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Promoting pro-poor growth: Agriculture
2006
Organisation for Economic Co-operation and Development (OECD)


Executive summary

Agriculture’s central role in stimulating pro-poor growth

In most poor countries, agriculture is a major employer and source of national income and export earnings. Growth in agriculture tends to be pro-poor – it harnesses poor people’s key assets of land and labour, and creates a vibrant economy in rural areas where the majority of poor people live. Agriculture connects economic growth and the rural poor, increasing their productivity and incomes. The importance of agriculture for poverty reduction, however, goes well beyond its direct impact on rural incomes. Agricultural growth, particularly through increased agricultural sector productivity, also reduces poverty by lowering and stabilising food prices; improving employment for poor rural people; increasing demand for consumer goods and services, and stimulating growth in the nonfarm economy.

A positive process of economic transformation and diversification of both livelihoods and national economies is the key to sustained poverty reduction. But it is agricultural growth that enables poor countries, poor regions and ultimately poor households to take the first steps in this process.

A more challenging context for agriculture growth

Today, rural households face challenges much different than those faced by the “green revolution” producers who achieved sustained gains in agriculture productivity only a few decades ago. Over the past 20 years there has been a substantial decline in public sector support for agriculture and many producers have lost access to key inputs and services. While public sector provision of these services was not very efficient, it often provided the sole linkages to markets for poor rural producers. Today, such links are tenuous and complicated by much greater integration of the global economy. Smallholder producers now compete in markets that are much more demanding in terms of quality and food safety, and more concentrated and integrated than in the past. OECD agricultural subsidies further distort many of these same markets.

Economic integration is accompanied by other challenges that further weaken the socioeconomic position of the rural poor. In parts of the world, especially in sub-Saharan Africa, rural areas are hard hit by the HIV/AIDS pandemic, which is disrupting the transfer of knowledge, destroying traditional land allocation systems, and dramatically changing the demographic composition of many rural communities. Climate change with growing population density is increasing pressure on an already fragile natural resource base that is the mainstay of rural livelihoods. Conflict conditions, many of which result from, or are provoked by poverty, are further eroding the livelihood systems and resilience of rural poor women and men.

The urgency of a new agenda

Attention to agriculture in terms of policy commitments and investment levels has declined in both international donor and developing country policies and programmes, despite the demonstrated high rates of return and the reductions in poverty that come from such investments. Yet achieving the internationally agreed poverty reduction targets will depend on establishing higher rates of economic growth, which equates to growth in agricultural sector productivity for the majority of countries where these targets are relevant. And a more robust agriculture sector will need to be framed within a new agenda that not only matches today’s rural and global realities but engages and enables poor households to generate sustainable livelihoods.

Principles of the new agenda

This report identifies four principles of engagement at the core of the new agenda. These principles are essential in defining how the new agriculture agenda should be promoted, and in how the investment and policy options proposed under the new agenda should be articulated. These principles are:

  • Adapt approaches to diverse contexts.
  • Build institutions and empower stakeholders.
  • Support pro-poor international actions.
  • Foster country-led partnerships.

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