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Regional integration is making steady progress in Africa and a key objective is to improve the prospects for industrialization by expanding the regional market. This paper draws on a combination of trade data analysis and industry case studies to better understand the links and synergies between regional value chains and regional integration. The trade data and case studies of three diverse sectors (apparel, food retailing, and automotive) demonstrate the expansion and diversity of regional trade and regional value chains in Southern Africa. This diverse composition of regional exports is suggestive of an opportunity to further enhance industrial development through intra-regional trade. The long-term sustainability of Southern African regionalism depends on the recognition of the importance of regional industrial policy that takes account of the dynamics driving global and regional value chains and facilitates regional linkages across all these sectors.

Ce rapport présente les principaux résultats et les principales conclusions de l'étude sur les marchés agricoles à Madagascar menée conjointement par la Banque Mondiale et le Centre de coopération internationale en recherche agronomique pour le développement (CIRAD). L'étude poursuivait quatre objectifs : (i) Pour les produits agricoles de base et groupes de produits sélectionnés, décrire la structure de la production et de la consommation, les échanges commerciaux sur les marchés nationaux et internationaux et les prix ; (ii) Pour les produits agricoles de base et groupes de produits sélectionnés, décrire les principales filières existantes en mettant en exergue la structure des marchés et leurs degrés de concentration, les agents concernés, les activités réalisées, les mécanismes de coordination et les principales sources de risques et d'incertitude ; (iii) Pour chaque grande filière identifiée, estimer les coûts et marges pour évaluer sa performance et identifier les goulots d'étranglement qui entravent sa compétitivité ; (iv) Identifier les mesures politiques et institutionnelles, concernant les différents domaines d'intervention, pour améliorer la performance des filières et accroître la compétitivité des produits cibles.

In 2000, as part of its strategy for growth and poverty reduction, the Government of Rwanda set a goal to increase per capita income from US$230 to US$900 and halve the incidence of poverty by 2020. Two years after those targets were established Rwanda's first Poverty Reduction Strategy Paper (PRSP) projected that GDP growth in the range of 6 to 7 percent would be needed over the long term for those targets to be realized. The principal sources of growth in the short to medium term were to be the agriculture and manufacturing sectors, with agricultural projected to start at 5.2 percent and accelerate over the period due to productivity improvements. Manufacturing growth was projected to rise sharply to 11.5 percent, based on the expansion of manufacturing capacity in agro-processing, and then slow to a more sustainable level of 7 percent. Between 1995 and 2005, real GDP grew at an average annual rate of 10 percent as the economy recovered from the effects of the 1994 genocide. Real GDP growth is now slowing, however. Between 2001 and 2005, average annual GDP growth averaged only 5.2 percent. If growth continues below 6 percent, this will be insufficient to reach Government's development targets. Government therefore needs to quickly put in place policies to accelerate growth. Transforming the agriculture sector will be a critical element of any growth strategy. Agriculture accounts for 35-40 percent of GDP, and employs around 80 percent of the population. It is also the main source of foreign exchange, and is the primary source of inputs for the manufacturing sector. Yet agricultural growth has been disappointing. Between 2001 and 2005, agricultural growth averaged 4.2 percent per year, below the target range of 5 to 8 percent set out in the PRSP. In recognition of the need to stimulate further sustained growth in agriculture, the government is now poised to identify and prioritize the key interventions. This paper aims to assist government in prioritizing the key measures by examining how the level of agricultural growth needed to achieve the government's policy objectives can be achieved. Some in Rwanda advocate the promotion of export crops, both traditional export crops (e.g., coffee, tea, pyrethrum, hides and skins) and non-traditional export crops (e.g., cut flowers, fruits, vegetables, essential oils, vanilla, silk, macadamia). Others argue that agricultural growth can best be stimulated in the short- to medium-term by increasing productivity in food staples, both crops and livestock. This debate mirrors those ongoing in many other developing countries, in sub-Saharan Africa and elsewhere. An economy-wide, multi-market model (REMM) was developed to test the likely payoffs to alternative agricultural development strategies. The REMM is disaggregated to the sub-national (provincial) level and includes 30 agricultural sectors (commodities) and two aggregate non-agricultural sectors. Eight household types are identified within each province according to size of landholding and gender of household head. The economy-wide model is linked to a micro-simulation model that includes all households sampled in a nationally representative survey (1999-2001 Household Living Condition Survey). The macro-micro linkage framework permits assessment of the likely impacts of alternative policy scenarios on growth, incomes and poverty, and food security at national, sub-national, and household group levels. The model was first used to simulate a base run scenario representing the "business as usual" option, under which agricultural and non-agricultural growth are assumed to continue along current trends. Alternative growth scenarios were later evaluated relative to this baseline. The modelling results show that business as usual is not an option if Rwanda is to meet its national development targets, including the Millennium Development Goals (MDGs) and the targets agreed to under the New Economic Partnership for Africa's Development (NEPAD). The base run scenario highlights that a continuation of current policies will bring about a modest reduction in the national poverty rate, but the absolute number of people living below the poverty line will increase because of population growth. Food self-sufficiency at the national level will be eroded in the face of demographic pressure and rising food imports. The simulations conducted using the REMM indicate that rapid and sustainable growth in Rwanda's agricultural sector is achievable only if the productivity, profitability, and competitiveness of agriculture is improved. Therefore, the priority measures identified focus on increasing investments in land and water resources, strengthening extension, promoting the performance of both domestic and export markets. Key to this will be strengthening support to producer organizations. The simulations produced a number of insights to inform policy design: - Agriculture has the potential to be a leading engine of growth for Rwanda's economy over the short to medium term - Within agriculture, the main drivers of growth will be food staples, including livestock. - Staple-led growth is more pro-poor than export-led growth. - Growth in staples will reduce the nation's food deficit, but it will not eliminate imports of all commodities. - Growth in agricultural exports will help to reduce the total trade deficit, but it will not be able to eliminate it completely. - Agricultural growth will contribute to the attainment of the first MDG of halving poverty by 2015, but agricultural growth alone will not to be sufficient. These findings from Rwanda are relevant for the many other developing countries, in sub-Saharan Africa and also in other regions, in which policy makers are struggling to unlock the power of agriculture to serve as a driver of growth and poverty reduction. In recent years, much attention has focused on boosting agricultural growth by promoting the development of high-value export crops. The REMM simulation results serve as a reminder that in agrarian economies in which a large proportion of rural households continue to engage in production of food staples destined for home consumption, investments aimed at raising the productivity of food staples are likely to have a much greater impact in the short to medium term in fostering broad-based, pro-poor growth.

