Sustainable agrifood systems (AFS) provide food security and nutrition without compromising economic, social, and environmental objectives. However, many AFS generate substantial unaccounted for environmental, social, and health costs. True cost accounting (TCA) is one method that adds direct and external costs to find the “true cost” of food production, which can inform policies to reduce externalities or adjust market prices. We find that for Kenya— considering the entire food system, including crops, livestock, fishing, and value addition sectors at the national level—external costs represent 35 percent of the output value. Social costs account for 73 percent of the total external costs, while environmental costs are 27 percent. In contrast, in Viet Nam, where total external costs represent 15 percent of the output value, the environmental costs (75 percent) dominate social costs. At the subnational level, in the three Kenyan counties (Kisumu, Vihiga, and Kajiado) covered by the CGIAR Research Initiative on Nature-Positive Solutions (NATURE+), external costs (or the true cost gap) represent about 30 percent of all household crop production costs. Those external costs are overwhelmingly dominated by social (84 percent) over environmental (16 percent) externalities. In Viet Nam's Sa Pa and Mai Son districts, external costs represent about 24 percent of all household crop production costs. Environmental externalities (61 percent) are greater than social ones (39 percent). In Kenya, forced labor is the main social (and overall) external impact driven by factors ranging from "less severe" financial coercion to "more severe" forms of physical coercion. Land occupation is the most important environmental impact, resulting from occupation of lands for cultivation rather than conservation, while underpayment (low wages) and low profits are important social costs that are closely associated with the prevailing gender wage gap and occurrence of harassment. Soil degradation is the only other environmental impact, linked with the use of inorganic fertilizers (60 percent of households) and pesticides (36 percent). In Viet Nam, land occupation is the most important external impact, followed by soil degradation and contributions to climate change, primarily due to widespread use of inorganic fertilizers (98 percent of households) and pesticides (93 percent). Underpayment and insufficient income are significant social costs, followed by the gender wage gap and child labor. Crop production systems in Kenya exhibit relatively high labor-related costs compared with nonlabor inputs, with relatively lower intensity in the use of inorganic fertilizer and other chemical inputs and lower crop yields. This production system leads to relatively greater social externalities. Conversely, crop yields in Viet Nam are significantly higher than those in Kenya, likely due to the extensive use of inorganic fertilizers representing the largest direct cost component and leading to a relatively higher level of environmental externalities. Because external costs represent a significant part of the total cost of food production, policy and investments to minimize these costs are essential to a nature-positive AFS that is environmentally sustainable and socially equitable. Strategies to reach this goal include regulatory adjustments, investments in resource efficient infrastructure and technologies that minimize costs, and the prudent management of environmentally impactful production inputs and factors.

This analysis explores the relationship between agricultural R&D investments and rural poverty reduction, and the prevalence of undernourishment in sub-Saharan Africa (SSA). It uses a panel data set of internationally comparable poverty dis-aggregated by urban and rural areas, country level undernourishment, and ASTI data on R&D investments and derived indicators. The study uses agricultural R&D knowledge stocks (KS) to account for the lagged effects of research through depreciation and gestation period of investments, and applies causal mediation analysis to assess the impact of KS on poverty and hunger and measure the relative contribution of KS-induced agricultural productivity growth on those outcomes. Evidence suggests that, while SSA growth in KS has been relatively slow, it helped reduce rural poverty and undernourishment – the percentage point reduction in rural extreme and moderate poverty of a 1% annual increase in KS is 0.218 and 0.146 percentage points per year, respectively. Mediation analysis indicates that a fifth of the KS effect on extreme rural poverty, and a quarter of the KS effect on moderate rural poverty, can be attributed to KS driven gains in agricultural labor productivity. Likewise, KS growth reduces undernourishment – a 1% annual increase in KS leads to a drop of 0.132 percentage points per year in the prevalence of undernourishment, with about 40% of that effect mediated through gains in agricultural land productivity. These results indicate that KS supports poverty and hunger reduction through benefits on-farm and beyond it. They also suggest that there is room for strengthening the role of R&D KS productivity enhancing innovations. Given the current low levels of investments in R&D and resulting KS, increasing its levels will be critical, but that alone is not sufficient. Policy makers will have to rethink the way the innovations from R&D get scaled up and pay attention to the necessary complementary policies and investments that enable a sustainable pathway leading to greater productivity growth and development impacts.

