POLITICA ECONOMICA AGRARIA EUROPEA E INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT CH 4

1
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR
DEVELOPMENT CH 4

• Realizing gains from trade, price and subsidy
  policy reforms
• as per capita income rises, agricultural trade
  policies vary across countries
• low-income - high taxes on farmers in the export
  sector
• high income - heavy subsidies to farmers
• policy bias against the poor in
• domestic markets
• international markets
• perverse redistribution of income from the poor
  to the rich
• within countries
• between countries

2
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR
DEVELOPMENT CH 4

• Realizing gains from trade, price and subsidy
  policy reforms
• Current trade policies
• have high economic and social costs
• depress international commodity prices ( 5 on
  average, much more for some commodities)
• suppress agricultural output growth in developing
  countries
• consume a large share of the government budget
• and distract from growth-enhancing investments
• Correcting policy failures can
• accelerate growth
• reduce poverty

3
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR
DEVELOPMENT CH 4

• Realizing gains from trade, price and subsidy
  policy reforms
• Uruguay Round (1980s)
• Developed countries
• domestic efforts to remove subsidy policies
  inducing additional production and depressing
  world prices
• international efforts in the 1980s to reduce
  distorted prices in world markets.
• Cairns Group (some Agricultural exporting
  countries) ensured putting agricultural trade and
  subsidy reform high on the Uruguay Round agenda
• Doha Round (2000s)
• Cancun Conference (2003) G-20 Group (Developing
  countries) to secure reductions in
  developed-country protection.

4
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR
DEVELOPMENT CH 4

• Realizing gains from trade, price and subsidy
  policy reforms
• Slow progress in OECD Member countries reforming
  their agricultural policies
• Producer support estimate (PSE)
• measures the annual monetary value of gross
  transfers from consumers and taxpayers to support
  agricultural producers
• arises from policy measures that support
  agriculture, regardless of their nature,
  objectives, or impacts on farm production or
  income
• In two decades (from 1986-88 to 2003-2005)
• (PSE) down from 37 to 30 ( of gross value of
  farm receipts)
• Yearly amount of support up from 242 billion to
  273 billion.
• More than 90 percent of the dollar value of
  agricultural support in OECD countries is
  provided by
• EU (about half)
• Japan
• United States
• Korea
• In contrast Australia and New Zealand provide
  little support to their farmers

5
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR
DEVELOPMENT CH 4

• Realizing gains from trade, price and subsidy
  policy reforms
• Slow progress in OECD Member countries reforming
  their agricultural policies
• EU provide
• preferential market access to countries in
  Sub-Saharan Africa, the Caribbean, and the
  Pacific under the Cotonou Agreement.
• duty-free and quota-free access to its markets to
  UN-designated Least Developed Countries for
  Everything But Arms
• decoupling to reduce trade-distorting effects
  while maintaining support to farmers.
• more than 40 percent of the PSE is now decoupled
  from production, up from about 20 percent in
  198688

6
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR
DEVELOPMENT CH 4

• Realizing gains from trade, price and subsidy
  policy reforms
• Decoupled payments are less distorting than
  output-linked forms of support such as tariff
  protection, but they can still influence
  production.
• They can reduce farmers aversion to risk (wealth
  effect) and reduce the variability in farm income
  (insurance effect).
• Banks often make loans to farmers that they would
  not make to other borrowers, keeping farmers in
  agriculture.
• Most programs of decoupled payments have no time
  limit, as in the EU and Turkey.
• The United States had a program with a time limit
  in the 1996 Farm Bill, but it was not enforced.
• Mexicos decoupled program initially had a time
  limit the program was supposed to expire when
  the North American Free Trade Agreement phase- in
  is completed in 2008, but the government has
  already announced that the program will be
  retained in some form.

