The Economy Wide Impact Of Sudans Ongoing Conflict Implications On Economic Activity Agrifood System And Poverty

The armed conflict between the Sudanese Armed Forces (SAF) and Rapid Support Forces (RSF) in Sudan entered its sixth month since it erupted on April 15th, 2023, with no signs of ending soon. The war has caused severe humanitarian catastrophe, destroyed key infrastructure, and constrained trade and production activities. Moreover, it disrupted access to public utilities, financial services, and markets, hence, triggering considerable scarcity of goods and services. In this paper, we utilize a Social Accounting Matrix (SAM) Multiplier modeling framework to assess the economywide implications of these disruptions of economic activity, productive resources, and livelihoods. Results reveal that the economy would shrink to nearly half its size before the war, household incomes decline by more than 40 percent in urban and rural areas, and the number of poor people increase by 1.8 million if the war continues until the end of the year. The impact would have been two thirds less should the war have ended before July 2023 and would be one third less if it would end before October 2023. This study therefore calls for rapid interventions from all relevant parties to help reach an end to the fighting.

This study assesses the political economy of the conflict between the Sudan Armed Forces (SAF) and the Rapid Support Forces (RSF) that brought out in April 2023, resulting in massive violence, displacement, and threats to food security. Based on a series of key informant interviews and other secondary materials, this study identifies that the primary underlying driver of the conflict relates to the rise of competition between the SAF and RSF over productive resources, including within the agri-food system. This scenario has been facilitated by a longstanding lack of scrutiny, accountability, and transparency over the distribution of economic rents and commercial holdings between the two factions. Additionally, the capture of rents from different industries and resources has been a key contributor to the geographic expansion of the conflict. As the conflict continues to rage between the two groups and their associates, it continues to impose considerable impacts on different actors within the agri-food system, posing significant challenges to the planting season and crop production, introducing blockades of trade routes, and a near cessation of agro-processing. We discuss these aspects of the ensuing conflict in view of the uncertainty about political and economic developments and propose policy recommendations for rebuilding Sudan’s agri-food system holistically under different scenarios.

Based on a set of economywide databases for Sudan that have detailed content on agricultural production and processing, this study diagnoses the transformation of Sudan’s agrifood system against a background of broad economic growth and transformation. Sudan’s agrifood system registered only modest GDP growth between 2011 and 2019. Moreover, little change was seen in the structure of the system over this period. The share of total employment in agriculture fell significantly, contributing to some structural change in the broad economy. However, agriculture continues to absorb almost half of Sudan’s total employment, while having the lowest labor productivity across the main economic sectors. The growth in Sudan’s agrifood system between 2011 and 2019 was mainly driven by expansion in domestic market-oriented value chains. Agrifood value chains that are focused on exportable or imported commodities remain small with below average growth. Comparing sources of future growth in Sudan’s agrifood system across ten different agrifood value chains shows that fruits, root crops, and cereals rank highest in their potential to contribute to a range of development outcomes, including reductions in poverty, improvement in diet quality, job creation, and growth in national GDP. Although the livestock ranks lower per unit of growth, it is distinct from the higher-ranked value chains in that it has a sizable impact on all four development outcomes, while as a large and established sector in Sudan even small gains in productivity can have significant impacts in absolute terms.

This report synthesizes the key discussions and outcomes of the “Navigating Sudan’s Conflict: Research Insights and Policy Implications” conference, held on March 5, 2024, in Nairobi, Kenya. Convening a diverse group of experts in research, development, and humanitarian efforts, the conference aimed to explore actionable solutions for the socioeconomic challenges triggered by Sudan’s ongoing conflict. Participants at the conference delved into the conflict’s adverse impacts on agriculture, markets, employment, and food security, as well as its wider regional impacts. Notably, the conference findings underscore the urgent need for supporting smallholder farmers, stabilizing markets, generating employment opportunities, and enhancing agricultural productivity within a comprehensive recovery strategy. Furthermore, conference participants stressed the importance of innovative data gathering, collaborative policy formulation, international support, and coordination to ensure effective interventions. This report succinctly presents the interventions discussed in the conference’s research and panel discussion sessions, particularly the pivotal insights offered in each to guide policy that will build peace, strengthen resilience, and relaunch and accelerate human and economic development efforts in Sudan.

