Those of us who preach the gospel of agriculture with evangelical zeal find the text compelling and convincing. We are regularly possessed by the spirit only to look around and see out colleagues, in other sectors, in country management, or even our senior management doubting, yawning or subtly edging towards the door. We face the implicit query, “If agriculture can do such great things, why have they not yet happened?”
The past decade has been one of agro-pessimism. The promises that agricultural development seem to hold did not materialise. This pessimism seemed to coincide with pessimism about Sub-Saharan Africa. Especially for Sub-Saharan Africa the hope was that economic development would be brought about by agricultural development. After the success of the green revolution in Asia, the hope was that a similar agricultural miracle would transform African economies. But this hope never materialised, agricultural productivity did not increase much in SSA, and worse, the negative effects of the green revolution in Asia became more apparent, such as pesticide overuse and subsequent pollution. Also in Asia the yield increases tapered off.
The sceptics put forward several arguments why agriculture is no longer an engine of growth. For instance, the liberalisation of the 1990s and greater openness to trade has lead to a reduction in the economic potential of the rural sector: cheap imported Chinese plastic buckets out compete the locally produced pottery. On the other hand, it does mean cheaper (imported) supplies. With rapid global technical change and increasingly integrated markets, prices fall faster than yields rise. So, rural incomes fall despite increased productivity if they are net producers. The integration of rural with urban areas means that healthy young people move out of agriculture, head to town, leaving behind the old, the sick and the dependent. It is often also the men who move to urban areas, leaving women in charge of the farm. This has resulted in the increased sophistication of agricultural markets (and value chains) which excludes traditional smallholders, who are poorly equipped to meet the demanding product specifications and timeliness of delivery required by expanding supermarkets. The natural resource base on which agriculture depends is poor and deteriorating.
Table of Contents
- Introduction
- Agriculture and economic growth
- Drivers of change
- Globalization and liberalization
- Vertical coordination in international value chains
- Urbanization
- HIV/AIDS
- Increasing limits to natural resource use
- Climate change
- Economic development and pro-poor growth
- Does economic growth lead to poverty reduction?
- The role of agricultural trade
- Linkages between agricultural and non-agricultural sector
- Backward and forward linkages
- Factor markets: land, labour and capital
- Inclusion and exclusion: the role of small farms
- Discussion and conclusion
Objectives and Key Themes
This policy paper aims to reassess the role of agriculture in economic development, particularly its contribution to poverty reduction. It explores the changing nature of the agricultural sector, investigates the relationship between agricultural growth and pro-poor development, examines the linkages between agriculture and other sectors, and analyzes the inclusion and exclusion of small farms in agricultural development. The paper also seeks to address why, despite significant efforts and investments, agricultural development hasn't yielded more widespread success.
- The contribution of agriculture to economic growth and poverty reduction.
- Key drivers of change within the agricultural sector (globalization, urbanization, etc.).
- The relationship between economic/agricultural growth and pro-poor development.
- Linkages between the agricultural sector and other sectors of the economy.
- The role of small farms in agricultural development and the issues of inclusion and exclusion.
Chapter Summaries
Introduction: This chapter introduces the ongoing debate surrounding the role of agriculture in economic development. It highlights the past decade's agro-pessimism, contrasting it with earlier optimism fueled by the Green Revolution in Asia. The chapter examines arguments questioning agriculture's role as an engine of growth, citing factors like trade liberalization, global technical change, rural-urban migration, and the deteriorating natural resource base. It concludes by noting a renewed interest in agriculture's importance in recent policy documents, emphasizing the need for a reassessment of its role in development.
Agriculture and economic growth: This section presents factual observations about changes in agricultural productivity, contribution to economic growth, and relevance to poverty alleviation across different regions. It points out the paradox of agriculture's declining share in GDP despite increasing productivity, suggesting that while agriculture contributes to overall growth, its relative importance diminishes as other sectors expand. The section also discusses the shift in rural populations towards urban areas and the persistence of rural poverty, highlighting the importance of focusing on rural areas for poverty reduction efforts.
Drivers of change: This chapter delves into the multifaceted factors driving change within the agricultural sector. It examines globalization and liberalization's impact on agricultural markets, the influence of vertical coordination in international value chains, the effects of urbanization on rural populations and agricultural labor, the challenges posed by HIV/AIDS, the increasing constraints on natural resource use, and the significant implications of climate change on agricultural practices and yields. Each of these elements is explored as a key factor altering the agricultural landscape and posing both challenges and opportunities for development.
Economic development and pro-poor growth: This chapter explores the complex relationship between economic growth and poverty reduction, with a specific focus on the role of agricultural trade. It questions the assumption that economic growth automatically translates to poverty reduction and analyzes the ways in which agricultural trade can either benefit or harm poor populations. The discussion likely involves issues such as fair trade practices, market access, and the impact of global price fluctuations on smallholder farmers. The chapter's analysis aims to shed light on how policies can be designed to ensure that agricultural growth contributes meaningfully to poverty reduction.