7
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR
DEVELOPMENT CH 4

• Realizing gains from trade, price and subsidy
  policy reforms
• Unless these programs have time limits with
  credible government commitments to stick to them,
  decoupled payments risk becoming more distorting
  and costly than commonly assumed.
• In addition, continuing output-linked programs
  along side decoupled support can significantly
  dampen the less-distorting effects of decoupled
  programs.
• Progress on decoupling has varied significantly
  by commodity, with most progress on
  grainsalthough recent initiatives to expand the
  use of biofuels in OECD countries may indirectly
  reverse some of this progress.
• Needed now is a rapid shift to less-distorting
  decoupled support for export products important
  to developing countries, particularly cotton.
• There have been some recent changes to rice,
  sugar, and cotton policies in Japan, the EU, and
  the United States, respectively, all at an early
  stage of implementation.

8
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Political economy factors matter for further
  reform
• Political economy factors in each country have
  determined the pace and extent of reforms.
• U.S. cotton policies, EU sugar policies, and
  Japan rice policies indicate that the impact of
  the World Trade Organization (WTO) in inducing
  reform is real and that media pressure can
  complement it .
• The cases show that reforms are not easy and
  often require bargained compromises and
  compensation schemes for the losers to get
  agreement on further reducing high levels of
  agricultural protection (as in the Japanese rice
  policy reforms and the EU sugar policy reforms).
  

9
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Agricultural taxation in developing countries
• Policies in developing countries have also
  blunted the incentives for agricultural
  producers.
• Macroeconomic policies historically taxed
  agriculture more than agricultural policies did,
  but both were important in poorer countries.
• The indirect tax on agriculture, through
  overvalued currencies and industrial protection,
  was nearly three times the direct tax on the
  sector at the time of the last World Development
  Report on agriculture (1982).
• In a study that included 16 of todays developing
  countries from the 1960s to mid-1980s, average
  direct taxation was estimated at 12 percent of
  agricultural producer prices and indirect taxes
  at 24 percent.
• High taxation of agriculture was associated with
  low growth in agricultureand slower growth in
  the economy.
• The poorest developing countries taxed
  agriculture the most, and reinvestments of tax
  revenues in agriculture were low and inefficient

10
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Agricultural taxation in developing countries
• With reforms in the 1980s and 1990s to restore
  macroeconomic balance, improve resource
  allocation, and regain growth in many of the
  poorest countries, both direct and indirect taxes
  were reduced.
• The reduced overvaluation of currencies, which
  taxed agricultural exports (usually exported at
  the official rate) and subsidized food imports,
  is reflected in the huge reduction in the
  parallel market premiums for foreign currency in
  developing countries.
• For 59 developing countries, the trade-weighted
  average premium fell from more than 140 percent
  in the 1960s to approximately 80 percent in the
  1970s and 1980s and to just 9 percent in the
  early 1990s, with wide variation across
  countries.

11
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Agricultural taxation in developing countries
• Agriculture-based countries are taxing
  agriculture less
• Reforms in agriculture-based countries,
  particularly in Sub-Saharan Africa, more than
  halved the average net taxation of agriculture
  from 28 percent to 10 percent between 198084 and
  200004).
• The approach used to measure the change in net
  taxation in developing countries is through
  calculation of a nominal rate of assistance to
  farmers
• Nine of 11 countries in a recent study had lower
  net taxation in the second period
• Only Nigeria and Zambia had higher net taxation
  between the two periods, with the highest net
  taxationin 200004 in Côte dIvoire (about a -40
  percent nominal rate of assistance).

12
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Agricultural taxation in developing countries
• Agriculture-based countries are taxing
  agriculture less
• Despite macroeconomic adjustment, real domestic
  prices for agricultural exports across these
  countries did not change much on average over the
  1980s as the macroeconomic improvements barely
  offset the declines in world commodity prices.
• The situation changed over the 1990smore
  favorable world commodity prices, continued
  macroeconomic reforms, and agricultural sector
  reforms led to larger increases in real domestic
  prices of agricultural exports.7
• The stronger price incentives explain part of the
  higher agricultural growth in many of the
  agriculture-based countries over the 1990s
  (chapter 1).

