Agriculture and Poverty Reduction Part of the Problem; Part of the Answer? - PowerPoint PPT Presentation

Loading...

PPT – Agriculture and Poverty Reduction Part of the Problem; Part of the Answer? PowerPoint presentation | free to download - id: 3f6fa8-NDRlN



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Agriculture and Poverty Reduction Part of the Problem; Part of the Answer?

Description:

Agriculture and Poverty Reduction Part of the Problem; Part of the Answer? Luc Christiaensen, World Bank, Presentation at George Washington University, Washington D.C ... – PowerPoint PPT presentation

Number of Views:113
Avg rating:3.0/5.0
Slides: 56
Provided by: dbe95
Learn more at: http://web.undp.org
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Agriculture and Poverty Reduction Part of the Problem; Part of the Answer?


1
Agriculture and Poverty ReductionPart of the
Problem Part of the Answer?
  • Luc Christiaensen, World Bank, Presentation at
    George Washington University, Washington D.C., 11
    February 2008

2
Agro-pessimism reigned during the 1990s
Development partner support for agriculture
declined consistently during the 1990s
poor in rural areas
ODA to Ag as of total ODA
of ODA to agriculture
of poor in rural areas
3
While poverty is concentrated in rural areas
POVERTY
Agriculture as main livelihood
4
public expenditures are concentrated outside
agriculture
OFFICIAL DEVELOPMENT ASSISTANCE (12 in 1990)
AGRICULTURE 4
POVERTY
96
AGRICULTURE 4
PUBLIC SPENDING (Sub-Saharan Africa)
96
Agriculture as main livelihood
5
Stunning contrasts- yields and poverty
Cereal yields up and poverty down in South Asia
cereal yields and poverty unchanged in
Sub-Saharan Africa
6
Agriculture for developmentin the headlines
7
Agriculture for developoment in the headlines
why?
  • End of cheap food which may affect growth
  • New demands on agriculture animal feed,
    biofuels, quality/health, environmental services
  • New supply uncertainties rising water and land
    constraints, high energy cost, climate change
  • Pandemics linked to agriculture
  • Rising rural-urban disparities especially in Asia

8
Agriculture for Development
  • www.worldbank.org/WDR2008

9
Overall messages
  • To meet the MDG of halving poverty by 2015,
    governments and donors must invest more and
    better in sustainable agriculture.
  • Successful implementation requires decentralized,
    participatory and multi-sectoral approaches
    redefining the relative roles of state, market,
    civil society.

10
Three functions of agriculture in development
  • A contributor to overall growth
  • A distributor of growth
  • A steward of the environment

11
The three worlds of agriculture
Agriculture based countries (mainly
SS-Africa. 417 million rural people)
Agricultures share in growth 1990-2005
Transforming countries (mainly Asia, MENA. 2.2
billion rural people)
Urbanized countries (mainly LAC, ECA. 255 million
rural people)
Rural poor/total poor, 2002
12
Agriculture, a source of environmental services
Important 80 of fresh water resources 21 of
greenhouse gas emissions
It can succeed Sustainable farming systems and
environmental services
13
Agriculture in agriculture based economies
14
No sustainable development in Africa without a
buoyant agriculture
  • Agriculture is the lead sector for overall growth
    and poverty reduction.
  • It can be done given new opportunities, and has
    started to happen
  • But it wont be easy (or cheap) given new
    challenges and the need for tackling both under
    and misinvestment.
  • The focus must be on brokering a smallholder
    productivity revolution.
  • Approach different to Asias Green Revolution
  • highly diverse conditions and rainfed farming

15
Agriculture as trigger of growth
  • Structural features
  • Arithmetic - ignoring agriculture (29 of the
    economy) is like walking on one leg
  • 65 of labor force - agriculture especially
    poverty reducing
  • Productivity growth in non-tradable food sector
    lowers food prices, keeping the tradable non-food
    sector competitive
  • Staple crops largest subsector (60-70 in Malawi,
    Zambia)
  • Local preferences (sorghum, millet, roots and
    tubers) high transaction costs (landlocked,
    remote regions) make food nontradable
  • Low food prices keep wages low and nonfood
    tradable sector competitive
  • Poverty reducing effects depend on net food
    marketing position of the poor - many of the
    rural poor are net food buyers (Madagascar).