Interest in the economics of plant breeding first emerged during the late 1960s and early 1970s following the well-known green revolutions in wheat and rice. Since that time, few branches of agricultural research have been subjected to as much scrutiny as plant breeding. Impacts assessment studies consistently conclude that the economic benefits generated by successful plant breeding programs are large, positive, and widely distributed. Case studies repeatedly find that investment in crop genetic improvement generates attractive rates of return compared to alternative investment opportunities. Similarly, case studies consistently show that the welfare benefits resulting from the adoption of modern varieties (MVs) are broadly shared by producers and consumers in both favored and marginal environments. Swayed by the large body of empirical evidence that supports these findings, governments, lending agencies, philanthropic organizations, and private corporations have invested millions in plant breeding research. But how reliable are the results of studies that estimate the benefits of plant breeding research? Are the methods used to conduct such studies theoretically sound? And are the data sufficiently complete and accurate? This paper reviews methods used to estimate the benefits of plant breeding research and discusses methodological issues and practical challenges that often receive inadequate attention in applied impacts work. Our goal is not to question the validity of the broad conceptual frameworks used to estimate the benefits of plant breeding research (e.g., economic surplus approach, production function approach). Nor is it our intention to examine theoretical issues that complicate research evaluation in general. Rather, the objectives of the paper are to examine problems that may arise during empirical evaluation of plant breeding research, to discuss what can happen if those problems are ignored or overlooked, and to propose workable solutions. The problems that affect the empirical evaluation of plant breeding research can be grouped into three general categories: measuring the adoption of MVs; estimating the benefits associated with adoption of MVs; and assigning credit for plant breeding research. In principle, estimating the area planted to MVs should be relatively easy. In practice, it is often very difficult. Important issues in estimating the benefits associated with MV adoption include the relationship between experimental and farm level yields; the relative effects of improved germplasm and improved crop management practices; maintenance research; non-yield benefits; and constructing counterfactual scenarios. The existence of spillovers in plant breeding research increases the overall benefits generated by the global plant breeding system, but it also complicates the task of assigning credit among individual breeding programs. CIMMYT researchers, working in collaboration with colleagues from national agricultural research organizations, have conducted a series of studies designed to document and quantify the impacts of international maize and wheat breeding research. Drawing on lessons learned from the CIMMYT studies, each of these three sets of problems that can affect the empirical evaluation of plant breeding research are discussed in detail, and practical guidelines are presented to help those interested in conducting applied impacts studies avoid common pitfalls that if ignored may lead to incorrect empirical results.

This report, which updates and extends the findings of an earlier CIMMYT study published in 1994, documents the impacts of international maize breeding research in the developing world. Covering the period 1966-98, the report reviews public and private investment in maize breeding research, describes the products of public and private maize breeding programs, estimates farm level adoption of modern varieties (MVs), and estimates the gross value of additional grain production attributable to international breeding efforts. Although private companies have greatly increased their investment in maize breeding research in recent years, public maize breeding programs still play an important role, especially in breeding for subsistence-oriented farmers. Seed sales data show that the maize seed industry in many developing countries has effectively been privatized and that hybrid seed sales now dominate sales of all other seed types. The area planted to MVs continues to expand at an impressive rate. Maize MVs are currently grown on at least 58.8 million ha in developing countries, including at least 21.2 million ha planted to MVs that contain CIMMYT germplasm. The gross value of additional grain production attributable to the adoption of maize MVs in developing countries is estimated to range from US$ 3.7 million to US$ 11.1 billion per year. Analysis of varietal pedigrees shows that breeders in both the public and private sectors have made extensive use of CIMMYT germplasm. Over 54% of publicly bred MVs released in the developing world since 1966 have contained CIMMYT germplasm. The pedigrees of many privately bred cultivars are confidential, but CIMMYT germplasm was present in 58% of MVs developed by private breeding programs being sold in the late 1990s for which pedigree information is available. The gross benefits attributable to CIMMYT's maize breeding program are estimated to range from US$ 167 million to US$ 1.5 billion per year.

Factors affecting the diffusion of hybrid maize are explored using a unique data set from 18 countries in Latin America and the Caribbean. Our findings not only validate the conventional profitability-based explanations of farmer adoption behavior, but also confirm the importance of supply-side factors, providing empirical support for the life cycle theory of seed industry development.