13
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Agricultural taxation in developing countries
• Agriculture-based countries are taxing
  agriculture less
• The aggregate nominal rates of assistance mask
  significant differences in taxation and
  protection between agricultural imports and
  exports and among products.
• An average nominal rate of assistance close to
  zero at the country level simply indicates no net
  taxation, but it could be the result of large
  import tariffs offsetting large export taxes.
• On average between 198084 and 200004,
  agriculture-based countries slightly lowered
  protection of agricultural importables, from a 14
  percent tariff equivalent to 11 percent, but
  there has been a significant reduction in
  taxation of exportables, from 46 percent to 20
  percent (
• Most of the decline in taxation is the result of
  improved macroeconomic policies.

14
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Transforming and urbanized countries are
  protecting agriculture more
• Net taxation in transforming countries declined
  on average from 11 percent to 2 percent, but with
  significant variations across countries (simple
  average across countries included in figure 4.4).
  Some countries shifted to protect the sector
  more (Indonesia, India, Malaysia, and Thailand),
  while others continued to tax it, although at
  lower levels than in the 1980s (as in Egypt and
  Senegal) (figure 4.4). Zimbabwe is the only
  country of this group that had a higher net tax
  on the sector, mainly because of a highly
  overvalued currency. There has also been a
  significant shift in the relative rate of
  assistance to agriculture versus nonagriculture,
  with a remaining challenge to keep sectoral
  biases low
• There are also differences across agricultural
  imports and exports. On average between 198084
  and 200004, transforming countries increased
  protection of agricultural importables from an 11
  percent tariff equivalent to 14 percent, and
  reduced the taxation of exportables from 23
  percent to 13 percent (figure 4.3).

15
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Transforming and urbanized countries are
  protecting agriculture more
• As developing countries become richer, they
  generally protect agriculture more. Both China
  and India have reduced their antiagricultural
  bias substantially over the past three decades,
  not only directly but also indirectly via cuts to
  manufacturing protection (figures below). When
  compared with the more-advanced economies of
  Northeast Asia when they had similar per capita
  incomes, the trends are strikingly similar.
  China has reduced its antiagricultural bias at a
  later stage of economic development than India,
  but the assistance to agriculture relative to
  nonagriculture (measured by a relative rate of
  assistance RRA index) has been trending upward
  in both countries. China bound its agricultural
  tariffs at relatively low levels when it joined
  the WTO in 2001. The challenge now is to keep
  sectoral biases low and not follow the trend to
  heavily protect agriculture that other countries
  followed when they were at similar levels of
  development.
• In urbanized countries, the average net taxation
  shifted from marginally negative in 198084 to a
  net protection rate of 10 percent in 200004
  (simple average across countries included in
  figure 4.5). The net taxation estimate for Latin
  American countries, particularly in the earlier
  period, may underestimate actual taxation as
  currency overvaluations were not included in the
  estimates.8 (The official exchange rate was used
  for both time periods.) Six of eight countries
  analyzed (Chile, Colombia, Ecuador, Mexico, the
  Philippines, and the Dominican Republic) had
  higher protection in 200004 than in 198084
  (figure 4.5). Rice and sugar are the
  most-highly-protected products in the urbanized
  countries (table 4.1). Between 198084 and
  200004, urbanized countries slightly lowered
  their level of protection of agricultural
  importables from an average tariff equivalent of
  24 percent to 22 percent, and shifted from a tax
  on exportables of 19 percent to a subsidy
  equivalent of 4 percent (figure 4.3).