16
Net selling smallholders are a minority
17
Agriculture as trigger of growth (2)
  • The tradable agricultural sector generates
    foreign exchange
  • Traditional (e.g. coffee) and nontraditional
    exports (fish in Uganda, flowers from Kenya,
    vegetables from Senegal)
  • Poverty reducing effects depend on participation
    as smallholder or laborer
  • Countries poor participate despite
    globalization and integrated chains

18
Agriculture as trigger of growth (3)
  • Substantial growth linkages from ag growth
  • Consumption and production linkages
  • 1 US in agriculture generates 0.3-0.5 US
    outside agriculture (econometric evidence Irz
    and Tiffen)
  • Size of multiplier
  • At least as large as the reverse effects from
    nonag to ag
  • Small country with large tradable sector
    (Lesotho) smaller multipliers large country with
    large nontradable sector (Cameroon, Tanzania),
    larger multipliers
  • Depends on resource availability f avorable
    investment climate to foster supply response of
    nontraded nonfarm goods
  • Linkages mainly occur through rural commerce and
    services (limited threat from import of cheap
    manufactured goods)

19
Agriculture as trigger of growth (4)
  • Comparative advantage in agriculture, at least in
    short to medium term
  • Food mostly nontradable frequent foreign
    exchange shortages
  • food demand doubles to 100 billion by 2015 from
    2000 (pop growth and high income elasticity
  • Growth in manufactured exports slow (excl
    Mauritius) due to comparative advantage in
    (processed) and unprocessed primary based exports
    (incl. tourism)
  • Factor endowments (rich in natural resources,
    poor in skilled labor)
  • Poor business environment, which is more
    important for manufacturing and high value
    services
  • Economies of scale Africa largely missed the
    boat

20
Agricultural growth has unique powers for poverty
reduction
21
Agricultural growth has unique powers for poverty
reduction
  • Bravo-Ortega Lederman, 2005
  • GDP growth from ag labor productivity 2.9 times
    more effective in raising incomes of poorest
    quintile
  • Christiaensen Demery, 2007
  • GDP growth from agric 2.7 times more effective
    in reducing 1 day poverty headcount among the
    poorest quarter of countries, and 2 times more
    effective among the richest quarter

Ligon Sadoulet, 2007
GDP growth from agriculture benefits the poor at
least twice as much as GDP growth originating in
non-agriculture
22
It can be doneand is happening
Agricultural growth in SSA has accelerated
23
Ghana a breaking story on poverty reduction
  • Rural poverty halved with increased agricultural
    productivity, higher cocoa prices, reduced food
    prices, and income diversification

24
New opportunities
  1. Better incentives
  2. Institutional and technological innovations
  3. New markets

25
Better incentives
  • Macro-economic env improved since 1995
  • as did ag gdp growth
  • From 30 taxation of ag in 1980 to 10 in 2004 in
    ag-based countries
  • High food prices ? supply response?

26
Declining net taxation, largely following
declining taxation of exportables
Developing countries are protecting importables
but taxing exportables less.
27
Innovations for production
  • Institutional ? reaching the frontier
  • Land (communal
  • certificates, Ethiopia)
  • Credit (lending
  • ladders,Guatemala)
  • Inputs (agro dealers
  • for fertilizers,Kenya)
  • Technological ? expanding the frontier
  • NERICA, GMO (Bt Cotton in China)
  • IT

Maize Yields in African countries
28
New markets
  • Staple crop demand in SSA expected to double by
    2015
  • Changing diets and globalization ? rising demand
    for high value products at home and abroad

29
New challenges
  1. Constraints on growth
  2. Making growth pro-poor
  3. Implementation bottlenecks

30
Constraints on Pro-poor Growth
  • Constraints on Growth
  • Soil degradation (e.g. soil erosion in Ethiopia,
    desertification agro-forestry in Niger)
  • Uncertainties (climate change high energy cost)
  • High transaction costs (roads, poor market
    development)
  • Making growth pro-poor
  • Connecting smallholders to new markets
    (Senegal,Kenya)
  • Access to assets (land, water, human capital)

31
Implementation bottlenecks
  • Weaknesses in governance (e.g. changing roles for
    the state as in extension)
  • Under and misinvestment in national and
    international public goods

32
Investing in core public goods pays
  • Average rate of returns to investments in ag RD
    in the range of 35 percent in SSA and 50 percent
    in Asia
  • High pay-off to investment in irrigation
  • Returns to projects now in the 15-20 range in
    SSA as elsewhere
  • Econometric evidence from rural Uganda, China and
    India shows highest returns (growth and poverty
    reduction) from ag RD, rural roads and rural
    education

33
More public investment required
Ag GDP/ GDP
Public spending on Ag / Ag GDP
Priorities research and extension, rural roads,
irrigation, human capital, institutions
34
And better investment needed
Zambias public budget for agriculture 2004/05
35
Better budgetary processes can improve
expenditure allocation
  • Detailed reviews of public expenditures in the
    agricultural sector
  • Impact evaluation of public spending in
    agriculture (beyond ag RD)
  • Medium term expenditure frameworks based on
    program budgets with clear objectives and
    transparent allocation to better align financial
    resources with priorities

36
Moving forward
  1. Focus on staple crop productivity growth
  2. A smallholder productivity revolution
  3. Decentralized, multi-sectoral, and regional

