Agriculture and Pro-Poor Growth: An Asian Perspective

Charles Peter Timmer

Asian Journal of Agriculture and Development, 2008, vol. 5, issue 1, pages 1-28

Abstract: In lieu of abstract (Introduction)--Imagine a region of the world where all food and agricultural products are sourced from international markets, and domestic agricultural sectors have disappeared. This "world without agriculture" is not imaginary. For many of the world's poorest countries, especially in Africa, a future without agriculture is increasingly being urged as the efficient path to development. Mark Rosenzweig, the new Director of Harvard's Center for International Development, asks at the broadest level: "Should Africa do any agriculture at all?" (Harvard Magazine, 2004, p. 57). Adrian Wood, Chief Economist for the Department for International Development (DfID) of the United Kingdom, envisions a "hollowed out" Africa, with most of the population on the coasts where they could more effectively produce manufactured exports (Wood 2002). Many macro economists, convinced of the power of rapid economic growth to lift populations out of poverty, see resources devoted to slow-growing agriculture as wasted. In a world of ample food supplies in world markets (some of it free as food aid) and increasingly open borders for trade, what is the role of agriculture in pro-poor growth? Historically, the answer is clear. No country has been able to sustain a rapid transition out of poverty without raising productivity in its agricultural sector (if it had one to start with - Singapore and Hong Kong are exceptions). This phenomenon involves a successful structural transformation where agriculture, through higher productivity, provides food, labor, and even savings to the process of urbanization and industrialization. A dynamic agriculture raises labor productivity in the rural economy, pulls up wages, and gradually eliminates the worst dimensions of absolute poverty. Somewhat paradoxically, the process also leads to a decline in the relative importance of agriculture to the overall economy, as the industrial and service sectors grow even more rapidly, partly through stimulus from a modernizing agriculture and the migration of rural workers to urban jobs. Despite this historical role of agriculture in economic development, both the academic and donor communities lost interest in the sector, starting in the mid-1980s, mostly because of low prices in world markets for basic agricultural commodities. Low prices - while a boon to poor consumers and a major reason why agricultural growth specifically, and economic growth more generally, was so poor for the general population - made it hard to justify policy support for the agricultural sector or new funding for agricultural projects (World Bank 2004d). Historical lessons are a frail reed in the face of market realities and general equilibrium models that show a sharply declining role for agriculture in economic growth.

JEL-codes: Q11 (search for similar items in EconPapers)
Date: 2008
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Related works:
Working Paper: Agriculture and Pro-Poor Growth: An Asian Perspective (2005)
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