16
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Transforming and urbanized countries are
  protecting agriculture more
• Urbanized countries in Eastern and Central Europe
  have on average increased agricultural
  protection.9 (Comparative statistics are not
  included in the figures here because the earliest
  data available are from 1992.)
• Net protection has on average increased from 4
  percent in 1992/93 to 31 percent in 2002/03
  (simple average across countries).10 There are
  large differences across countries.
• For example, Latvia, Lithuania, and Estonia
  imposed about a 30 percent tax equivalent on the
  sector in 1992/93, while Slovenia protected the
  sector.
• Between 1992/93 and 2002/03, protection on
  agricultural imports increased on average from a
  13 percent to a 38 percent tariff equivalent.
• Exports were taxed at 2 percent on average in
  1992/93, but in 2002/03 they were protected with
  an average tariff equivalent of 24 percent.
• The increase in protection is in part a result of
  EU accession by many of these countries over the
  period analyzed, resulting in a shift to the
  higher protection levels of the EU.
• Riprendere a pag 14 del testo Space still
  remains..

17
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Leading sector in agriculture - based countries
• Growth in agriculture induces growth in other
  sectors (multiplier)
• Many success stories of agriculture as the basis
  for growth
• industrial revolutions from England in the
  mid-18th century to Japan in the late-19th
  century
• more recently in China, India, Vietnam..
• Also numerous failures to use agriculture for
  development.

18
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Underused sector in agriculture - based countries
• Distress due to rapid population growth,
  declining farm size, falling soil fertility, and
  missed opportunities for income diversification
  and migration
• political economy in which urban interests have
  the upper hand (excessively taxing,
  under-investing in agriculture)
• agriculture-based countries have very low public
  spending in agriculture as a share of their
  agricultural GDP (4 in 2004 compared with 10
  in 1980 in transforming countries)
• The pressures of recurrent food crises also tilt
  public budgets and donor priorities toward direct
  provision of food rather than investments in
  growth and achieving food security through rising
  incomes.
• Where women are the majority of smallholder
  farmers, failure to release their full potential
  in agriculture is a contributing factor to low
  growth and food insecurity.

19
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Underused sector also in transforming countries
• lagging labor reallocation out of agriculture
• widening the rural-urban income gap
• farm population demanding subsidies and
  protection.
• policy dilemma due to weak fiscal capacity to
  sustain transfers to reduce the income gap and
  urban demands for low food prices create a policy
  dilemma.
• opportunity cost of subsidies (three times public
  investments in agriculture in India) is reduced
  public goods for growth and social services in
  rural areas.

20
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• New opportunities
• Dynamic new product markets
• Leading role of private entrepreneurs including
  smallholders supported by their organizations
• extensive value chains linking producers to
  consumers
• staple crops and traditional export commodities
  find new markets
• Regional market integration
• New uses ( bio-fuels )
• far-reaching technological and institutional
  innovations
• new roles for the state, the private sector, and
  civil society

21
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• New roles
• Production is mainly by smallholders, who often
  remain the most efficient producers, in
  particular when supported by their organizations.
  
• But when these organizations cannot capture
  economies of scale in production and marketing,
  labor-intensive commercial farming can be a
  better form of production and
• Efficient and fair labor markets are the key
  instrument to reducing rural poverty.
• The private sector drives the organization of
  value chains that bring the market to
  smallholders and commercial farms.
• The state - through enhanced capacity and new
  forms of governance -
• corrects market failures, regulates competition,
  and
• engages strategically in public-private
  partnerships to
• promote competitiveness in the agribusiness
  sector and
• support the greater inclusion of smallholders and
  rural workers.

22
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• New tools - Increase access to assets
• household assets are major determinants of
• ability to participate in agricultural markets
• secure livelihoods in subsistence farming,
• compete as entrepreneurs in the rural non-farm
  economy,
• find employment in skilled occupations.
• Three core assets are land, water, and human
  capital. The assets of the rural poor squeezed by
• population growth,
• environmental degradation,
• expropriation by dominant interests, and
• social biases in policies and in the allocation
  of public goods.
• Nowhere is the lack of assets greater than in
  Sub-Saharan Africa, where
• farm sizes in many of the more densely populated
  areas are unsustainably small and falling,
• land is severely degraded,
• investment in irrigation is negligible, and
• poor health and education limit productivity and
  access to better options.

