Agricultural transformations, growth and poverty Rob Vos FAO - - PowerPoint PPT Presentation

Agricultural transformations, growth and poverty

Rob Vos

FAO Director Rural Poverty Reduction

UNU-WIDER 30th Anniversary Conference Helsinki, 18 September 2015

 We produce enough food in the world to feed everyone..  … and the 2015 MDG 1 target of halving poverty and hunger has been met ….  … yet about 1 billion continue to live in extreme poverty and 800 million people are food insecure

Food Insecurity and Rural Poverty

1 billion extreme poor

800 million food insecure More than 2 billion with micronutrient deficiency

Food Insecurity and Rural Poverty

 Food insecurity has declined in most countries…  …yet, progress has been very uneven:  75% of poor and food insecure live in South Asia and Africa  More than 75% of poor and food insecure live in rural areas, most smallholders depending on agriculture and living in lagging regions and stuck in chronic poverty Our food systems are highly inefficient and unequal To eradicate poverty and hunger will require new approaches New role for agriculture in growth strategies

Agriculture’s role in development

 Agriculture essential to kick start growth ….

 Initial support to unleash productivity growth

 But….then divert investments to industry

 No big direct impact on growth – low productivity sector  Share in GDP will decline over time (stylized fact)

 Traditional views led to urban bias and relative

neglect of agriculture

Peter Timmer: “No country has been able to sustain rapid economic growth until its citizens and investors were confident that food was reliably available in the main urban markets.” (2014 UNU-WIDER lecture)

Structural transformations

 Falling share agriculture in GDP and employment

 Decreasing contribution to growth (but no low-productivity sector!)  Widening urban-rural gaps

 Changing nature of agriculture in economy

 Consolidation landholdings, rural labour outmigration  Integrated food systems, supermarket revolution

 Dietary transition with income and urban growth and with

“supermarket” revolution (Engel’s and Bennet’s laws)

 Further closing in on land frontiers  Nutritional gains, as well as losses (new malnutrition)

Nature of agriculture transformation matters for poverty reduction

 Agricultural growth more effective (more than 3 times) in

reducing poverty among the poorest of the poor (in low- income countries)

 Agricultural labour productivity growth is critical

 Non-agricultural (non-extractive industry) growth more

effective to reduce poverty for moderate poor (and in middle-income countries)

 Land access and tenure matter: slower growth and

transformation process where there is “reverse land size transition”

 Geography and rural-urban linkages matter: accelerated

exit from poverty through non-farm rural employment in rural townships and small cities

This time has to be different…

 Climate change and environmental degradation

 The imperative of sustainable intensification  A new, green agricultural transformation is needed  … with new growth opportunities  … new viable options for smallholder farmers

 Demographic transitions and migration crisis

 Ageing farmers worldwide  Untapped “youth power” potential ( source of distress migration)  … revived roles for agricultural employment  … new vision of territorial development

Sustainable structural transformations



Revisit role of agriculture in growth strategies:



Sustainable intensification will require massive new investments in sector



Revisit role of contract farming to reshape global food value chains



Potential for TFP growth and job creation (60 million according to ILO)



Poorest areas: integrated agro-ecological farming  on the farm and up the value chain and through extension services



Smallholder farming central but needs to overcome constraints to economies of scale through rural organizations



Overcoming constraints in land tenure



Make youth drivers of change



Pushing up both land and labour productivity



Increased role for social protection



Everywhere: new geography



Rural territorial development



New urbanization: development of peri-urban agriculture and infrastructure development for rural townships and small to intermediate cities critical to forge new rural-urban linkages

Agricultural transformations, growth and poverty

Rob Vos

FAO Director Rural Poverty Reduction

rob.vos@fao.org

Referenced graphs and tables

991 908 927 805 780

MDG target 23.3% 18.2% 17.3% 14.1% 12.9% 5% 10% 15% 20% 25% 30% 35% 40% 45% 300 400 500 600 700 800 900 1,000 1,100

FIGURE 1 The trajectory of undernourishment in developing regions: actual and projected progress towards the MDG and WFS targets

Number (left axis) WFS Target MDG Target Prevalence (right axis)

WFS target Millions Percentage

Note: Data for 2014–16 in all graphics refer to provisional estimates. Source: FAO

Uneven progress

• Upward trend in the number of

hungry in Africa

1990-92 2000-02 2005-07 2009-11 2012-14 0% 5% 10% 15% 20% 25% 30%

Number of people undernourished % of World Total

India China South-Eastern Asia Sub-Saharan Africa

100 200 300 400 500 600 700 800 900

Number of Poor by Region (millions)

China India Sub-Saharan Africa

• Upward trend in absolute

number of poor in Africa

Future sources of growth of crop production

10 20 30 40 50 60 70 80 90 100

Sub-Saharan Africa Near East & North Africa Latin America & Caribbean South Asia East Asia World

Arable land expansion Increases in cropping intensity Yield increases

Reverse farm size transition

Low Medium High

5 10 15 20 25

Marginal Small Medium Large

Off-farm diversification

% Households

Farm size

Source: Hazell (2013)

Agricultural land versus labour productivity