30 percent of gross domestic product (GDP) and employs 65
percent of the workforce.6 Frequently, the industries and sectors
linked to farm production account for another 30 percent or
more of GDP.7
In general, countries with rapidly increasing food production are more effective in reducing poverty.8 The World Bank’s
2007 World Development Report notes, “Cross-country estimates
show that GDP growth originating in agriculture is at least
twice as effective in reducing poverty as GDP growth originating outside of agriculture.”9 One of the main reasons for this is
that agriculture in developing countries tends to be labor intensive. Agriculture and agricultural support industries have the
potential to absorb relatively large amounts of labor compared
to other sectors of the economy.
For example, Chile’s expansion of its agricultural GDP
can be largely credited to a labor-intensive agricultural export
boom over the past two decades. Each 1 percent of expansion
in agricultural and agro-processing output is estimated to have
reduced national poverty by between 0.6 and 1.2 percent.10 Poor
people in rural areas benefited from the expansion indirectly,
through their employment by larger-scale farmers and processing firms. Many of these jobs were taken by women. Similarly, a
recent study in Rwanda found that agricultural growth contributed 50 percent more to poverty reduction than growth in other
sectors, and that a 1 percent annual growth rate in staple food
production translates into a 3 percent reduction in poverty.11
Steadily increasing agricultural productivity over the past
30 years has succeeded in keeping food prices generally low
and stable. In effect, low food prices mean higher incomes for
poor people, who spend the bulk of their disposable income on
food. This is true even for farmers in poor countries. Increasing
agricultural productivity also stimulates job growth in the
manufacturing and service sectors. Thus, improving agricultural
productivity helps address both hunger and poverty: not only
does it increase the amount of food available, it stimulates
economic growth by creating jobs, both on- and off-farm, which
raise people’s incomes and enable them to purchase food.
But the task of continuing to raise food production in
developing countries will be complicated in the coming years by
the harmful effects of global warming. These include warmer
and drier conditions, shorter growing seasons, and changes in
cropping patterns. Poor countries will pay the heaviest cost in
the next few decades even though they had the least to do with
causing climate change. But the worst predicted outcomes are
by no means inevitable. There is time to avert disaster scenarios
by limiting greenhouse gas emissions (particularly by developed
countries, who are the biggest contributors), and by investing in
research and technology to help developing countries adapt to
changing weather patterns and conditions.
Job Growth: On and Off the Farm
Job creation is a major concern both in terms of economic growth and social stability. Jobs available to people with
few skills contribute directly to reducing poverty. Compared to other sectors of the economy, agriculture has the potential
to absorb large numbers of workers. This is especially important because there will continue to be many new jobseekers—in 2005, 30 percent of the population in the developing world (41 percent in Africa) was younger than 15.12
In Asia, most rural households earn half or more of their incomes from non-farm sources, but it is often the agricultural
sector that provides the “ladder,” as Peter Timmer describes, “from underemployment at farm tasks to regular wage employment in the local economy.”13
The opening up of employment opportunities to women, in particular,
Women’s Participation in Agriculture
leads to a range of benefits. The
benefits are especially important
Sub-Saharan Africa
in nutrition, since research shows
South Asia
that more income in the hands of
women leads directly to additional
East Asia & Pacific
spending on food.
Middle East & North Africa
Throughout the 1990s, almost
Europe & Central Asia
80 percent of economically active
Latin America & Caribbean
women were involved in agriculture.
This is projected to decline but re0
20
40
60
80
100
main above 70 percent into the next
Percentage of all women (rural and urban)
decade.14 The result of agricultural
Agricultural wage employment
Agricultural self employment
growth is increasing numbers of
Nonagricultural wage employment
Nonagricultural self employment
women in the economy, whether
their jobs are on or off the farm.
Source: World Bank, 2008.
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