23
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• New tools - Increase access to assets
• Population pressure together with declining farm
  size and water scarcity are also major challenges
  in many parts of Asia.
• In many cases enhancing assets requires
  significant public investments in
• irrigation
• health
• education
• In others cases, it is more a matter of
  institutional development, such as
• enhancing the security of property rights
• Improving the quality of land administration
• Increasing assets may also call for affirmative
  action to equalize chances for disadvantaged or
  excluded groups, such as women and ethnic
  minorities.

24
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• New tools - Access to land
• Land markets, particularly rental markets, can
  raise productivity, help households diversify
  their incomes, and facilitate exit from
  agriculture.
• As farmers age, as rural economies diversify, and
  as migration accelerates, well-functioning land
  markets are needed to
• transfer land to the most productive users
• facilitate participation in the rural non farm
  sector
• Facilitate migration out of agriculture.
• Poor performance of land market due to
• Insecure property rights
• poor contract enforcement
• stringent legal restrictions
• Poor performance of land markets leads to
• large inefficiencies
• further inequalities
• Land reform to
• promote smallholder entry into the market,
• reduce inequalities in land distribution,
• increase efficiency
• Redistributing underutilized large estates to
  settle smallholders can work if complemented by
  reforms to secure the competitiveness of
  beneficiaries

25
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• New tools - Access to water
• Access to water and irrigation is a major
  determinant of land productivity and the
  stability of yields.
• Irrigated land productivity is more than double
  that of rain-fed land.
• In Sub-Saharan Africa, only 4 of the area in
  production is under irrigation, compared with 39
  percent in South Asia and 29 percent in East
  Asia.
• With climate change leading to rising
  uncertainties in rain-fed agriculture and reduced
  glacial runoff, investment in water storage will
  be increasingly critical.
• Even with growing water scarcity and rising costs
  of large-scale irrigation schemes, there are many
  opportunities to enhance productivity by
  revamping existing schemes and expanding
  small-scale schemes and water harvesting.

26
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• New tools - Access to education
• education is often the most valuable asset for
  rural people to pursue opportunities in the new
  agriculture, obtain skilled jobs, start
  businesses in the rural non - farm economy, and
  migrate successfully.
• education levels in rural areas tend to be
  dismally low worldwide an average of four years
  for rural adult males and less than three years
  for rural adult females in Sub- Saharan Africa,
  South Asia, and the Middle East and North Africa.
  
• Improving basic rural education has been slower
  than in urban areas. Where demand for education
  is lagging among rural households, it can be
  enhanced through cash transfers (as in
  Bangladesh, Brazil, and Mexico) conditional on
  school attendance.
• However, it is the quality of rural education
  that most needs improvement, with education
  conceived broadly to include vocational training
  that can provide technical and business skills
  that are useful in the new agriculture and the
  rural nonfarm economy.

27
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• New tools - Access to health services
• Widespread illness and death from HIV/AIDS and
  malaria can greatly reduce agricultural
  productivity and devastate livelihoods.
• The majority of people affected by HIV work in
  farming, and there is tremendous scope for
  agricultural policy to be more HIV-responsive in
  supporting adjustments to labor shocks and the
  transmission of knowledge to orphans.
• Agriculture also poses threats to the health of
  the rural poor.
• Irrigation can increase the incidence of malaria,
  and pesticide poisoning is estimated to cause
  355,000 deaths annually.
• Zoonotic diseases such as avian influenza that
  arise from the proximity of humans and animals
  pose growing threats to human health.
• Better coordination of the agriculture and
  health agendas can yield big dividends for
  productivity and welfare.