37
Focus on productivity increase
38
A smallholder-based productivity revolution, with
an eye on food security
  • More commercial smallholders
  • Producer organizations
  • Stronger markets
  • standards, institutions, infrastructure
    (warehousing, cold storage), brokerage services
    (finding markets and finance)
  • Better subsistence
  • technology, soil and water management, safety
    nets
  • Exit from the farm
  • investment climate, attract remittances, secure
    land tenure and functioning land markets

39
and address special features of the African
context
  • Approach will differ from Asian Green Revolution
  • Differentiated and thus decentralized and
    participatory to deal with huge heterogeneity
  • Very diverse farming systems
  • Food staples, traditional and nontraditional
    exports
  • Particular attention to needs of women farmers
  • Multisectoral to capture synergies
  • Regional approaches to deal with small country
    problem -NEPAD initiatives

40
Take away messages
41
Take away messages
  • A smallholder based agricultural productivity
    revolution is necessary to trigger growth and
    poverty reduction in agriculture based economies
  • More and better public investment and policies
    needed to do so (including ag RD)
  • The environmental agenda, incl. environmental
    services, an integral part of ag-for-development
    agenda, requiring better incentives and better
    regulation.
  • Emphasis on decentralized, participatory, and
    multisectoral approaches.

42
  • www.worldbank.org/WDR2008

43
Agriculture in transforming economies
44
Occupational transformation lags structural
transformation
45
Structural features
  • Economic growth driven by nonagricultural sectors
  • Labor transition out of agriculture is lagging
  • Increasing ruralurban divide with poverty
    concentrated in rural areas for decades to come
  • Increasing calls for agricultural protection and
    subsidies in transforming economies

46
The politically expedient versus the economically
efficient
47
Accelerating poverty reduction through rural
income growth
  • Urban migration is part of the answer
  • Urban migration accounts for 20 of decline in
    1/day poverty in EAP between 1993-2002
  • Pace and nature of urbanization matter
    (Philippines vs Thailand)
  • Rural income growth on and off the farm provides
    most prospects
  • Accounts for 75 of decline in 1/day poverty in
    EAP between 1993-2002
  • Growth in agriculture especially poverty reducing
  • GDP growth from agriculture benefits the income
    of the poor 2-4 times more than GDP growth from
    non-agriculture

48
Urban migration, yes but especially rural income
growth
49
But also new challenges
  • Constraints to growth
  • Competition for land and water from urbanization
  • Closing of the yield frontier no quick fixes
  • Rising uncertainties (climate change high energy
    cost)
  • Environmental challenges from intensification
  • Green the green revolution (pesticides
    fertilizer runoff)
  • Intensive animal husbandry water pollution
    disease
  • Making growth pro-poor
  • Participation of the poor in new markets (as
    smallholder or laborer)

50
Growth rates of cereal yields in developing
countries are slowing
51
A comprehensive rural development approach to
reduce rural poverty
  • Move beyond the Green Revolution towards
    sustainable and high value agriculture
  • Invest in ag RD and green the Green Revolution
  • Connect smallholders to high value product
    markets (contract farming producer
    organizations, ppps)
  • Assist subsistence farmers lagging regions
  • Extend modern agriculture (RDE) to areas with
    potential
  • Invest in skills for successful migration
  • Provide safety nets for those left behind
  • Activate rural labor markets pathways out of
    poverty
  • Regional development around agriculture or
    manufacturing
  • Secondary town infrastructure, public private
    partnerships

52
Take away messages
53
Take away messages
  • More and better investment in agriculture needed
    to accelerate poverty reduction and reach MDG 1
  • Smallholder based agricultural productivity
    revolution to trigger growth and poverty
    reduction in agricultural based economies
  • A comprehensive rural development approach (incl
    RNFE) needed to tackle growing rural urban
    divide in transforming countries and avoid the
    agricultural protection trap
  • Better natural resource management, including
    provision of environmental services, must be an
    integral part of the ag-for-development agenda.
    This requires better incentives and better
    regulation.
  • Emphasis on decentralized, participatory, and
    multisectoral approaches that redefine the
    relative roles of the state, the market and civil
    society.

54
  • www.worldbank.org/WDR2008

55
WDR messages on current issues
  • Doha must progress
  • Emphasis on anti-poor policies such as cotton
    subsidies
  • Need complementary supporting policies for
    transition and to respond to new market signals
  • Subsidies
  • Role of market-smart subsidies for input market
    development (and sometimes safety nets)
  • GMOs have unrealized potential for the poor
  • Offer promise but need public RD (or private
    incentives) and efficient regulatory frameworks
  • Biofuels will be important, but require caution
  • Improve efficiency, and recognize tradeoffs--food
    prices and the environment
  • Climate change requires immediate attention
  • Urgency of funding adaptation in poor countries
  • Extend carbon financing to provide agriculture
    incentives (agroforestry, avoid deforestation)
About PowerShow.com