Agriculture, Propoor Growth and Rural Development

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Agriculture for Development What research
priorities?
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Agriculture for development in the headlines
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Agriculture for development in the headlines why?

• MDG1 unmet as 2015 deadline approaches, with 75
  of world poor rural
• End of cheap food
• Rising rural-urban disparities
• Climate change, IPCC-Gore-Bali
• New demands on agriculture biofuels, healthy
  foods, environmental services
• Pandemics linked to agriculture
• Threats to the family farm and rural exodus
• --gt Urgent questions for research

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WDR 2008 main message
To meet the headline challenges of using
agriculture for development, agriculture must be
given a more prominent place in government and
donor priorities With an important role for
research Successful use of agriculture for
development requires reconsidering the relative
roles of the state, market, civil society
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Outline of presentation

• Agriculture for development
• what research priorities?
• WDR logical framework
• Multiple worlds, pathways, functions
• 2. Five main research axes
• 3. Knowledge gaps what we wish we had known
• 4. A post-WDR research agenda

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1. WDR logical framework Multiple worlds of
agriculture for development
--gt Will require differentiated responses
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1. WDR logical framework Multiple pathways from
poverty
--gt Requires differentiated policies
Pre-conditions Socio political context
Governance Macro fundamentals
Efficient markets, value chains
Demand for Ag products
Demand for Ag products
Commercial smallholders
Rural labor market Ag, RNFE. Migration
Pathways out of poverty farming, labor,
migration
Transition to market
Transition to commercialization
Social assistance
Subsistence farming
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1. WDR logical framework Multiple functions of
agriculture for development

• Functions
• 1. Source of growth for the economy
  (agriculture-based countries)
• 2. Source of income and livelihoods
• 3. Source of environmental services
• Logical framework
• Agriculture for development
• Worlds, pathways, functions
• Heterogeneity and complexity (positive analysis)
• Differentiated responses (normative analysis)

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2. The five main research axes

• 1. Agriculture-based countries Agriculture to
  trigger growth
• A productivity revolution in smallholder farming
  for GDP growth (entrepreneurship, favorable
  regions)
• Food security in subsistence farming and marginal
  regions
• 2. Transforming countries Agriculture to reduce
  disparities
• A comprehensive approach to rural development to
  reduce rural-urban disparities
• High value agriculture, rural nonfarm economy,
  migration

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2. The five main research axes

• 3. Urbanized countries Agriculture to facilitate
  social incorporation
• Smallholder competitiveness and coexistence
  large-small farms
• Territorial development
• 4. Agriculture to make the environment and
  development agendas complementary
• Incentives and regulations to achieve
  sustainability, reduce emissions from agriculture
  (PES)
• Adapt farming systems to climate change

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2. The five main research axes

• 5. Improve governance for agriculture
• Restructure Ministries of Agriculture
• Decentralization and democratization for
  agriculture
• Community governance for devolution (CDD)

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3. The main knowledge gaps What we wish we had
known

• Three types of knowledge gaps to better use
  agriculture for development
• Information gaps or puzzles diagnostics
• Analytical gaps theory, case studies,
  empiricism, simulations
• Innovation and evaluation gaps impact and
  learning for change
• Discussion
• A selection of seven notable knowledge gaps

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1. From public investment to poverty reduction

• Information gaps Lack of data to estimate the
  growth --gt poverty relation in poor countries
  (3).
• Analytical gaps
• (1) Public investment --gt growth few estimates
• (2) Intersectoral growth multipliers not
  estimated.
• (3) Growth-poverty elasticity Latin America why
  so low?

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Growth originating in agriculture and income
gains for the poor
Need estimate for each world of agriculture
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Growth-poverty elasticity How to explain the
LAC exception?
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2. Rural households and pathways out of poverty

• Information gap are rural household incomes
  diversified?
• Individuals are specialized
• Households have a multiplicity of activities
  (members)
• The rural economy has diversified incomes
• Households have concentrated incomes (most more
  than 75 from one source)
• Analytical gap why are fertilizers under-used in
  Africa when profitable?
• Information? Liquidity? Risk? Commitment device?

