Source: 2010 Sven Torfinn/Panos
Strong infrastructure is essential to link households in rural farm communities such as this one to urban markets.

Annual Report 2009

A global system of trade, markets, institutions, and infrastructure that functions effectively for developing as well as developed countries will help reduce poverty and food insecurity worldwide.

Institutions and Infrastructure for Market Development

In an effort to help rural markets function more efficiently, IFPRI researchers evaluate the infrastructure that gives users access to those markets. In the Ethiopia Energy Access Project, for example, researchers measured the effects of rural households’ access to electricity while promoting the adoption of energy-efficient light bulbs. The impact evaluation completed for this project played a crucial role in the development and implementation of the Comprehensive Africa Agricultural Development Programme’s framework for increasing market access by improving rural infrastructure and trade-related capacities. In addition, the World Bank and several other multilateral agencies adopted IFPRI’s assessment design as a best practice.

Policymakers must also develop and strengthen institutions to mitigate the risks faced by the rural poor. Erratic rainfall is one of the biggest challenges rural farmers face; drought causes short-term devastation and perpetuates long-term poverty by causing farmers to sell assets and forgo investments. Affordable, flexible, and easy-to-understand weather securities (or, “weather tickets”), developed and evaluated by IFPRI researchers over the past year, are one approach to protecting farmers against such risks. Under such a scenario, farmers and other economic agents affected by weather risks purchase weather securities that pay out for moderate or severe reductions in rainfall. Participants can choose a portfolio of securities depending on their particular risk profile. A recent pilot program in Ethiopia showed a high uptake rate by rural farmers.

Other focal areas under the Globalization, Trade, and Markets theme include: