Agriculture for Development
Toward a new paradigm and guidelines for success
A sequel to the World Development Report 2008
Forum on How to Feed the World in 2050, FAO, Rome Oct. 2009
Outline of the argument
 I. Historical perspective on agriculture in
development
 II. Current crises and resurgence of demands
on agriculture for development
 III. Emergence of a new paradigm of
agriculture for development
 IV. Why the continued under-use of agriculture
for development?
 V. Conditions for success in using agriculture
for development
 VI. The way forward
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I. Historical perspective on agriculture in
development
Well defined classical paradigm of the role of agriculture
in development in the 1960s
•Grounded in history: Western experience, Asian miracles
•Grounded in theory: Agriculture on the road to
industrialization
•Grounded in empirical regularities: Agricultural
transformation
•Grounded in behavior: Agriculture responsive to
incentives
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I. Historical perspective on agriculture in
development
Successes, but many implementation failures in the
1970s
•Urban bias in Import Substitution Industrialization
•Integrated rural development to meet broadened
development objectives flawed:
•Overestimated state capacity to coordinate
•Underestimated emerging private sector roles
•Undermined cooperative producer organizations
•Many failures in agriculture-based projects
•Too complex, insufficient support
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I. Historical perspective on agriculture in
development
Leading to 20 years of neglect of agriculture under the
Washington Consensus (1985-2005)
•Adjust the macro-fundamentals but no sectoral policy
•Industrialize through open economy not through agriculture
•Descale the role of the state in agriculture despite pervasive
market failures
•Reduce rural poverty through transfers instead of rising
autonomous incomes
•Investment in agriculture discouraged by low international
commodity prices (OECD farm policies) and adverse
environmental effects
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I. Historical perspective on agriculture in
development
Share of agriculture in public expendit ure
Share of agriculture in ODA (%)
14
14
12
12
NEPAD objective
10
10
8
8
6
6
4
4
2
2
0
1980
1985
1990
Uganda
1995
NEPAD
2000
2005
0
1980
1985
1990
1995
2000
2005
2010
Nigeria
Neglect of agriculture: Decline of the shares of agriculture in public
6
expenditures and in overseas development assistance
II. Current crises and resurgence of demands
on agriculture for development
 Following 20 years of neglect, five crises put
agriculture back on the development agenda:
1) The global food and financial crises: Rising
food insecurity and hunger
2) Stagnation of productivity growth in SubSaharan Africa agriculture
3) World poverty still overwhelmingly rural
4) Increasing rural-urban income disparities
5) Rising resource scarcity and unmet demands
for environmental services
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II. Current crises and resurgence of demands
on agriculture for development
Crisis 1: Global food and financial crises
The world food situation has changed drastically in the last three
years. This implies three major policy shifts:
•
Need give greater attention to the supply side of agriculture to
achieve sustainable productivity gains and greater resilience to
shocks.
•
Need raise again the issue of food security as a policy concern:
Combine trade, national food reserves, level of food self-sufficiency,
social safety nets, and role of subsistence farming.
•
Need focus not only on chronic poverty but also on vulnerability
to price and income shocks for net buyers of food: “new poor” and
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risks of irreversibilities in assets, health, and education due to shocks.