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Households differ, but incomes are mainly from
one source
Sources of income for rural households,
Bangladesh
Frequency distribution of income by source
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3. Analytical gaps on major trade-offs by world
of agriculture

• Agriculture-based countries
• Market-oriented vs. subsistence farmers for
  growth and food security optimum balance?
• Transforming countries
• Transfers vs. earned incomes to reduce
  rural-urban income gaps optimum balance?
• Urbanized countries
• Growth in mid and large scale agriculture with
  employment and social safety nets vs. smallholder
  incorporation optimum balance?

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Contract farmers and estate farm workers in
Senegal green bean exports who gains most?
Smallholder farming vs. wage employment
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4. International trade and policy reforms

• Analytical gaps Simulation models not estimated
• Social disaggregation insufficient to identify
  winners and losers
• CGE models better to capture trade policy than
  monetary policy and subsidies normative bias
• Post-liberalization investment dynamics poorly
  understood vs. protection
• --gt Limits the capacity to design of
  compensations and aid-for-trade policies

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Information gap On what side of the market are
most of the poor?

Madagascar Ethiopia
Vietnam
of internationally traded staples in food
consumption of the poor
63 24
64
Distribution of the poor
Urban (buyers)
Rural landless (buyers)
Smallholder net buyers
Smallholder self-sufficient
Smallholder net seller
Impact of rising food prices (Doha) on poverty
depends on the position of the poor on the
market Few will benefit as net sellers (in
blue) Of those, who will have the capacity to
respond?
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5. Rural labor market and the rural nonfarm
economy

• Information gaps
• Status of rural labor seasonality, informality,
  child labor, poverty traps
• Heterogeneity of rural nonfarm economy (RNFE)
  (what enterprise population firms, households?)
• Analytical gaps
• Labor demand territorial dynamics
• Labor supply an integrated labor market with
  different skills
• How to promote the RNFE? Investment climate vs.
  targeted subsidies

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Heterogeneity of rural nonfarm economy
(Investment climate survey Indonesia)
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6. Political economy of agriculture for
development

• Information gaps. Identify new actors and their
  policy roles Producer organizations, agro
  industry and value chains, environmental
  interests.
• Example Coalitions in support of investment in
  agriculture and coalitions in favor of subsidies
• Analytical gaps. How to design policy reforms for
  political feasibility?
• Example Political economy of subsidies
  (electricity in India fertilizer Malawi
  Procampo Mexico)

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7. Innovations in need of experimentation and
evaluation

• Old approaches
• Green Revolution, integrated rural development,
  parastatals, subsidized credit, TV extension
• New approaches Multiple worlds, pathways,
  functions
• Heterogeneity, complexity
• Market-driven smallholder competitiveness
  entrepreneurship, organizations,
  commercialization (land reform), value chains,
  institutional innovations
• Food security in subsistence farming and social
  assistance programs resilient farming systems
• Inter-sectoral territorial synergies labor
  market (large farms, RNFE), rural-urban linkages,
  clusters
• Public-private and private-civil society
  partnerships multi-stakeholder
• Adaptation to climate change and resilience
• Quality of governance at national and
  decentralized levels

--gt Impact identification strategies as integral
components of project design and mechanisms for
institutional learning
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4. Conclusion A post-WDR research agenda

• Agriculture in the headlines
• Urgent to fill the knowledge gaps to better use
  agriculture for development
• 1. Information gaps need invest in information
  generation and interdisciplinary diagnostics
• 2. Analytical gaps need improve the quality of
  analysis (theory, case studies, empiricism,
  simulations)
• 3. Innovation and evaluation gaps need
  systematize evaluation and its use to learn and
  change

http//www.worldbank.org/wdr2008