Policy Implications

The findings of this study have policy implications in terms of the design and im-plementation of mitigating measures against food price changes and agricultural policies in general. To begin, the results show that the effects of higher food prices go beyond its immediate impact on expenditure and by extension poverty level.

The thesis has demonstrated that households, in addition to other things, may

increase the supply of child labour because of higher food prices. The results of Chapter 2, therefore, is supported by other empirical findings that income from child labour constitutes a significant proportion of household income, especially in times of adverse economic shocks. The bigger question, therefore, is whether a total ban on child labour will enhance or further diminish the welfare of house-holds in such times. In situations like this different policy options are available, and each choice must be weighed vis-a-viz the pro and cons. For some of these children and their families, a total ban on child labor will significantly reduce household income such that these children may have to drop out of school. In this case, policymakers must devise instruments that will optimise children’s education without necessarily putting a total ban on child labour.

The first policy option is based on the luxury axiom of Basu and Van (1998). Policy makers could give subsidies and tax rebates that ensure that food prices are within the reach of the poor and the vulnerable. This will ensure that the higher food prices do not cause household consumption to fall below the level of subsistence. However, apart from the high cost to the already constrained gov-ernment budget, such a policy may not be very effective, and may not provide a lasting solution. Indeed, some countries in SSA adopted variants of this option with varying degrees of success. However, assessments of their effectiveness in protecting poor households against food price hikes has shown that such an ap-proach has been less effective. The ineffectiveness is attributed to the fact that such subsidies did not target the right households and food items (World Bank, 2012). Thus, given the findings of Chapter 2, Bibi et al.(2010) and Hou (2015), one can conclude that this approach may not be an effective option in combating the child-labour effects of increased food prices. Targeted food subsidies could even worsen child labour among poor households because of the price distortions that may be associated with it. Such subsidies usually affect imported cereals to the disadvantage of locally produced staples, hence the demand for the products of small-scale farmers may even fall due to the subsidies.

The foregoing means that some factors must be considered if subsidies to curb the effect of food prices on child labour are to be effective. It is important that policy markers pay attention to the heterogeneous effects of the problem.

The analysis shows that landless-agricultural households, and poor households, in general, are more likely to suffer the child-labour consequences of a food price surge. As a result, food subsidies should target food items that constitute the average basket of poor households. This would ensure that households who benefit from the policy are those who really need it. Even with this, governments should ensure that the relative prices of domestically produced goods do not increase excessively since this may re-enforce the child-labour effect of higher food prices.

Another popular policy option entail providing subsidized inputs to farmers as a lasting solution to curb the re-occurring food price shocks and low produc-tion (Abbott & de Battisti, 2011). The effect of this on child labour was studied in Chapter 3. The chapter argued that if the market for agricultural labour is underdeveloped or does not exist in most SSA countries, the provision of subsi-dized input to poor farmers may be a potential source of increased child labour.

This assertion is shown by the results of the empirical analysis. The fact that even relatively richer farmers (those who cultivate more than 2 acres of land) tend to engage in child labour when they receive inputs shows that unless labour saving inputs are also provided, the mere provision of labour-augmenting inputs like fertilizer and improved seeds could worsen the child labour situation among small-scale farmers. To reduce the child-labour effects of the input subsidies, two policy directives are deduced from the findings of Chapter 3. First, the gov-ernment could ban the use of child labour among beneficiary farmers. However, this option is likely to fail since the evidence shows that such laws and regula-tions have largely failed to eliminate child labour. In this case, regulation may be difficult to endorse because of the agency problem. It will be difficult to expect adult household members/parents who demand the services of the children on farms to respect this directive in the absence of an external monitor/supervisor.

Aside, this policy option raises the debated question of whether a total ban on child labour will enhance or diminish the welfare of these households. From all indications, farm households may suffer significant welfare losses if there were a total ban on child labour.

However, I tend to favour a second alternative which can present a situation where everyone benefits, the household achieves sustainable livelihood without negatively affecting the child’s human development. This is to condition subsidies, cash transfers and input, on desirable outcomes like school enrolment, and if possible, the academic performance of the children. The added-advantage of this alternative is that such outcomes are easily verifiable at a minimal extra cost to the subsidy program. Prospective beneficiaries could be asked to present the report cards of their wards as a condition precedent to subsequent benefits. This could also solve the agency problem since the schooling outcomes of the child become part of the immediate needs of the households. Parents may, therefore, make efforts to ensure that the type of tasks allocated to children are age appropriate and do not interfere with the educational progress of the child.