II. Current crises and resurgence of demands
on agriculture for development
Crisis 2: Stagnant productivity growth in SS-Africa
agriculture
Sources of growth in cereal production
400
East Asia
Yield (1961=100)
350
300
South Asia
250
Latin America
200
SS-Africa
150
100
100
120
140
160
180
200
Area (1961=100)
Area expansion has historically been the main source of output9
growth in cereal production in SS-Africa, but largely exhausted
II. Current crises and resurgence of demands
on agriculture for development
Fertilizer use (kg/ha of arable land)
Irrigated area (% of cropland)
300
40
East Asia
35
250
ME&N Africa
30
200
South Asia
25
150
20
South Asia
LAC
100
ME&N Africa
15
Latin America
10
50
0
1960
1970
1980
1990
2000
SS-Africa
5
SS-Africa
2010
0
1960
1970
1980
1990
2000
Stagnant yields are associated with low fertilizer use and limited
irrigated area. Understanding the determinants of yield growth
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(technology adoption) is a major research challenge
II. Current crises and resurgence of demands
on agriculture for development
Crisis 3: World poverty still overwhelmingly
rural
Number of rural poor (1993=100)
% of world poor rural by continent
120
100
SS-Africa
110
80
South Asia
100
60
90
Latin America
80
40
70
20
East Asia
60
0
LAC
EC A
SSA
SAS
MNA
EAP
World
50
1992
1994
1996
1998
2000
2002
2004
75% of world poor are still rural, and rural poverty is rising in 11SSAfrica and South Asia: Key to meet MDG#1
II. Current crises and resurgence of demands
on agriculture for development
Crisis 4: Rural-urban disparities are increasing
China: Mean per capita expenditure by sector
in constant LCU
India: Mean per capita expenditure by sector in constant LCU
(Average annual growth rate 1983-05 in parenthesis)
410
1200
Urban (1.43/year)
390
Urban
1000
370
350
800
330
600
Rural (0.92)
Rural
310
400
290
200
270
250
1980
1985
1990
1995
2000
2005
2010
0
1980
1985
1990
1995
2000
2005
Rising urban-rural income disparities in India and China as sources
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of political tensions
II. Current crises and resurgence of demands
on agriculture for development
Crisis 5: Rising resource scarcities and unmet
demands for environmental services
Average annual rate of change in forest area
0.3
0.2
0.1
0.0
-0.1
EAP
SA
LAC
SSA
-0.2
-0.3
-0.4
-0.5
-0.6
-0.7
1990-99
2000-05
The rate of deforestation is accelerating in LAC and SS-Africa.
Conservation agriculture, rapidly expanding worldwide, is barely
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adopted in Africa due to lower yields and high labor costs
III. Emergence of a new paradigm of
agriculture for development
These crises put new demands on using agriculture for
development, but with no possible return to the classical
paradigm for two reasons:
“Development” is no longer just industrialization
(1950-60) but multidimensional (1970-)
•Growth, poverty/hunger, vulnerability, equity,
sustainability
The structural context for agricultural growth has
changed drastically
•Globalization, integrated value chains, technological and
institutional innovations, environmental constraints 14
III. Emergence of a new paradigm of
agriculture for development
Hence emergence of a new paradigm of Agriculture for
Development to replace the classical paradigm
Two features of the emerging paradigm
1) Because development is multidimensional:
•Win-wins exist, but trade-offs are expected
•Need priority setting at the national level
2) Need use both the process and the outcome of agricultural
growth to achieve these multiple dimensions
•Role of smallholder farming
But two barriers to overcome:
Continued under-use of agriculture for development
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Unclear how to succeed in using agriculture for development
IV. Why the continued under-use of
agriculture for development?
Cross-section
Bangladesh
Cambodia
Hong Kong, China
India
Indonesia
Korea, Rep.
Malaysia
Myanmar
Pakistan
Papua New Guinea
Philippines
Thailand
China
Vietnam
Taiwan, China
Structural transformation in Asia
Share of Agriculture in Labor Force
1.0
0.9
0.8
China
0.7
India
0.6
Bangladesh
0.5
Pakistan
0.4
Malaysia
0.3
Rep. Korea
0.2
0.1
Normal pattern
0.0
4.5
5.5
6.5
7.5
Log of GDP per capita (constant 2000 US$)
8.5
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Successful structural transformations in Asia
IV. Why the continued under-use of
agriculture for development?