Analysis of a comprehensive survey of Sudanese rural households conducted from November 2023 to January 2024 by IFPRI and UNDP reveals significant socioeconomic impacts of the ongoing armed conflict on the Sudanese population, underscoring the need for immediate and targeted policy and programmatic interventions. The conflict has severely disrupted rural household incomes and exacerbated existing vulnerabilities related to their housing and access to infrastructure and services. Most households live in inadequate housing conditions, with disparities in access to water, electricity, and sanitation services posing additional challenges. Rural households’ low access to assets, including agricultural land, further complicates their livelihoods. The conflict, primarily concentrated in urban areas, particularly Khartoum, has triggered mass migration, with significant numbers relocating to states like Aj Jazirah and Gedaref. These migrants, often from relatively better-off backgrounds, face substantial income losses, necessitating basic needs support and enhanced provision of public services, particularly for the large families that are more likely to migrate. Agriculture, a critical sector for rural livelihoods, has been significantly affected across all states. Most households reported not cultivating land during the summer season of 2023 due to the conflict. The sharp reduction in the area of crops planted underscores the need for support for farming activities, particularly for smallholder households. The survey highlights extensive exposure to shocks among rural households, with personal shocks, such as illnesses among household members, being the most common. Natural and climatic shocks, although less prevalent, alongside conflict-related shocks, like theft and violence, emphasize the complex challenges faced by these communities. Market access and disruptions have further impacted rural households, with a considerable proportion of rural households unable to sell or buy goods, primarily due to high prices and sharp reductions in income for most households. These market challenges, coupled with the overall economic instability, necessitate interventions aimed at maintaining and improving market accessibility and functionality to promote recovery and resilience. The findings from the analysis of the survey data lend support to designing and implementing comprehensive strategies that address the immediate needs of displaced populations and other rural households affected by income losses and market disruptions. Enhancing public services, supporting livelihoods, building resilience through shock-responsive social protection systems, agricultural and economic interventions, and ensuring equitable access to resources and markets for all households, particularly those headed by women and vulnerable groups, are the principal policy recommendations that emerged from this analysis. This study of rural household livelihoods amid the armed conflict in Sudan provides a foundation for targeted interventions and policy reforms aimed at mitigating the conflict’s impacts and fostering long-term resilience and economic stability.

This study addresses the impact of the ongoing conflict in Sudan on smallholder farmers' intentions and challenges during the 2023 summer agricultural season. A nationally representative survey of 3,284 smallholder farmers was conducted. Due to the security hazards and connectivity challenges, we used a combination of three interview types, Interactive Voice Recording (IVR), Computer-Assisted-Tele phone-Interviews (CATI) and face-to-face (in-person) interviews. Key findings are that close to a third of the farmers were displaced from their farms’ locations and 40 percent were unable to prepare for planting season because of the conflict. Most of the farmers who did not prepare for the summer season at the time of the interview were not intending to plant later in the season. The key challenges that pre vented them from planting were the lack of finance to buy agricultural inputs (such as seeds and fertilizers) and/or to hire farm labor. This is compounded by bad weather conditions, poor quality of the local seed varieties, higher cost of improved seeds, and delayed rains (climate challenges). In addition, the ongoing conflict has had direct and indirect impacts that prevented many farmers from planting this season. It disrupted market functionality and reduced the availability of and/or raised the cost of agricultural inputs and farm labor. The lack of finances has also seen farmers reduce the size of the area they planted this season compared to last year’s season. The compounding challenges of these reduced production are expected to be felt as soon as the harvest season begins. The implications suggest the need for rapid intervention to support farmers during the harvest and winter seasons to mitigate the impact of the conflict on agricultural activities.

The world agri-food system is getting increasingly 'globalized'. As the majority moves into cities, and those who remain in rural areas adopt urbanized lifestyles the consumption of food is changing toward varied yet similar consumption around the world. This book reflects on how these changes are affecting the poor by looking at specific factors that are driving change. The chapters consider different angles to the following questions: How do these changes affect the roles and powers of various actors along the food chain? How relevant are these trends to the economic developments within the global agri-food system, and in particular to the poor segments of society? How is the globalization of foods affecting human health? How can international and national policy address possible adverse direct and indirect effects of globalization of the world's agri-food system while strengthening positive ones? The book attempts to combine both lines of inquiry, focusing more specifically on the globalization of agri-food systems, the actual and potential impacts of these trends on the poor, and the implications for food and nutrition security in developing countries.

