Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN) Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN)

World Development Report 2008: Agriculture for Development
The World Bank

An African woman bent under the sun, weeding sorghum in an arid fi eld with a hoe, a child strapped on her back - a vivid image of rural poverty. For her large family and millions like her, the meager bounty of subsistence farming is the only chance to survive. But others, women and men, have pursued different options to escape poverty. Some smallholders join producer organizations and contract with exporters and supermarkets to sell the vegetables they produce under irrigation. Some work as laborers for larger farmers who meet the scale economies required to supply modern food markets. Still others, move into the rural nonfarm economy, starting small enterprises selling processed foods.

While the worlds of agriculture are vast, varied, and rapidly changing, with the right policies and supportive investments at local, national, and global levels, today’s agriculture offers new opportunities to hundreds of millions of rural poor to move out of poverty. Pathways out of poverty open to them by agriculture include smallholder farming and animal husbandry, employment in the “new agriculture” of high-value products, and entrepreneurship and jobs in the emerging rural, nonfarm economy.

In the 21st century, agriculture continues to be a fundamental instrument for sustainable development and poverty reduction. Three of every four poor people in developing countries live in rural areas - 2.1 billion living on less than $2 a day and 880 million on less than $1 a day - and most depend on agriculture for their livelihoods. Given where they are and what they do best, promoting agriculture is imperative for meeting the Millennium Development Goal of halving poverty and hunger by 2015 and continuing to reduce poverty and hunger for several decades thereafter. Agriculture alone will not be enough to massively reduce poverty, but it has proven to be uniquely powerful for that task. With the last World Development Report on agriculture completed 25 years ago, it is time to place agriculture afresh at the center of the development agenda, taking account of the vastly different context of opportunities and challenges that has emerged.

Agriculture operates in three distinct worlds - one agriculture-based, one transforming, one urbanized. And in each the agriculture-for-development agenda differs in pursuing sustainable growth and reducing poverty.

In the agriculture-based countries, which include most of Sub-Saharan Africa, agriculture and its associated industries are essential to growth and to reducing mass poverty and food insecurity. Using agriculture as the basis for economic growth in the agriculture-based countries requires a productivity revolution in smallholder farming. Given Sub-Saharan Africa’s unique agriculture and institutions, that revolution will have to be different from the Asian green revolution. How to implement it after many years of limited success remains a diffi cult challenge. But conditions have changed, and there are many local successes and new opportunities on which to build.

In transforming countries, which include most of South and East Asia and the Middle East and North Africa, rapidly rising rural-urban income disparities and continuing extreme rural poverty are major sources of social and political tensions. The problem cannot be sustainably addressed through agricultural protection that raises the price of food (because a large number of poor people are net food buyers) or through subsidies. Addressing income disparities in transforming countries requires a comprehensive approach that pursues multiple pathways out of poverty - shifting to highvalue agriculture, decentralizing nonfarm economic activity to rural areas, and providing assistance to help move people out of agriculture. Doing this calls for innovative policy initiatives and strong political commitment. But it can benefit 600 million of the world’s rural poor.

In urbanized countries, which include most of Latin America and much of Europe and Central Asia, agriculture can help reduce the remaining rural poverty if smallholders become direct suppliers in modern food markets, good jobs are created in agriculture and agroindustry, and markets for environmental services are introduced.

With rising resource scarcity and mounting externalities, agricultural development and environmental protection have become closely intertwined. Agriculture’s large environmental footprint can be reduced, farming systems made less vulnerable to climate change, and agriculture harnessed to deliver more environmental services. The solution is not to slow agricultural development - it is to seek more sustainable production systems. The fi rst step in this is to get the incentives right by strengthening property rights and removing subsidies that encourage the degradation of natural resources. Also imperative is adapting to climate change, which will hit poor farmers the hardest - and hit them unfairly because they have contributed little to its causes.

Agriculture thus offers great promise for growth, poverty reduction, and environmental services, but realizing this promise also requires the visible hand of the state - providing core public goods, improving the investment climate, regulating natural resource management, and securing desirable social outcomes. To pursue agriculturefor - development agendas, local, national, and global governance for agriculture need to be improved. The state will need greater capacity to coordinate across sectors and to form partnerships with private and civil society actors. Global actors need to deliver on a complex agenda of interrelated agreements and international public goods. Civil society empowerment, particularly of producer organizations, is essential to improving governance at all levels.

This Report addresses three main questions:
  • What can agriculture do for development? Agriculture has served as a basis for growth and reduced poverty in many countries, but more countries could benefit if governments and donors were to reverse years of policy neglect and remedy their underinvestment and misinvestment in agriculture.
  • What are effective instruments in using agriculture for development? Top priorities are to increase the assets of poor households, make smallholders - and agriculture in general - more productive, and create opportunities in the rural nonfarm economy that the rural poor can seize.
  • How can agriculture-for-development agendas best be implemented? By designing policies and decision processes most suited to each country’s economic and social conditions, by mobilizing political support, and by improving the governance of agriculture.

Top of page   -   Home   -   Disclaimer
Food, Agriculture and Natural Resources Policy Analysis Network
Octoplus Information Solutions