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Agriculture for Development
Sixteenth Session of the UN Commission on Sustainable Development5 May 2008
Erick C.M. FernandesAdvisor, Land and Natural Resource ManagementAgriculture and Rural DevelopmentThe World Bank
2
World Development Report 2008
Outline
Key WDR findings and messagesImproved OpportunitiesChallenges to be addressedWhat can be done?WDR recommendations
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World Development Report 2008
75% of the world’s poor are rural and most are involved in farming.
In the 21st century agriculture remains fundamental for poverty reduction, economic growth and environmental sustainability.
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World Development Report 2008
Agriculture based countriesMainly SS-Africa
417 million rural people
Transforming countriesMainly Asia, MENA
2.2 billion rural people
Urbanized countriesMainly Latin America
255 million rural people
Agr
icul
ture
’s s
hare
in g
row
th 1
990-
2005
Rural poor/total poor, 2002
The three worlds of agriculture
0 100%
80%
0
50%
20%
Three Functions of Agriculture for Development
1.
Lead sector for growth
2.
Source of livelihoods
3.
A way of better managing natural resources (and benefiting from environmental services)
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World Development Report 2008
2.3
3.33.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1980-1990 1990-2000 2000-2005Ave
rage
ann
ual r
eal a
gric
ultu
ral g
row
th(%
)
Large sector for GDP growthAffordable food and wage competitivenessComparative advantage in tradeStrong growth linkages
1. A trigger for overall growth
Accelerating agricultural growth in AfricaAccelerating agricultural growth in Africa
Success:China, India, Vietnam
Success:China, India, Vietnam
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World Development Report 2008
2.5 billion people depend directly on agriculture
800 m smallholders
75% of poor are rural and the majority will be rural to about 2040
Global extreme poverty 2002, $1.08 a dayGlobal extreme poverty 2002, $1.08 a day
GlobalUrban poor
287 mill. South Asia rural 407 mill.
Sub-SaharanAfrica rural
229 mill.
East Asia rural
218 mill.LAC rural27 mill.
ECA rural5 mill.
MENA rural5 mill.
2. A source of livelihoods
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World Development Report 2008
Agriculture
Non-agriculture-2
0
2
4
6
8
Low est 2 3 4 5 6 7 8 9 Highest
Expenditure deciles
Expe
nditu
re g
ains
indu
ced
by 1
%
GD
P gr
owth
(%)
GDP growth from agriculture benefits the income of the poor 2-4 times more than
GDP growth from non- agriculture (43 countries)
GDP growth from agriculture benefits the income of the poor 2-4 times more than
GDP growth from non- agriculture (43 countries)
Growth from agriculture is especially effective for poverty reduction
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World Development Report 2008
Agricultural productivity growth has driven poverty reduction in Asia
3.4
3.6
3.8
4
4.2
1959 1963 1967 1971 1975 1979 1983 1987 1991Years
Log
of H
eadc
ount
inde
x (r
ural
are
as)
4
4.2
4.4
4.6
4.8
5
5.2
Log
of a
vera
ge f
arm
out
put
per
acre
Rural Po(left axis)
Yields(right axis)
2.4
2.9
3.4
3.9
4.4
1980 1983 1986 1989 1992 1995 1998 2001Years
Log
of H
eadc
ount
(ru
ral a
reas
)
4.6
4.7
4.8
4.9
5.0
5.1
5.2
5.3
Log
of a
vera
ge f
arm
out
put
per
acre
Rural P0(left axis)
Yields(right axis)
Headcount index and average farm yieldsRural India 1959-1994
Headcount index and average farm yieldsRural China 1980-2001
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World Development Report 2008
Ghana –
a story of poverty reduction
Urban
Rural Forest
Rural Savanah
0
10
20
30
40
50
60
70
80
1991/92 1998/99 2005/06
Pove
rty ra
te (%
)
Rural poverty halved with increased agricultural productivity, higher cocoa prices, reduced food prices, and income diversification
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World Development Report 2008
Important user of natural resources: 80% of fresh water resources40% of land area21+ % of greenhouse gas emissions
Contributions to greenhouse gas emissions
Developing country
agriculture & deforestation
21.4
Developing country
other sources
15.2
Industrialized countries
63.4
3. Managing natural resources and the environment
It can succeed:Sustainable farming systems
and environmental services (ecoagriculture, agroforestry)
It can succeed:Sustainable farming systems
and environmental services(ecoagriculture, agroforestry)
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World Development Report 2008
Agriculture continues to be “taxed”
in ag-based and transforming countries, but at much lower levels
-30
-25
-20
-15
-10
-5
0
5
10
15
Agriculture-based Transforming Urbanized
Aver
age
taxa
tion
%
1980-84 2000-04
Improved opportunities
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World Development Report 2008
Traditional exports
Meat
Horticulture
0
50
100
150
200
250
300
350
1980 1990 2000 2004
Val
ue o
f exp
orts
(198
0=10
0)
0
50
100
150
200
250
1981 1984 1987 1990 1993 1996 1999 2002
Kca
l con
sum
ptio
n/ca
pita
/day
(1
981=
100)
Changing diets ̶ a new agriculture of high value products and non-traditional exports
Developing country exports
Developing country consumption
Improved Opportunities
Meat
Cereals
Horticulture
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World Development Report 2008
Improved Opportunities
Functional Foods: In addition to nutrients, added health benefits!
