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
1. Introduction
2. Agriculture and economic growth
3. Drivers of change
Globalisation and liberalisation
Vertical coordination in international value chains
Urbanisation
HIV/AIDS
Increasing limits to natural resource use
Climate change
4. Economic development and pro-poor growth
Does economic growth lead to poverty reduction?
The role of agricultural trade
5. Linkages between agricultural and non-agricultural sector
Backward and forward linkages
Factor markets: land, labour and capital
6. Inclusion and exclusion: the role of small farms
7. Discussion and conclusion
Objectives and Core Topics
This paper assesses the role of agriculture in economic development, specifically examining how the sector contributes to poverty reduction and how it has changed amidst global trends. It addresses the fundamental relationship between agricultural growth and poverty, identifies key drivers of change, and explores linkages between the agricultural and non-agricultural sectors to determine why previous development efforts have faced challenges.
- The relationship between agricultural productivity and poverty alleviation.
- Key drivers of agricultural change, including globalization, urbanization, and climate change.
- Economic mechanisms and multipliers linking agricultural growth to the broader economy.
- The challenges smallholders face in globalized, vertically coordinated value chains.
- The role of policy interventions and safety nets in pro-poor economic development.
Excerpt from the Book
1. Introduction
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?”1
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 (figure 1), 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.
Summary of Chapters
1. Introduction: Discusses the historical "agro-pessimism" regarding the sector's ability to drive development and introduces the paper's central questions regarding agriculture's role in modern economies.
2. Agriculture and economic growth: Provides factual observations on how the agricultural sector has evolved regarding productivity and its declining share in GDP, while maintaining its relevance for poverty reduction.
3. Drivers of change: Analyzes the macro-forces transforming agriculture, including globalization, trade liberalization, vertical coordination, urbanization, HIV/AIDS, and environmental constraints.
4. Economic development and pro-poor growth: Examines the theoretical and empirical links between economic growth and poverty, and investigates how trade liberalization affects poor rural households.
5. Linkages between agricultural and non-agricultural sector: Explores the multiplier effects of farm income on local economies and the critical importance of rural non-farm activities and factor markets.
6. Inclusion and exclusion: the role of small farms: Critically evaluates the position of smallholder farmers within the "new agriculture" and their struggle to participate in modern, demanding value chains.
7. Discussion and conclusion: Synthesizes the analysis and highlights the emergent policy agenda, emphasizing the need for both sector-specific support and effective safety nets for the poor.
Keywords
Agriculture, Economic Development, Poverty Reduction, Smallholder Farmers, Value Chains, Globalization, Trade Liberalization, Rural Non-Farm Economy, Food Staples, Productivity Growth, Institutional Constraints, Vertical Coordination, Sustainable Development, Multiplier Effects, Safety Nets.
Frequently Asked Questions
What is the core focus of this publication?
The publication focuses on the evolving role of agriculture in economic development, specifically analyzing its contribution to poverty reduction in developing countries.
What are the primary themes addressed in the text?
The main themes include the link between agricultural growth and poverty, drivers of sectoral change such as urbanization and climate change, and the role of vertical integration in value chains.
What is the central research question?
The central question is how agriculture contributes to economic development and poverty reduction, and why significant efforts and investments in the sector have not always led to the expected success.
Which scientific approaches are utilized?
The paper employs a comprehensive literature review combined with the analysis of empirical data and factual observations from various regions, specifically focusing on productivity and poverty metrics.
What does the main body of the work cover?
The main body covers the drivers of agricultural change, the relationship between growth and poverty, inter-sectoral linkages, and the challenges regarding the inclusion of small-scale farmers in the global market.
Which keywords best describe the work?
The work is best characterized by terms such as smallholder farmers, poverty reduction, value chains, globalization, and rural development.
How does "new agriculture" impact small farmers?
The "new agriculture"—characterized by high-value crops and strict quality standards—often poses a significant challenge for small farmers due to their limited access to technology, finance, and information, potentially leading to their exclusion from these markets.
Why are rural non-farm activities important?
Rural non-farm activities serve as a crucial livelihood strategy for many households, providing income diversification and bridging financial gaps that arise from agricultural market failures.
What role do safety nets play in this context?
Safety nets are considered essential to support the most vulnerable rural populations who lack the assets to participate in growth-oriented agricultural transformations, though they should complement rather than replace agricultural policy support.
- Citation du texte
- Dr. Veena Soni (Auteur), 2020, The role of agriculture in economic development. Focusing on linkages beyond agriculture, Munich, GRIN Verlag, https://www.grin.com/document/593574