28
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Make smallholder farming more productive and
  sustainable
• Improving the productivity, profitability, and
  sustainability of smallholder farming is the main
  pathway out of poverty
• A broad array of policy instruments, many of
  which apply differently to commercial
  smallholders and to those in subsistence farming,
  can be used to achieve the following
• Improve price incentives and increase the quality
  and quantity of public investment
• Make markets work better
• Improve access to financial services and reduce
  exposure to uninsured risks
• Enhance the performance of producer organizations
• Promote innovation through science and technology
  
• Make agriculture more sustainable and a provider
  of environmental services

29
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Moving beyond farming a dynamic rural economy
  and skills to participate in it
• a dynamic rural economy and skills to participate
  in it
• In Asia and Latin America between 45 and 60
  percent of the rural labor force is engaged in
  the agricultural labor market and the rural
  nonfarm economy.
• Only in Sub-Saharan Africa is self- employment in
  agriculture still by far the dominant activity
  for the rural labor force, especially for women.
  
• The rural labor market offers employment
  possibilities for the rural population in the new
  agriculture and the rural non farm sector.
• Opportunities are better for those with skills,
  and women with lower education levels are at a
  disadvantage.
• Migration can be a climb up the income ladder for
  well-prepared, skilled workers, or it can be a
  simple displacement of poverty to the urban
  environment for others.

30
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Moving beyond farming a dynamic rural economy
  and skills to participate in it
• policy priority to create more jobs in both
  agriculture and the rural non - farm economy.
• Basic ingredients of a dynamic rural non - farm
  economy are
• a rapidly growing agriculture
• a good investment climate.
• Linking the local economy to broader markets by
• reducing transaction costs
• investing in infrastructure
• providing business services
• Agro-based clusters - firms in a geographic area
  coordinating to compete in servicing dynamic
  markets
• The real challenge is to help the transition of
  the rural population into higher-paying jobs.
• Labor regulations are needed that help
  incorporate a larger share of rural workers into
  the formal market and eliminate discrimination
  between men and women.

31
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• Moving beyond farming a dynamic rural economy
  and skills to participate in it
• Education. skills and entrepreneurship fostered
  by
• providing incentives for parents to better
  educate their children,
• improving the quality of schools
• providing educational opportunities relevant to
  emerging job markets.
• Social assistance to the poor can increase both
  efficiency and welfare.
• Efficiency gains from reducing risk management
  and risk of asset de - capitalization in response
  to shocks.
• Welfare gains come from supporting the chronic
  poor with food aid or cash transfers.
• These policies have been shown to have important
  spillover effects on the health and education of
  the pensioners grandchildren.
• Safety nets, such as guaranteed workfare programs
  and food aid or cash transfers, also have an
  insurance function in protecting the most
  vulnerable against shocks.

32
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• How can Agriculture for development agendas best
  be implemented?
• Rural households pursue portfolios of farm and
  non - farm activities that allow them to
  capitalize on the different skills of individual
  members and to diversify risks.
• Pathways out of poverty can be through
  smallholder farming, wage employment in
  agriculture, wage or self-employment in the rural
  non - farm economy, and migration out of rural
  areas?or some combination thereof.
• Gender differences in access to assets and
  mobility constraints are important determinants
  of available pathways.
• Making agriculture more effective in supporting
  sustainable growth and reducing poverty starts
  with
• a favorable sociopolitical climate
• adequate governance
• sound macro fundamentals.

33
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• How can Agriculture for development agendas best
  be implemented?
• Making agriculture more effective in supporting
  sustainable growth and reducing poverty requires
  defining an agenda for each country type, based
  on a combination of four policy objectives -
  forming a policy diamond
• Objective 1. Increase access to markets and
  promote efficient value chains ?
• Objective 2. Enhance smallholder competitiveness
  and facilitate market entry ?
• Objective 3. Improve livelihoods in subsistence
  farming and low-skill rural occupations ?
• Objective 4. Increase employment in agriculture
  and the rural non - farm economy, and enhance
  skills

34
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• How can Agriculture for development agendas best
  be implemented?
• Development agendas must have
• established preconditions (too often missing)
• social peace,
• adequate governance, and
• sound macro fundamentals
• Development agendas must be
• comprehensive combining objectives according to
  country context, based on indicators that help in
  defining, monitoring, and evaluating progress
  toward each policy objective.
• differentiated by country type, reflecting
  differences in priorities and structural
  conditions across the three agricultural worlds.
• sustainable must be environmentally sustainable
  both to reduce the environmental footprint of
  agriculture as well as to sustain future
  agricultural growth.
• feasible meeting conditions of political
  feasibility, administrative capacity, and
  financial affordability.