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World Development Report 2008
Technological innovations: conservation farming, agroforestry, new and improved varieties/breeds,
State of the art remote sensing and monitoring/verification
Information technology in financial, marketing and extension services
Institutional innovations - many at early stagesStronger producer organizations
Market-based, payments for environmental services (PES)
Public-private-CSO partnerships (Value chains, extension, rural finance)
Weather and price risk insurance (Malawi)
Improved opportunities
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World Development Report 2008
Improved Opportunities
Fix degraded lands!!Fix Degraded Lands for Enhanced Productivity
& Environmental Services
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World Development Report 2008
0
10
20
30
40
50
60
70
80
90
Dry
Wei
ght B
iom
ass
Mg
ha-1
Palm Fruit Timber-Pasture
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World Development Report 2008
Opportunities: Expanding sources of income in the rural non-farm economy
Mexico:Sources of income rural population
Bangladesh:Sources of income rural population
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1992 2002
Other
Transfers
NonAgIncome
AgWage
Farm
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1992 2002
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World Development Report 2008
UNTIL RECENTLY Real international commodity prices have been suppressed
by current global trade policies (% of price)
Trade share losses to developing countries due to current global trade policies
(% point loss to developing country trade shares)
Global trade distortions remain pervasive
-3
-4
-4
-5
-7
-12
-15
-21
Sugar
Rice
Processed meat
Wheat
Other grains
Dairy products
Oilseed
Cotton
But Major Challenges
-9
-2
-18
-21
-5
-7
-34
-27
Sugar
Rice
Processed meat
Wheat
Coarse grains
Dairy products
Oilseed
Cotton
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World Development Report 2008
Increasing land and water constraints
-
10
20
30
40
50
60
70
SSA SA EAP MENA ECA LAC
Perc
ent
(%)
% of population in absolute water scarcity
LACECA
MENA
EAP
SA
SSA
0
20
40
60
80
100
120
140
160
180
1961
1967
1973
1979
1985
1991
1997
2003
Inde
x of
cro
plan
d pe
r ag
popu
latio
n (1
961=
100)
Cropland per capita of agricultural population
Challenges
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World Development Report 2008Challenges
Making growth pro-poor
Connecting smallholders to new markets
Improving assets of the poor, especially women
Implementation bottlenecks
Underinvestment in core public goods
Weaknesses in governance (new state roles, coordination, decentralization)
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World Development Report 2008
Agricultural-based countries spend too little on agriculture (and R&D)
Ag GDP/GDP
29
16
10
0
5
10
15
20
25
30
35
Agriculture-based Transforming Urbanized
perc
ent
0
2
4
6
8
10
12
14
Agriculture based Transforming Urbanized
perc
ent
Public Spending on Ag (% of Ag GDP)Spending on Ag R&D (% of Ag GDP)
Challenges
But quality of existing spending often poor
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World Development Report 2008
0
1
2
3
4
5
6
7
1975-79 1980-84 1985-89 1990-94 1995-99 2000-02
Per
cent
of A
g. G
DP
“Misinvestment”
is also pervasive
Subsidies
Public Investment
Challenges
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World Development Report 2008
Improving governance to implement agriculture-for-development agendas
Double weakness of governance as a hurdleState weakest in poor countries
Capacity weak in agriculture vs other sectors
Improving governance at national and global levelsNational and local: cross-sectoral coordination, capacity of MinAg, decentralization
Global--coordinate for complex and inter-related issues (trade restrictions, climate change, animal diseases, biodiversity, standards)
Challenges
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World Development Report 2008
-102030405060708090
100
1990 1992 1994 1996 1998 2000 2002 2004
% p
over
ty in
rur
al a
reas
0
2
4
6
8
10
12
14
% O
DA
to a
gric
ultu
re
Donor support to agriculture also declined despite MDG to halve poverty
% rural poverty
% ODA to Ag
Challenges
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World Development Report 2008
OFFICIAL DEVELOPMENT
ASSISTANCE
(12% in 1990)
PUBLIC SPENDING(Sub-Saharan Africa)
AGRICULTURE
4%
RURAL
75%
AGRICULTURE
4%
Reality vs Action
WORLD POOR
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World Development Report 2008So, what?
