Optimal allocation of agriculture's public budget can improve transformation and healthy diets access in Ethiopia

Marco V Sánchez; Martín Cicowiez

doi:10.1016/j.jpolmod.2023.09.005

Optimal allocation of agriculture's public budget can improve transformation and healthy diets access in Ethiopia

J Policy Model. 2023 Nov-Dec;45(6):1262-1280. doi: 10.1016/j.jpolmod.2023.09.005.

Authors

Marco V Sánchez¹, Martín Cicowiez²

Affiliations

¹ Agrifood Economics Division, Food and Agriculture Organization of the United Nations (FAO), Viale delle Terme di Caracalla, Rome 00153, Italy.
² Agrifood Economics Division, FAO and Lecturer and Researcher, Universidad Nacional de La Plata, La Plata, Argentina.

Abstract

Agriculture is under transformation in sub-Saharan Africa where millions still do not have access to a healthy diet. Policy makers in this region should find ways to accelerate agricultural transformation while increasing access to healthy diets. Optimizing agriculture's public budget stands out as a handy option. By combining a dynamic computable general equilibrium model and a multi-criteria decision-making technique, and applying them in the context of Ethiopia, this paper points to an important trade-off that policy makers should keep in mind. An optimal allocation of agriculture's public budget aimed at increasing agri-food output, creating off-farm jobs and reducing rural poverty, which are agricultural transformation objectives, will help to reduce the cost of a healthy diet, allowing around 2 million more Ethiopians to afford it. This number could even be higher should policy makers allocate the budget optimally aiming at only lowering the cost of a healthy diet, but at the cost of reducing household income and slowing down transformation.

Keywords: Agricultural transformation; Computable general equilibrium; Economic development; Nutrition; Optimal policy design.