Sustainable food systems provide enough quality, healthy, and affordable food to all without imposing a burden on planetary and social boundaries. By this standard, it is quite clear that food systems in many countries are not sustainable as they generate substantial environmental, social, and health costs while failing to provide affordable food to all (FAO et al., 2020). This implies the need to have a good understanding of the extent to which those externalities are present in country specific food systems. The key challenge is that such externalities are not reflected in market prices (Baker et al., 2020), being therefore hidden factors to drivers of choices by market players, as the link between market activity and those social and environmental harms is not directly visible or reflected in the incentives that drive economic systems (UNFSS, 2021). Internalizing the externalities of the food systems will require the full estimation of costs, including the measurement of externalities through “True Cost Accounting” (TCA) approaches. This document provides the analytical framework for the application of approaches in a research study to measure the true costs of food in Kenya and Vietnam. It focuses on: o Key research questions, their relevance, and policy implications o How the TCA analytical framework fits in The Economics of Ecosystems and Biodiversity (TEEB) framework o Country selection and geographic focus – national, sub-national o Data requirements for estimating the true costs, including household surveys, workers’ surveys, externally compiled Global Impact Database (GID), and monetization factors. o A step-by-step process for estimating the true costs in the study area and country level GID analysis.

This paper looks at the prioritization of agricultural value chains (VCs) for the allocation of R&D resources that maximize development outcomes (poverty, growth, jobs, and diets). Considering that growth in VCs affects those various outcomes differently, as expansion pathways result in the diverse use of production factors and inputs, trade-offs from linkages across sectors, and changes throughout the agri-food system, this analysis uses (i) the RIAPA dynamic computable general equilibrium model to identify which agricultural VCs, when expanded through TFP growth, provide the strongest effects on the development outcomes of interest; (ii) the perpetual inventory model (PIM) to represent the lagged effect of research through knowledge stocks of agricultural R&D investments; and (iii) information on the elasticities of VC agricultural activity TFP with respect to agricultural R&D knowledge stocks, to discuss the VC priority allocations of R&D resources in Senegal. Results indicate that no one VC (crop- or livestock-related) is the most effective at improving all development outcomes. When accounting for policy preferences that attribute relative priority weight to development objectives, results (based on a ranking scale) indicate that R&D investments for maximizing development objectives can be most effective in Senegal’s VCs for traditional export crops (growth, diets, jobs, and to some extent poverty), groundnuts (poverty, diets, and jobs), rice (poverty and jobs), poultry/eggs (diets and jobs), sorghum/millet (poverty and growth), and cattle (diets and growth). Other promising VCs with potential effects at scale if strategically targeted include vegetables (poverty, diets, and jobs), oilseeds (poverty and growth), and fruits (diets and jobs). While these results can inform strategies aimed at improving multiple development outcomes, future modeling needs to focus on deepening the standardization and integration of R&D investments costs into the framework, disentangle the relevance of different types of R&D investments sources, and bring together other factors and complementary agrifood system investment dimensions relevant to sustainable and inclusive agricultural VC growth.

Mozambique was one of the fastest-growing countries in sub-Saharan Africa between 2009 and 2014, with annual growth averaging about 7 percent (INE 2020; World Bank 2023a). However, adverse economic circumstances resulted in a significant weakening of economic growth, which averaged only 4.6 percent over the period 2014 to 2019 (INE 2020; World Bank 2023a). Restrictive COVID-19 policy measures introduced in 2020 further stifled the economy, resulting in negative growth in 2020 and low growth in 2021. Like many other countries, Mozambique was adversely affected by global commodity market disruptions resulting from the onset of Russia-Ukraine war in 2022 and the global recession in 2023 (Arndt et al. 2023; Diao and Thurlow 2023). Mozambique’s growth is expected to recover in the coming years, with projections of 5.0 percent growth in 2023 and 8.0 percent in 2024 (World Bank 2023b), suggesting the economy is inching back toward its pre-pandemic growth trajectory.

This study utilizes a recursive dynamic general equilibrium model calibrated with data for Tanzania to explore the link between agricultural and rural development spending and four development outcomes: economic growth, job creation, poverty reduction, and diet quality. Results show that no single expenditure option is the most effective in achieving all four desired development outcomes for Tanzania. Productivity-enhancing agricultural interventions in horticulture are effective at generating growth in the agri-food system (AFS) and improving diets, but have a limited effect on employment. Supporting cereal producers has large effects on growth and poverty reduction, with relatively high returns per dollar invested, but its effect on diet quality is weak. Providing livestock services to milk and poultry farmers consistently ranks high across the outcome indicators, with strong employment effects on downstream AFS. Crop research and development and feeder roads generate moderate impacts on all four outcomes. Partially reallocating the budget towards the most cost-effective spending options can substantially increase the development effectiveness for Tanzania of agriculture sector support expenditures. The approach adopted in this study can help policymakers design and prioritize agricultural interventions and expenditure portfolios that better reflect the country’s broad food system.