35
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• How can Agriculture for development agendas best
  be implemented?
• In agriculture - based countries achieving
  growth and food security
• Sub-Saharan countries account for 82 of the
  rural population in the agriculture- based
  countries.
• For them, with both limited tradability of food
  and comparative advantage in primary sub sectors,
  agricultural productivity gains must be the basis
  for national economic growth and the instrument
  for mass poverty reduction and food security.
• As macroeconomic conditions improved in
  Sub-Saharan Africa starting in the mid-1980s
  agricultural growth accelerated from 2.3 percent
  per year in the 1980s to 3.8 percent between 2001
  and 2005.

36
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• How can Agriculture for development agendas best
  be implemented?
• In agriculture - based countries achieving
  growth and food security
• Rural poverty started to decline where growth
  occurred, but rapid population growth is
  absorbing much of the gain, reducing per capita
  agricultural growth to 1.5 .
• Faster growth and poverty reduction are now
  achievable, but they will require commitments,
  skills, and resources.
• Diverse local conditions in Sub-Saharan Africa
  produce a wide range of farming systems and
  reliance on many types of food staples, implying
  a path to productivity growth that differs
  considerably from that in Asia.
• Although diversity complicates the development of
  new technologies, it offers a broad range of
  opportunities for innovation.

37
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• How can Agriculture for development agendas best
  be implemented?
• In agriculture - based countries achieving
  growth and food security
• Getting agriculture moving requires
• improving access to markets and developing modern
  market chains.
• a smallholder-based productivity revolution
  centered on food staples and on traditional and
  nontraditional exports.
• long- term investments in soil and water
  management.
• to enhance the resilience of farming systems,
  especially for people in subsistence farming in
  remote and risky environments.
• capitalizing on agricultural growth to activate
  the rural non farm economy in producing non
  tradable goods and services.

38
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• How can Agriculture for development agendas best
  be implemented?
• In agriculture - based countries achieving
  growth and food security
• In rain fed agriculture exploit the enormous
  untapped potential for storing water and using it
  more efficiently.
• In small and land locked countries regional
  integration to achieve economies of scale
• In Sub-Saharan Africa
• improve smallholder competitiveness in medium and
  higher potential areas, where returns on
  investment are highest,
• ensure livelihoods and food security of
  subsistence farmers.

39
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0708 AGRICULTURE FOR DEVELOPMENT

• How can Agriculture for development agendas best
  be implemented?
• In agriculture - based countries achieving
  growth and food security .
• The Sub-Saharan context implies four distinct
  features of an agriculture-for-development
  agenda.
• First, a multi sectoral approach must capture the
  synergies for technologies (seeds, fertilizer,
  livestock breeds), sustainable water and soil
  management, institutional services (extension,
  insurance, financial services), human capital
  development (education, health) all linked with
  market development.
• Second, agricultural development actions must be
  decentralized to tailor them to local conditions.
  These include community-driven approaches with
  women, who account for the majority of farmers in
  the region, playing a leading role.
• Third, the agendas must be coordinated across
  countries to provide an expanded market and
  achieve economies of scale in such services as
  RD.
• Fourth, the agendas must give priority to
  conservation of natural resources and adaptation
  to climate change to sustain growth.

