Five new insights on how agriculture can help reduce poverty
The view that a productive agriculture is critical for employment creation and poverty reduction is now widely shared within the development community. Yet, this has not always been the case. In the run up to the 2008 world food price crisis, many development practitioners, government officials and economists doubted whether agriculture could still play this role, especially in Africa. Agro-pessimism had set in during the 1990s and 2000s, with a decline in policy attention and agricultural investment. The food price spikes of 2008 brought a realization that more needed to be done to strengthen agriculture in developing countries.
Today, world food prices are still 70 percent higher than before the food price crisis (or 40-50 percent in real terms) and the trade and policy environment is much more favorable to agriculture. But African incomes have also grown, poverty has come down and countries are more urbanized. So, what then is the role of agriculture for poverty reduction today and is the favorable inclination towards agriculture of the past years also backed up by the more recent evidence?
Eight papers in a forthcoming Special Issue of World Development present the latest evidence. Using a multitude of analytical techniques (theoretical derivations, CGE modeling, econometrics), they confirm the continuing importance of agricultural development for poverty reduction. They also add important nuance. Here are five take-aways.