Share of Agriculture in Labor Force
1.0
0.9
0.8
Chad
0.7
0.6
Togo
0.5
Cote d'Ivoire
0.4
0.3
Cross-section
Angola
Benin
Cameroon
Chad
Cote d'Ivoire
Kenya
Madagascar
Niger
Nigeria
Rwanda
Senegal
South Africa
Tanzania
Togo
Zambia
Zimbabwe
Nigeria
0.2
South Africa
0.1
4.5
1.0
0.9
0.8
0.7
0.6
x
0.5
Argentina
Bolivia
Brazil
Chile
Colombia
Dominican Republic
Ecuador
Guatemala
Honduras
Haiti
Mexico
Peru
Paraguay
El Salvador
Venezuela, RB
0.4
0.3
0.2
0.1
Normal pattern
0.0
Structural transformation in Latin America and
Cross-section
Caribbean
Share of Agriculture in Labor Force
Structural transformation in Sub-Saharan
Africa
5.5
6.5
7.5
Log of GDP per capita (constant 2000 US$)
8.5
0.0
4.5
5.5
6.5
7.5
Log of GDP per capita (constant 2000 US$)
8.5
But agriculture is still under- and mis-used in Africa and Latin
America: Labor is pushed out of agriculture without associated
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growth in GDP per capita
IV. Why the continued under-use of
agriculture for development?
Resources are being committed to a Green Revolution
for Africa (NEPAD, G8, WB, AGRA), but will it succeed?
What we know: It must be different from the Asian GR
because of
Heterogeneity of conditions
 Need decentralization and participation
Multiple effective constraints
 Need a multisectoral approach
Small countries
 Need regional cooperation
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IV. Why the continued under-use of
agriculture for development?
It must be different from the Asian Green Revolution
In addition:
•It must go beyond cereals to include high value activities
•It must deal with sustainability and environmental friendliness
Beyond the seed-fertilizer-water package toward agro-ecology, agro-forestry,
and conservation agriculture.
•It must address brand new challenges
Energy prices, climate change, integrated value chains, globalization
•It must succeed urgently given the rapid changes in the world food
situation and distress of rural populations.
Answer: Continued under-use because we do not know enough
about how to do it, and are not adequately equipped to do it
successfully
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V. Conditions for success in using agriculture
for development
 Proposition: Two conditions for success in using
agriculture for development
 Condition 1: Need to re-conceptualize the role of
agriculture for development in the new paradigm
1) Recognize the complementarities and trade-offs in the multiple
functions of agriculture for development
 Define country priorities and strategy
2) Design the process of agricultural growth to achieve development
beyond market forces
 With eventual growth opportunity costs (e.g., debate on farm size)
3) Redefine the role of the state in support of agriculture
 State to set social priorities among conflicting functions, overcome market
failures, regulate, and engage in private-public partnerships.
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V. Conditions for success in using agriculture
for development
 Condition 2: Need to re-design approaches for
effective implementation in the new paradigm
1) Experiment with new approaches and internalize lessons for
scaling up successes in policy and practice
 Derive lessons from past mistakes and identify impacts in new options
2) Fix the governance structure for the state to fulfill its new
functions for agriculture
 Redesign ministries of agriculture to use growth for development with a
territorial perspective and a role for producer organizations
3) Develop expertise in using agriculture for development
 At the local (decentralization), national, and international levels
 Key role of the FAO as source of world expertise in using agriculture
for development
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VI. Conclusion: The way forward
Positive developments in support of using agriculture
for development: Grounds for optimism
Greater public awareness of importance of agriculture
for development, including poverty, gender, environment
More resources committed by governments, foreign
aid, new players, private sector
More attention from politicians to food crises, hunger
But can we deliver?
Do we know how to do it?
Do we have the capacity to do it?
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VI. Conclusion: The way forward
Guidelines for a successful use of agriculture for
development: Grounds for concern
The biggest mistake we can make is believe that it is
easy to do and that we already know enough to do it.
Effort must be massive, concerted, and sustained to
succeed: commitments must be met and continued
Short term political concerns with food must be
translated into long term concerns with agriculture
New approaches must be devised and evaluated(WDR)
Capacity to effectively use the resource committed is
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the main limiting factor to be addressed (FAO).
VI. Conclusion: The way forward
Making the emerging paradigm of
Agriculture for Development succeed
is essential but still uncertain
It is a major challenge and opportunity
that the international community must
address
alain@berkeley.edu
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