Business | Economy
Focus on agriculture key to ending global poverty
A renewed focus on agricultural development is critical to successfully reducing global poverty and hunger, according to the World Bank's World Development Report 2008: Agriculture for Development.
- By Babu Das Augustine, Banking Editor
- Published: 00:50 October 21, 2007
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Washington: A renewed focus on agricultural development is critical to successfully reducing global poverty and hunger, according to the World Bank's World Development Report 2008: Agriculture for Development.
The report, co-authored by economists from the World Bank Group and the University of California, Berkeley, points out that 2.1 billion people earning less than $2 per day live in rural areas, and most of them depend upon agriculture for their livelihoods. However, only four per cent of official development assistance to developing nations is earmarked for agriculture, down from 12 per cent in 1990.
Increasing support
In recent years, the World Bank has started to increase its support for agriculture and rural development, committing $3.1 billion for fiscal year 2007, but more is needed, according to the report.
"What we're hoping to do with this report is put agriculture back on the map," said Alain de Janvry, UC Berkeley professor of agricultural and resource economics and of public policy, and co-director of the report.
Derek Byerlee, an agricultural economist with the World Bank who wrote the report with Professor de Janvry, said at a panel discussion in Washington yesterday that United States subsidies to cotton growers were directly and negatively impacting African farmers.
Each year the World Bank's World Development Report provides in depth analysis of a specific aspect of development. This is the first time in the past 25 years the World Bank has produced a report exclusively focused on the role of agriculture in eliminating rural poverty. The last report on Agriculture was published in 1982.
According to the report, world demand for agricultural crops - for food, feed and biofuels - is expected to double within the next 50 years. At the same time, the natural resources that sustain agriculture will become increasingly scarce and degraded with overuse and the effects of climate change.
The report concludes that greater investment in agriculture is needed to trigger economic growth, and that economic growth originating in agriculture will benefit the income of the poor two to three times more than growth from the non-agricultural sector. The power of agricultural growth in getting large numbers of people out of poverty has been amply demonstrated by recent successes in China and Vietnam, according to the report's authors.
"We are proposing that the shares of public investment and foreign aid to agriculture be increased from 4 to 10 per cent in sub-Saharan Africa," said de Janvry.
Barriers
But along with investment, barriers to the development of the agricultural economy in sub-Saharan Africa need to be addressed, including farm subsidies in rich countries for key commodities such as cotton and oilseeds that depress prices for small farmers in developing nations.
The report also highlights the need to reduce politically destabilising income disparities in countries such as India and China by using agriculture as a pathway out of poverty.
This would require innovative policy initiatives to help people shift to high-value agriculture as well as to decentralising non-farm economic activity, such as food processing, to rural areas.
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