WASHINGTON, 19 October: The World Bank Friday called for agriculture to take center stage in development policies and pledged to boost its lending to the sector after allowing it to decline in 1980s and 1990s.
The Banks just released World Development Report, titled “Agriculture for Development” said that for the poorest people an improvement in a countrys gross domestic product that is agriculture-driven is four times more effective in reducing poverty than is GDP growth originating in other sectors.
– It will be an illusion that they (the poor) will simply be absorbed by growth taking place outside agriculture, World Bank Chief Economist Francois Bourguignon said, citing the persistence of rural poverty in the flourishing economies of China and India.
– Poverty is overwhelmingly rural and will be for decades to come, he added.
He warned that the UN Millennium Development Goal of halving the percentage of people living on less than a dollar a day by 2015 “will only be met in poor countries if much greater attention is paid to agriculture as an instrument for development.
The report crystallizes an emerging consensus among wealthy countries, philanthropists and African governments: Increased public investment in scientific research, rural roads, irrigation, credit, fertilizer and seeds – the basics of an agricultural economy – is crucial to helping Africas poor farmers grow more sorghum (durra), corn, millet (hirse), cassava and rice on their miniature plots (jordlodder).
Foreign aid for agriculture has plunged as support for global health and primary education has surged. The fight against AIDS and other diseases is keeping millions of people alive, and rising elementary school attendance is lifting literacy rates.
But most poor Africans make their living in agriculture and need to grow more to feed themselves and earn their way out of destitution, many analysts say.
– We are not saying health and education are not important, said Alain de Janvry, one of two authors of the report, who has taught agricultural economics at the University of California, Berkeley, for 40 years.
– But if you look at Africa, there is no alternative to agriculture as a source of growth noted he.
Launching the World Banks latest World Development Report, “Agriculture for Development”, the Banks president, Robert Zoellick, said:
– A dynamic agriculture for development agenda can benefit the estimated 900 million rural people in the developing world who live on less than one US dollar (5,30 DKR) a day, most of whom are engaged in agriculture.
– We need to give agriculture more prominence. At the global level, countries must deliver on vital reforms such as cutting subsidies and opening market, he concluded.
The report says the agricultural and rural sectors have suffered from neglect and underinvestment over the past 20 years. While 75 percent of the worlds poor live in rural areas, a mere 4 percent of official development assistance goes to agriculture in developing countries.
In Sub-Saharan Africa, a region heavily reliant on agriculture for overall growth, public spending for farming is also only 4 percent of total government spending and the sector is still taxed at relatively high levels.
The World Bank Group is advocating a new “agriculture for development” agenda. For its part, the Bank intends to continue increasing its support for agriculture and rural development, following a decline in lending in the 1980s and 1990s.
Commitments in Financial year 2007 reached 3,1 billion US dollar, marking an increase for the fourth straight year.
Detailed findings
The report warns global food supplies are under pressure from expanding demand for food, feed, and biofuels; the rising price of energy; and increasing land and water scarcity; as well as the effects of climate change. This in turn is contributing to uncertainty about future food prices.
Agriculture consumes 85 percent of the worlds utilized water and the sector contributes to deforestation, land degradation, and pollution. The report recommends measures to achieve more sustainable production systems and outlines incentives to protect the environment.
The report says in agriculture-based countries – home to 417 million rural people, 170 million of whom live on less than one dollar a day – the agricultural sector is essential to overall growth, poverty reduction, and food security. Most of these countries are in Sub-Saharan Africa, where the sector employs 65 percent of the labor force and generates 32 percent of GDP growth.
For Sub-Saharan Africas development, the report highlights issues to be urgently confronted: too little public spending on agriculture; donor support for emergency food aid with insufficient attention to income-raising investments; rich-country trade barriers and subsidies for key commodities such as cotton and oilseeds; and the under-recognized potential of millions of women who play a dominant role in farming.
In transforming countries such as China, India, and Morocco, agriculture contributes on average only 7 percent to GDP growth, but lagging rural incomes are a major source of political tensions.
Dynamism in the rural and agricultural sectors is needed to narrow the rural-urban income gap and reduce rural poverty for 600 million poor while avoiding falling into subsidy and protection traps that will stymie growth and tax poor consumers.
In urbanized countries, mainly in Latin America and the Caribbean and Eastern Europe and Central Asia, agriculture contributes just 5 percent of GDP growth on average.
However, rural areas are still home to 45 percent of the poor, and agribusiness and food services account for as much as one third of GDP. The broad goal is to link smallholders to modern food markets and provide remunerative jobs in rural areas.
The report says rich countries need to reform policies which harm the poor. For example, it is vital that the United States reduces cotton subsidies which depress prices for African smallholders.
In the emerging area of biofuels, the problem is both restrictive tariffs and heavy subsidies in rich countries, which drive up food prices and limit export opportunities for efficient developing country producers.
The report also asserts that industrialized countries that were the major contributors to global warming urgently need to do more to help poor farmers adapt their production systems to climate change.
Kilde: www.worldbank.org