Agriculture remains fundamental for development
1.
Accelerate smallholder productivity increases for agricultural growth and food security in Africa
2.
Follow a comprehensive approach to reduce sectoral disparities and poverty in transforming countries of Asia
3.
Enhance sustainability, market opportunities, and environmental services from agriculture
4.
Pursue multiple pathways out of poverty: smallholder farming, labor market, RNFE, migration
5. Improve the quality of governance in agriculture at local, national, and global levels
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World Development Report 2008
WDR recommendations on “hot topics”
Doha must progress – with attention to transitional issues in developing countries
Subsidies can be used – with attention to market development and equity
GMOs have unrealized potential for the poor – with special attention to bio-safety and IPRs
IPRs must be tailored to country and commodity specifics—with attention to humanitarian access
Biofuels will be important – but need trade-offs analyses, more productive and sustainable technologies
Climate change requires urgent attention–both adaptation and mitigation
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World Development Report 2008
An enabling environment for competitive supply chains
Agriculture as a ‘dual function’
sector that both supports growth and provides social safety nets
Alternative instruments of rural social policy that provide agriculture with an improved environment
Political “space”
for reform within the agriculture and water sectors
Address the existing political economies reliance on subsidies and overprotection
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World Development Report 2008
The World Food Price Crisis
Changing food demand (quantity and quality) in China, India, and other countries which are experiencing rapid economic development.Rising energy prices and their impacts on both the costs of agricultural production and the demand of grains for biofuels.Severe weather shocks and impacts on production, weather-related risks, and investment in agricultural production.Speculation in commodity markets
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World Development Report 2008
The World Food Price Crisis continued
The World Bank is doubling its lending for agriculture in Africa over the next year to $800 million, in order to raise supply.
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World Development Report 2008
WB & Gender
“Gender and women’s empowerment is at the core of what we need to do in the field of development, and gender equality is also smart economics,” R. Zoellick.
“Progress in the area of women’s economic empowerment is still far, far too slow. Whether it is the question of employment, opportunity, pay, or access to finance, there is a tremendous amount of work to do to level the playing field for women.”
So ?
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World Development Report 2008
WB & Gender 2
The World Bank Group (WBG) will increase its support to women entrepreneurs through the International Finance Corporation (IFC), which will channel at least US$100 million in credit lines at commercial banks for women entrepreneurs by 2012.By the end of 2010 at least half of all the Bank’s rural projects in Africa will include gender actions, such as equitable land titling programs like the one being implemented in Ethiopia.
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World Development Report 2008
75% of the world’s poor are rural and most are involved in farming.
In the 21st century agriculture remains fundamental for poverty reduction, economic growth and environmental sustainability.
www.worldbank.org/ard , www.worldbank.org/wdr2008
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World Development Report 2008
75% of the world’s poor are rural and most are involved in farming. In the 21st century agriculture remains fundamental for poverty reduction, economic growth and environmental sustainability. www.worldbank.org/ard
www.worldbank.org/wdr2008