Download - New dynamics of poverty
Institutional Learning and Change Initiative of the CGIAR 1
The new dynamics of poverty and the role of science in
poverty alleviation
Javier M. EkboirILAC coordinator
April 2011
Institutional Learning and Change Initiative of the CGIAR 2
Content of the presentation
What is poverty alleviation?
The dynamics of poverty today
The role of research in poverty alleviation
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What is poverty alleviation?
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Measuring poverty alleviation
Poverty alleviation has two benchmarks:
Food security can be improved by higher yields of staples, lower food prices or higher incomes
Affording a healthy life can only be achieved with higher incomes
Achieving food security and affording a healthy life
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Where can these additional incomes come from?
People living with 2.5 US dollars/day are still poor but have more food security
Extreme poverty is now defined as living with less than 1.25 US dollars/day
If yields of staples increased threefold, small farmers would still be poor
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Where can these additional incomes come from? (2)
This is being increasingly recognized in the field of development
Higher yields of staples can reduce labor requirements and allow farmers to undertake new income generating activities
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Then
Does poverty alleviation mean increasing food security or affording a healthy life?
Can agricultural research help achieve food security?
Can agricultural research help poor households to afford a healthy life?
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The dynamics of poverty today
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Six trends are shaping the dynamics of poverty today
Globalization
Urbanization
Migration and remittances
Increasing number of poor live in middle income countries
Faster rate of technical change in agriculture
Foreign investment in agriculture
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Globalization is changing the markets for staples
Local and global markets for staples became more integrated after 1982
Profitability of small farms fell as well
Price of staples in areas that were close to import markets fell
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Globalization is changing the markets for staples
(2)Contrary to most expert forecasts, production of staples in small farms did not disappear
The price elasticity of food production in small farms is low and decreasing
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Globalization is opening high value (HV) opportunities
International markets for HV products expanded
Easier access to technical and commercial information
Easier access to equipment and inputs
But only a few farmers could take advantage of the new opportunities
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Urbanization
More than half of the world population now lives in urban areas
The “supermarket revolution”
Consumption patterns are changing
Domestic markets for agricultural products (staples and HV) are expanding
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How do small farmers participate in HV agricultural markets?
• HV export markets are mostly supplied by large farmers
• HV domestic markets are mostly supplied by larger, better endowed small farmers
• Few small farmers can survive in these markets
• Many small farmers participate as laborers
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Technical change and HV markets
Most of the technologies used in HV markets were developed by private firms, ARIs and NGOs
International and public research institutes contributed little to the process
Some international research institutes participated in the development of niche markets
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Technical change and HV markets (2)
But their effect on poverty was limited
Are these institutes still relevant?
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Migration and remittances
Local and distant labor markets also became more integrated
In 2006, 150 million international migrants sent home US$ 300 billion
Easier travel and improved financial services meant that people from rural areas could work in distant locations and send remittances back home
The average remittance in LA was 300 US$/month
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How are remittances used? (IFAD, IADB)
• Education and health (i.e., human capital that can be used in off-farm employment)
• Housing
• Only a small proportion goes to productive activities, including agriculture
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What is the role of agriculture in diversified rural livelihood
strategies?In some areas (LA), the proportion of income rural households derive from agriculture is less than 30%
In other areas (Africa, China) it is still more than 70%
Agriculture serves as a retirement strategy
But the trend is clear: the importance of agriculture as a source of income is falling for most poor rural households
Rural households are increasingly consumers and less producers
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Where do the poor live?
• In 1990 two thirds of the poor lived in low income countries
• In 2007 three quarters of the poor lived in middle income countries (especially China, India, Indonesia, Nigeria and Pakistan)
• The other quarter lives mostly in Africa
• The change occurred because several large countries grew very fast, increasing income disparities
• These countries are supposed to be able to take care of their poor
• Some are building their research capabilities but mostly outside agriculture
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The role of research in poverty alleviation
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What is an innovation?
Anything new successfully introduced into an economic or social process
The vast majority of researchers do not innovate
They invent
Inventions only become innovations when they are used in social or economic processes
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The importance of innovation capabilities
Not all people can innovate
There is a limit to how much they can be strengthened
Innovation and entrepreneurial capabilities are strongly determined by innate factors
They are weakly related to education
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Poor households are heterogeneous
Households with innovation capabilities who are operating commercially
Households with innovation capabilities who are not operating commercially
Households without innovation capabilities
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Households with innovation capabilities who are operating
commercially (5%)
They are integrated into innovation or market networks
Most of their technologies are imported by private firms, NGOs or farmer associations
Private standards are increasingly important and influence technical change
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Households with innovation capabilities who are operating
commercially (5%) (2)
International and public research institutes are marginal suppliers of scientific information for these markets
Public institutes should develop capabilities to research local issues that cannot be solved with foreign information
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Households with innovation capabilities who are not
operating commercially (5 to 10%)
Their most pressing need is not production techniques
They need social and human capital to integrate into innovation and commercial networks
Also need access to efficient output and input markets
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Households with innovation capabilities who are not
operating commercially (5 to 10%) (2)
Innovation brokers and NGOs are needed to help these farmers integrate into more dynamic markets
Because there are no universal recipes on how to do it, new social science research is needed
Researchers should help to understand how these households can be identified and how they can be integrated into innovation and commercial networks
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Households without entrepreneurial capabilities
(80 to 90%)These households have diversified livelihood strategies
Improved seeds and management techniques can increase food security
They need skills to make a living not as farmers
Researchers can provide new techniques for orphan crops, help to manage on-farm conservation, increase food security
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Recent trends in the organization of science
Research teams are increasingly inter-disciplinary, inter-institutional, short-lived
Research is increasingly conducted by networks of actors, often including non-researchers
Research is often not conducted in research laboratories, but in private firms and fields
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ConclusionsPoor rural households are becoming more consumers and less producers (importance of global food supply rising)
Increased productivity of staples will increase food security
But will have a limited impact on poverty
High value markets will reduce poverty mainly by creating employment in rural areas and mobilizing the rural economy
The major impact on poverty will come from migration and remittances
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Conclusions (2)Agricultural development requires new types of research
With new partnerships
International and public research institutes are not prepared for this type of research
Changing international and public research institutes is very difficult
Agricultural and research policies have to be targeted to specific groups of rural actors
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Thanks