cost per Child (for three months)***Combined Ration 9.48$ 15.41$

* 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

LEAP cost 38% less per child than MYAP

Other Comparisons, for the rations delivered (180 grams of millet/bulgur, 45 grams of cowpeas/lentils, 25 grams of vegetable oil):

Methodology and Results: Cost

MYAP Cost (per MT)

% Savings with LEAP

Commodity CostMillet / bulgur wheat 386.73$ 12%Cowpeas / lentils 585.85$ 13%Vegetable oil 1,322.12$ -56%

TransportationMillet / bulgur wheat 492.87$ 84%Cowpeas / lentils 492.87$ 96%Vegetable oil 527.41$ 91%

MYAP LEAPPer Child for 3-months' rations (60 days) 15.41$ 9.48$ Per kilocalorie 0.04$ 0.02$ Per gram of protein 1.61$ 0.95$ Per gram of fat 0.62$ 0.36$

• 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

USDA Contract Result (Avg) USDA Contract GoB Result (Avg)Moisture Content ≤ 11% 5.8% ≤ 13% ≤ 12% 8.7%Damaged Grains --- --- --- ≤ 1% 17.7%Broken Grains ≤ 1% 0% ≤ 1% --- 0.0%Foreign Matter, organic ≤ 1% 0% ≤ 2% ≤ .75% 0.4%Foreign Matter, inert --- --- ≤ 1% ≤ .25% 0.2%Live Insects (per 100g) 0 0.25 0 0 0.095Aflatoxins (ppb) --- 0 --- ≤ 10 0.0396

Quality CriteriaMillet Cowpeas

Methodology and Results: Quality

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

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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: regiont: time period


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Millet Estimation ResultsPrice level impacts(Expected % change)

Point Est. (SE)

Pooled across markets 1.386(3.814)

Procurement markets 0.760 (7.088)Non-Procurement markets 1.525

(4.620)Price volatility impacts(Expected std dev % change)Pooled across markets -1.185

(2.670)Procurement markets -1.990 (4.452)Non-Procurement markets -0.626

(3.337)No discernible impact of millet procurement, in general or in procurement (or non-procurement) markets.


Evidence from Burkina: Recipients

Methodology and Results: Recipient Preferences

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.

Evidence from Burkina: Recipients•


General Preferences (no comparison)


Bivariate Test (Mann-Whitney)

Multivariate Test (Ordered Logit)



Taste LEAP** LEAP LEAP LEAP***Ration Size LEAP** LEAP LEAP*** LEAP**Texture LEAP*** LEAP* LEAP*** LEAP***Appearance LEAP*** LEAP** LEAP*** LEAP***Cleanliness MYAP*** MYAP** LEAP LEAPStorability LEAP*** LEAP*** LEAP** LEAPNutrition LEAP MYAP*** LEAP** MYAP***General Satisfaction LEAP LEAP LEAP LEAP****, **, and *** represent statistical significance at the 10%, 5%, and 1% levels, respectively

Criteria

Commodity PreferredGRAIN (millet / bulgur wheat) LEGUME (cowpeas / lentils)

Preparation Requirements (compared to prior year)






Time MYAP*** MYAP*** MYAP*** MYAP***Effort MYAP*** MYAP*** MYAP*** MYAP***Cost MYAP*** MYAP* MYAP*** MYAPFuel Use MYAP*** MYAP*** MYAP*** MYAP***Water Use MYAP*** MYAP*** MYAP*** MYAPOil Use LEAP* LEAP* MYAP MYAP

Criteria

Commodity Preferred : PreparationGRAIN (millet / bulgur wheat) LEGUME (cowpeas / lentils)

*, **, and *** represent statistical significance at the 10%, 5%, and 1% levels, respectively

Evidence from Burkina: RecipientsExploit 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)

Methodology and Results: Producer Outcomes

•


Evidence from Burkina: Producers


• Transaction Costs / Profitability

– Approximately 30% less time and 40% less distance traveled, on average

Member of LEAP Association Direct Participant(ITT) (ATET)

Number of trips taken to sell cowpeas -0.4 -0.4(-24%) (-24%)

Reported difference from the prior year^ FEWER*** MORE

Total distance travelled to sell cowpeas (km) -11* -14**(-33%) (-42%)

Time travelling to sell cowpeas (min) -32** -29**(-32%) (-29%)

^ These outcomes were ordinal based on Likert-scale questions, and estimated using the ordered logit random effects model.


Random Effects, OLS or Ordered LogitTravel and Time, project year relative to prior year

Results from the Randome Effects estimators are reported in the cases in which they were found to be unbiased, relative to the Fixed Effects models. If found biased, the Fixed Effects estimates are reported. These latter include: the ATET of Price received for cowpeas in project year, and both estimates for Individual transactions to sell cowpeas.



• Transaction Costs / ProfitabilityMember of LEAP Association Direct Participant

(ITT) (ATET)

Price ReceivedPrice received for cowpeas in project year (CFA) -41** +18.9

(+49%) (+53%) Reported difference from the prior year^ HIGHER HIGHER**

Profitability Reported difference from the prior year^ HIGHER HIGHER

RevenueRevenue from cowpeas in project year (CFA) +16,668* +31,091**

(+25%) (+47%)Change project year relative to the prior year (CFA) +1,076** +8,541

(+2%) (+13%)

^ These outcomes were ordinal based on Likert-scale questions, and estimated using the ordered logit random effects model.


Results from the Randome Effects estimators are reported in the cases in which they were found to be unbiased, relative to the Fixed Effects models. If found biased, the Fixed Effects estimates are reported. These latter include: the ATET of Price received for cowpeas in project year, and both estimates for Individual transactions to sell cowpeas.

Random Effects, OLS or Ordered Logit



• 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)?

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Source: SO.NA.GE.S.S.

Answer: LEAP allowed farmers to delay sales and reap the benefits of seasonal market price increases


• Behavioral Impacts (summary)– Ordered Logit estimator, with controls

Member of LEAP Association Direct Participant(ITT) (ATET)

Quality Knowledge +++ +Storage --- +++Small Investments +++Traction Investments ++The "+" or "-" symbols indicate a positive or negative coefficient; the number of signs indicates the significance, +/-, ++/--, +++/--- for 10%, 5%, and 1%, respectively.

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

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.

Thanks for your interest and comments

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

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