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Archive for April, 2014

Really a nontraded commodity?, part 3: Potato trade in Uganda and beyond

DSCN1115 At the end of June 2012 we visited the potato wholesale market and the offices of the market information service Farmgain Africa in Kampala, Uganda to learn about trade in potatoes (called “Irish potato” in Uganda) in the country and the Eastern Africa region. Unstructured interviews have been held with traders, representatives of Farmgain and other experts. Here is what we’ve learnt:

Potato production in Uganda

According to the information received from the persons interviewed, most of the production of potatoes in Uganda is located in the Kabale region in the South of the country and in the Mt. Elgon region in the East. Potatoes are a commercial crop in Uganda. Farmers sell up to 80% of their harvest, but also retain a small part for own-consumption and as seed for the following cropping season.

Potato trade in Uganda

For trade within Uganda, potatoes are purchased by traders directly from the farmers in the production regions and taken to the wholesale market in Kampala. Kampala serves as a hub for potatoes in the countries and inter-regional trade only takes place if an importing region is on the route from a production region to Kampala.

Traders from Kampala trade internationally. Potatoes are brought from the Kampala market year-round to South Sudan. Markets in the DRC, Kenya and Rwanda are supplied mainly seasonally (Kenya during March/April and Rwanda during September/October). These countries, however, are also supplied directly from the production regions. Potatoes are directly taken from Kabale to Rwanda and the DRC. Kenya receive potatoes from the production regions in the East. Trade to the neighboring countries is cross-border, but also goes inland, for example to the capitals Kigali and Nairobi.

Also, the markets are well connected through the flow of price information. Traders use mobile phones to transmit information on market prices within the country and from/to neighboring countries (South Sudan, Kenya). As a consequence, international trade is responsive to price signals and arbitrage appears to take place. For example, at the time of the visit potatoes from Kenya were present on the market, according to the traders a consequence of the relatively high market prices in Kampala.

Potatoes traded on the wholesale market in Kampala are differentiated according to their intended end-use as table potatoes, for chipping or for French fries. These different qualities command different prices. While there is a certain price differential between the qualities, the traders confirmed that the prices moved together, e.g. if prices of one quality rise, prices of all other qualities increase as well.

[This blog post is basically a reproduction of a short report I just found on my harddrive. It can be seen as a complement to earlier work on trade in potatoes as was presented in “A look at the international potato trade network“.]

Simulation modeling for foresight analysis and ex-ante impact assessment in potato and sweetpotato

Is it possible to use large scale agricultural simulation models for the analysis of crops like potatoes and sweetpotatoes?

Yes! The Global Futures for Agriculture and Strategic Foresight (GFSF) project, which has the objective of developing and applying an integrated simulation modeling framework for the comprehensive analysis of trends and technology impacts in the CGIAR mandate crops and systems, is doing exactly this. At least the part of this research collaboration of all in all 12 centers of the CGIAR which is taking place at the International Potato Center (CIP), as was explained in a seminar held on 24 April 2014 at the CIP Headquarters in Lima.

The core component of the modeling framework developed in the project is the International Model for Policy Analysis of Agricultural Commodities and Trade (IMPACT), an economic partial equilibrium model of the world agricultural sector. IMPACT has the capability of generating forward looking global analyses of supply, demand, prices and trade of 56 agricultural commodities in 320 geographic regions, taking into account major drivers like

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Rather very far foresight

This blog is about foresight. And here is a nice site on foresight of the more ambitious kind: Centauri Dreams – Imagining and Planning Interstellar Exploration.

Thinking in the long run, Earth may be hit by a asteroide of the size that wiped out the dinosaurs approximately every 100 million years (at least according to that not so well documented source I just found). For this reason alone, not to speak about any other adverse factors that might put the survival of our human race into jeopardy, moving out to other planets might be a reasonable strategy of risk diversification. We might be well advised to dedicate at least a little bit of time to reflecting about these issues.

Or, to say it with the blog:

Ultimately, the challenge may be as much philosophical as technological: to reassert the value of the long haul in a time of jittery short-term thinking.

 

Dragon Kings and the predictability of crises

In a TED talk “How we can predict the next financial crisis”, ETH socio-physicist Didier Sornette discusses the possibility of the prediction of extreme events in complex social or biophysical systems and presents examples where this is possible, and how.

His argument is based on the notion that extreme events – termed “dragon kings” – are preceded by specific warning signs that are the outcomes of processes like super-exponential growth that take place in dynamical and complex systems. Therefore, such extreme events that often manifest themselves as crashes and crises are essentially predictable.

 

It goes without saying that the presentation is far too short. It therefore should be regarded as an invitation to diving deeper into the work by Sornette and his colleagues.

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