Agriculture has been in and out of fashion over the last half century. In the 1950s and early 1960s, it was seen as secondary to manufacturing industry but by the mid 1960s, concerns over population growth and a world food crisis, and the promise of the miracle seeds of the green revolution, made it central to development. It found itself relegated again in the 1980s, as macro-economic concerns dominated. Since the turn of the Century, however, its stock has once again been rising. This is reflected most notably in the publishing of the World Development Report 2008, entitled ‘Agriculture for Development’, which confirms the importance of agriculture to development and the policy agenda ODI, and many others, have been developing for the past decade.
In 2000 the Millennium Development Goals, eight of them in all, were agreed: the first and arguably most influential being to halve the rates of poverty and hunger seen in 1990 by 2015. How was this to be done? Economic growth was necessary, to be sure, but far from sufficient to deliver on all the aims. Indeed, economic growth had to be made ‘pro-poor’, with growth in sectors and processes that delivered benefits to the poor.
Agriculture, traditionally a major source of additional jobs for the unskilled, looked a good bet. It was equally apparent, however, just how little donors and governments had invested in the sector of late. The share of agricultural expenditure in total government spending, for 44 developing countries, dropped from 11% in 1980 to about 7% in 2002, as discussed in a recent ODI Opinion by Lidia Cabral (Funding agriculture: not 'how much?' but 'what for?').
By the turn of the century, the neglect of agriculture was widely recognised by governments and donors, who became more determined to do more to stimulate agricultural development. At the same time, it was also clear that rural economies were increasingly diverse: not only agriculture, but also the rural non-farm economy, migration and links between urban and rural areas could play key roles in reducing rural poverty. Some important questions needed to be answered:
- How should agricultural development be re-invigorated?
- How can the rural non-farm economy be stimulated?
- How can migration contribute to poverty reduction?
- How can urban-rural links be forged that stimulate the rural economy?
Subsequently, policy-makers have been looking for ways to tackle the agenda. While broad principles for agricultural and rural development can be set out for example, ensure a stable macroeconomy, provide access to markets, information, technology, inputs, and financial services for practical planning and policy-making there is no substitute for looking carefully at particular circumstances. It is clear that proposals need to be tailored to take account of limitations in particular cases. That may mean generating more appropriate technology; building roads and otherwise reducing the costs of getting from farm to market (and back with inputs); making sure that government policy is even-handed, predictable, and works as far as possible with markets; or, promoting institutional innovations to overcome failures in markets that prevent small farmers and business owners from getting credit or, information, or from linking to customers (see, for example, issues of contract farming). The balance between these diverse elements needs to be decided for specific cases.
Policy also needs to take into consideration the very different circumstances of rural economies, depending on geographical differences, including the remoteness of the region, population density, and natural resources.
It is also clear that even in relatively egalitarian rural societies, there is plenty of social differentiation, based on varying access to land, capital, education and skills. For some rural households, intensified small-scale farming is possible. For others, the non-farm economy and migration offer better prospects. And for the least fortunate rural households, lacking assets of all kinds, the key is to find ways to survive without slipping into destitution while creating the conditions by which their children can look forward to better lives. Social protection, both to underpin the livelihoods of the very poor, as well as to mitigate the risks faced by most rural households, is an important part of the policy agenda (for more, see the ODI Briefing Paper - Linking social protection and the productive sectors).
Defining what needs to be done is one thing, getting it done is another
The best thought-through plans of technical specialists need to fit with political systems. They have to be implemented by states with limited capacity, often reduced by the excesses of structural adjustment. Not for nothing, then, that some stress that it is not the ‘what?’, but the ‘how?’ that matters.
The Future Agricultures Consortium, made up of IDS Sussex, SOAS (Wye), and ODI, has been contributing to finding ways to apply general principles to specific cases, mainly Ethiopia, Kenya and Malawi. It has also been active in looking at the possibilities for policy change in different contexts. [See for example, ODI Opinion on funding agriculture, Briefing on ‘Narratives of Agricultural Policy in Africa: What Role for Ministries of Agriculture?’ and Working Paper: ‘Poverty Reduction Strategies and the Rural Productive Sectors: Insights from Malawi, Nicaragua and Vietnam’.
Good policy, then, has to take all of this into account. Given that getting it right first time is unlikely, owing to the complexity of rural systems and our lack of detailed knowledge of them, monitoring, learning from experience and making the necessary adjustments will be necessary.
It is in this context that the World Development Report appears. The main themes of the report - the promise of agriculture for poverty reduction, the diversity of rural economies, and the variety of contexts for agricultural development – very much reflect the current consensus. The Report is a major contribution to setting out the possibilities for appropriate agricultural and rural development policies in differing settings.
The Report is upbeat, making it clear that much can be done. In this sense, it may be swimming with the tide. Agricultural growth rates in the developing world have been relatively high in the last fifteen years, and in many areas, have been accelerating. FAO data suggest average annual growth rates of 1.4%, 3.0% and 3.6% a year for the early 1990s, late 1990s, and early 2000s respectively. Historically, the 3.6% seen most recently is as fast as anything seen over the last 40 years or more. Clearly, farming is on the move again.
Circumstances, however, change. During the 2000s climate change has become an accepted reality, with potential effects on agricultural policy and the achievement of the first Millennium Development Goal, rising oil prices and concerns over access to supplies have made biofuels attractive, rapid growth of the economies of China and India may create new demands for agricultural produce on world markets, while the HIV/AIDS pandemic proceeds and the possible, if uncertain, threat of devastating new diseases affecting humans and livestock has become more evident. Do these imply that new thinking is needed on agricultural and rural development, and if so, what needs revising?
Three things are likely to happen.
- Costs of agricultural production may well rise with energy costs, possible taxes on greenhouse gas emissions, demand for resources from biofuels production, and increased variability in harvests from more uncertain weather.
- Rising population, rapid economic growth in Asia, and biofuels will create new sources of demand and opportunities to export surpluses.
- More variability in agricultural production and possibility of new diseases threats will enhance the value of diversified rural economies.
Otherwise, changing circumstances do not alter the policy agenda for agricultural development: on the contrary, they make it all the more valuable. The World Development Report 2008 is thus most welcome.