Tanzania’s agriculture faces persistent low crop productivity due to endogenous and exogenous factors, particularly low and unpredictable rainfall, and the incidence of pests. To address these challenges, the government and partners are making efforts to develop and deploy Genetically Modified (GM) Maize varieties with drought tolerance and insect resistant traits (WEMA), and Cassava Brown Streak Disease (CBSD) resistant varieties. This analysis overcomes limitations from earlier assessments of the impacts of those GM crops by accounting for trade-offs in resource competition and considering the indirect effects of adoption and yield gains from GM maize and cassava varieties on the broader economy, the Agri-Food System (AFS), and on household level outcomes. It extends the BioRAPP analysis to an ex-ante economywide framework. We reveal several findings. First, GM maize and cassava (individually and jointly) have positive impacts in the economy, the AFS, and the poverty, particularly in rural areas and among the poorest households. Second, given its relatively greater relevance in output and employment, and the stronger linkages in the AFS, the effects of GM maize on GDP and AFS growth, and poverty is relatively stronger than those from GM cassava. Third, as expected, relatively greater effects are found in higher adoption and high yield gains scenarios, and, in each scenario, the effects on the poorest households are greater than that for the higher quintiles. Furthermore, differential impact across scenarios is also greater amongst the poorest, while the differences are minimal for the top quintile. Finally, the high variation of results across scenarios, and the significant effects of the high adoption/high yield change scenario, suggest that efforts will be critical to ensure the realization of the maximization of adoption rates while ensuring the materialization of the yield growth potential of the GM varieties through the efficient use of technical recommendations on crop production management, and the introduction of the right investments and policy incentives.

This study investigates the living income gap among coffee smallholders in central Kenya. It uses detailed survey data collected from coffee farmers organized in cooperatives and from coffee farm workers in Nyeri and Murang’a counties. Our analysis finds that coffee smallholders earn an average of only 109 KSh per day, just 35 percent of the 312 KSh living income benchmark, with the gap being particularly severe in Murang’a and among those with smaller landholdings. Sensitivity analyses show that enhancing prices paid to farmers and improving yields can partially reduce the income shortfall. For instance, doubling both parameters, especially when coupled with a 50 percent increase in farmers’ non-coffee income, lowers the incidence of households below the benchmark from more than 90 percent to about 67 percent. Yet, even under these relatively optimal conditions, the persistence of a significant gap underscores deep structural constraints in the local economy. Policy recommendations therefore call for a multidimensional approach that improves production efficiency, improves and stabilizes prices, promotes income diversification, and strengthens institutional support.

Key takeaways: Gender-based environmental and social external costs create substantial economic inefficiencies in the agricultural sector. The gender wage gap contributes 12.8% to total external costs. Women's limited access to resources leads to reduced productivity, with female farmers investing 36% less in inputs than their male counterparts. Workplace harassment, which disproportionately affects women, accounts for 10.8% of total external costs. Unequal land management practices (women managing smaller plots) and having restricted access to improved agricultural inputs create additional inefficiencies in resource allocation and production outcomes.

Several factors contribute to the low level of improved variety use in Ethiopia. Among those, on the supply side, is the limited availability of seed in the volumes, quality, and timeliness required by farmers, which is partly a result of limited public and private investment in the sector. Beginning in 2011, the Government of Ethiopia introduced a novel experiment-the Direct Seed Marketing (DSM) approach-to reduce some of the centralized, state-run attributes of the country’s seed market and rationalize the use of public resources. DSM was designed to incentivize private and public seed producers to sell seed directly to farmers rather than through the state apparatus. This study is the first quantitative evaluation of DSM’s impact on indicators of a healthy seed system: access to quality seeds, on-farm productivity, and market participation of smallholders. Using a quasi-experimental difference-in-differences approach, the study finds that DSM led to a 26 percent increase in maize yields and a 5 percent increase in the share of maize harvest sold. DSM also led to improvements in seed availability for all three of Ethiopia’s major cereals: maize, wheat, and teff. However, DSM’s effects on yields and share of harvest sold are not statistically significant for wheat and teff. These crop-specific differences in performance are likely explainable by biological differences between hybrid maize and openly pollinated varieties of wheat and teff that incentivize private sector participation in maize seed markets over wheat and teff seed markets. These differences demand different policies and perhaps even institutional approaches to accelerating adoption between hybrids and OPVs.