40
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• How can Agriculture for development agendas best
  be implemented?
• In transforming countries reducing rural - urban
  income disparities and rural poverty
• In these countries, agriculture is almost
  exclusively in the hands of smallholders.
• Continuing demographic pressures imply rapidly
  declining farm sizes, becoming so minute that
  they can compromise survival if off-farm income
  opportunities are not available.
• Competition over access to water is acute, with
  rising urban demands and deteriorating quality
  from runoffs.
• As non farm incomes rise, pressures to address
  rural- urban income disparities through subsidies
  would compete for fiscal expenditures, at a high
  opportunity cost for public goods and rural basic
  needs.

41
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• How can Agriculture for development agendas best
  be implemented?
• In transforming countries reducing rural - urban
  income disparities and rural poverty
• On the other hand, addressing those disparities
  through import protection would elevate food
  costs for the large masses of poor consumers who
  are net food buyers.
• Because of demographic pressures and land
  constraints, the agenda for transforming
  countries must jointly mobilize all pathways out
  of poverty
• farming,
• employment in agriculture and the rural non farm
  economy,and migration.
• Prospects are good for promoting rural incomes
  and avoiding the subsidy-protection trap, if the
  political will can be mustered.
• Rapidly expanding markets for high-value
  products, especially horticulture, poultry, fish,
  and dairy?offer an opportunity to diversify
  farming systems and develop a competitive and
  labor-intensive smallholder sector.

42
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• How can Agriculture for development agendas best
  be implemented?
• In transforming countries reducing rural - urban
  income disparities and rural poverty
• Export markets for nontraditional products are
  also accessible because transforming countries
  have a comparative advantage in labor- and
  management-intensive activities.
• Many countries have high levels of poverty in
  less-favored regions that require better
  infrastructure and technologies adapted to these
  regions.
• To confront rural unemployment, a complementary
  policy objective is promoting a dynamic rural non
  farm sector in secondary towns, linked to both
  agriculture and the urban economy.
• China has brought industry to rural towns,
  diversifying rural incomes, an approach that
  could be emulated in other transforming
  countries.
• The momentous changes this restructuring implies
  must be insured by effective safety-net programs
  to allow households to assume risks in moving to
  their best options.

43
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• How can Agriculture for development agendas best
  be implemented?
• In urbanized countries linking smallholders to
  modern markets and providing good jobs
• The broad goal is to capitalize on rapid
  expansion of modern domestic food markets and
  booming agricultural sub sectors to sharply
  reduce the remaining rural poverty, still
  stubbornly high.
• The urbanized countries, with 32 million rural
  poor representing 45 of all their poor - are
  experiencing the supermarket revolution in food
  retailing.
• For smallholders, being competitive in supplying
  supermarkets is a major challenge that requires
  meeting demanding standards and achieving scale
  in delivery, for which effective producer
  organizations are essential.
• Rampant land inequality in Latin America also
  constrains smallholder participation.
• Beyond farming, territorial approaches are being
  pursued to promote local employment through
  interlinked farming and rural agro industry, and
  these experiences need to be better understood
  for wider application.

44
POLITICA ECONOMICA AGRARIA EUROPEA E
INTERNAZIONALE 0809 AGRICULTURE FOR DEVELOPMENT

• How can Agriculture for development agendas best
  be implemented?
• In urbanized countries linking smallholders to
  modern markets and providing good jobs
• For regions without such potential, the
  transition out of agriculture and the provision
  of environmental services offer better prospects.
  But support to the agricultural component of the
  livelihoods of subsistence farmers will remain an
  imperative for many years.
• Export markets for nontraditional products are
  also accessible because transforming countries
  have a comparative advantage in labor- and
  management-intensive activities.
• Many countries have high levels of poverty in
  less-favored regions that require better
  infrastructure and technologies adapted to these
  regions.
• To confront rural unemployment, a complementary
  policy objective is promoting a dynamic rural
  nonfarm sector in secondary towns, linked to both
  agriculture and the urban economy.
• China has brought industry to rural towns,
  diversifying rural incomes, an approach that
  could be emulated in other transforming
  countries.