Linkages between agricultural and non-agricultural sector: This chapter examines the interconnections between the agricultural sector and other sectors of the economy. It explores both backward and forward linkages, illustrating how agricultural activities affect and are affected by other industries. The analysis also likely delves into the role of factor markets (land, labor, capital) in shaping the agricultural sector's performance and its contribution to overall economic growth. The chapter's aim is to provide a detailed understanding of the ripple effects of agricultural development across the entire economy.
Inclusion and exclusion: the role of small farms: This section focuses on the critical issue of inclusivity and exclusivity within agricultural development, particularly concerning the role of small farms. It analyzes the challenges and opportunities faced by smallholder farmers, examining how policies and market structures can either support or marginalize them. This analysis will likely involve discussing the impact of technological change, market access, credit availability, and social safety nets on the livelihoods of smallholder farmers. The aim is to offer an insight into strategies to ensure more equitable participation and benefit-sharing within the agricultural sector.
Keywords
Agriculture, economic development, poverty reduction, agricultural growth, globalization, liberalization, value chains, urbanization, HIV/AIDS, natural resources, climate change, pro-poor growth, agricultural trade, small farms, inclusion, exclusion, linkages, factor markets.
FAQ: A Comprehensive Language Preview on Agriculture's Role in Economic Development
What is the main focus of this policy paper?
This policy paper reassesses agriculture's role in economic development, especially its contribution to poverty reduction. It explores the changing agricultural sector, the relationship between agricultural growth and pro-poor development, the linkages between agriculture and other sectors, and the inclusion/exclusion of small farms in agricultural development. It also addresses why agricultural development hasn't been more successful despite significant efforts and investments.
What are the key themes explored in the paper?
Key themes include agriculture's contribution to economic growth and poverty reduction; key drivers of change in the agricultural sector (globalization, urbanization, etc.); the relationship between economic/agricultural growth and pro-poor development; linkages between the agricultural sector and other sectors; and the role of small farms in agricultural development and issues of inclusion and exclusion.
What topics are covered in the Introduction chapter?
The introduction discusses the ongoing debate about agriculture's role in economic development, highlighting past agro-pessimism versus earlier optimism (Green Revolution). It examines arguments questioning agriculture's role as a growth engine, citing factors like trade liberalization, global technical change, rural-urban migration, and deteriorating natural resources. It concludes by noting renewed interest in agriculture's importance in recent policy documents.
What does the chapter on "Agriculture and economic growth" cover?
This section presents factual observations on changes in agricultural productivity, contribution to economic growth, and relevance to poverty alleviation across regions. It points out the paradox of agriculture's declining share in GDP despite increasing productivity, and discusses the shift in rural populations towards urban areas and the persistence of rural poverty.
What are the "Drivers of change" discussed in the paper?
The chapter explores globalization and liberalization's impact on agricultural markets; vertical coordination in international value chains; urbanization's effects on rural populations and agricultural labor; challenges posed by HIV/AIDS; increasing constraints on natural resource use; and climate change's implications on agricultural practices and yields.
How does the paper address "Economic development and pro-poor growth"?
This chapter explores the complex relationship between economic growth and poverty reduction, focusing on agricultural trade. It questions whether economic growth automatically translates to poverty reduction and analyzes how agricultural trade can benefit or harm poor populations. Issues like fair trade, market access, and the impact of global price fluctuations on smallholder farmers are likely discussed.
What are the "Linkages between agricultural and non-agricultural sector"?
This chapter examines the interconnections between the agricultural sector and other sectors, exploring backward and forward linkages. It delves into the role of factor markets (land, labor, capital) in shaping the agricultural sector's performance and its contribution to overall economic growth.
What is the focus of the chapter on "Inclusion and exclusion: the role of small farms"?
This section focuses on inclusivity/exclusivity in agricultural development, particularly concerning small farms. It analyzes challenges and opportunities faced by smallholder farmers, examining how policies and market structures can support or marginalize them. It discusses the impact of technological change, market access, credit availability, and social safety nets on smallholder farmers' livelihoods.
What are the key words associated with this policy paper?
Key words include: Agriculture, economic development, poverty reduction, agricultural growth, globalization, liberalization, value chains, urbanization, HIV/AIDS, natural resources, climate change, pro-poor growth, agricultural trade, small farms, inclusion, exclusion, linkages, factor markets.
- Quote paper
- Dr. Veena Soni (Author), 2020, The role of agriculture in economic development. Focusing on linkages beyond agriculture, Munich, GRIN Verlag, https://www.grin.com/document/593574