Understanding how the Papua New Guinea (PNG) agricultural economy and associated household consumption is affected by climate, market and other shocks requires attention to linkages and substitution effects across various products and the markets in which they are traded. In this study, we use a multi-market simulation model of the PNG food economy that explicitly includes production, consumption, external trade and prices of key agricultural commodities to quantify the likely impacts of a set of potential shocks on household welfare and food security in PNG. In this study, we use a multi-market simulation model of the PNG food economy that explicitly includes production, consumption, external trade and prices of key agricultural commodities to quantify the likely impacts of a set of potential shocks on household welfare and food security in PNG. We have built the model to be flexible in order to explore different potential scenarios and then identify where and how households are most affected by an unexpected shock. The model is designed using region and country-level data sources that inform the structure of the PNG food economy, allowing for a data-driven evaluation of potential impacts on agricultural production, food prices, and food consumption. Thus, as PNG confronts different unexpected challenges within its agricultural economy, the model presented in this paper can be adapted to evaluate the potential impact and necessary response by geographic region of an unexpected economic shock on the food economy of the country. We present ten simulations modeling the effects of various shocks on PNG’s economy. The first group of scenarios consider the effects of shocks to production of specific agricultural commodities including: 1) a decrease on maize and sorghum output due to Fall Armyworm; 2) reduction in pig production due to a potential outbreak of African Swine Fever; 3) decline in sweet potato production similar to the 2015/16 El Niño Southern Oscillation (ENSO) climate shock; and 4) a decline in poultry production due to COVID-19 restrictions on domestic mobility and trade. A synopsis of this report, which focuses on the COVID-19 related shocks on the PNG economy is also available online (Diao et al., 2020).1 The second group of simulations focus on COVID-19-related changes in international prices, increased marketing costs in international and domestic trade, and reductions in urban incomes. We simulate a 1) 30 percent increase in the price of imported rice, 2) a 30 percent decrease in world prices for major PNG agricultural exports, 3) higher trade transaction costs due to restrictions on the movement of people (traders) and goods given social distancing measures of COVID-19, and 4) potential economic recession causing urban household income to fall by 10 percent. Finally, the last simulation considers the combined effect of all COVID-19 related shocks combining the above scenarios into a single simulation. A key result of the analysis is that urban households, especially the urban poor, are particularly vulnerable to shocks related to the Covid-19 pandemic. Lower economic activity in urban areas (assumed to reduce urban non-agricultural incomes by 10 percent), increases in marketing costs due to domestic trade disruptions, and 30 percent higher imported rice prices combine to lower urban incomes by almost 15 percent for both poor and non-poor urban households. Urban poor households, however, suffer the largest drop in calorie consumption - 19.8 percent, compared to a 15.8 percent decline for urban non-poor households. Rural households are much less affected by the Covid-19 related shocks modeled in these simulations. Rural household incomes, affected mainly by reduced urban demand and market disruptions, fall by only about four percent. Nonetheless, calorie consumption for the rural poor and non-poor falls by 5.5 and 4.2 percent, respectively.

The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme aims to provide income support to farmers to facilitate timely access to inputs by easing their liquidity needs. This study, based on 1,406 farmers of Uttar Pradesh and using a binary choice model, examines the scheme’s targeting accuracy and the correlates of farmers’ spending patterns. Triple difference with matching estimators are used to identify the differential impact of PM-KISAN on Krishi Vigyan Kendras (farm science centers, or KVKs) beneficiaries. Results show that PM-KISAN reached to one-third of all the farmers in the first three months of its implementation. Moreover, the study finds no selection bias based on social, economic and agricultural characteristics. The scheme has significantly helped those who are relatively more dependent on agriculture and have poor access to credit. Moreover, scheme has significantly stimulated the KVK ’s impact on the adoption of modern cultivars.