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Food crisis report
More than food on the table: Agriculture's true contribution to the economy
January 2004
Inter-American Institute for Cooperation on Agriculture


Background

Agriculture is more than agricultural production and food: today, all nations regard it as a strategic asset. However, the importance attached to it in political circles and among decision makers varies. In some countries, its political importance is on the decline and support for it is limited; in others, especially the most developed nations, increasing amounts of resources are being allocated to it in the form of subsidies and external aids.1

The ministers of agriculture of the Americas have expressed concern at the way in which agriculture’s value is underestimated. Given the challenges posed by the new environment, agriculture must be viewed differently if it is to be repositioned at policy-making level.2 In recent decades, recognition of the interdependence between agriculture and industry has been growing. The production systems linked to agriculture -agroindustry, for example- have become more intricate and complex, and more sophisticated and dynamic food distribution networks are needed.

However, agriculture’s performance and its contribution to our countries’ economic development has traditionally been undervalued, since it is measured using information about harvests and the sale of raw materials, mainly crops and livestock. As a result, the backward and forward linkages with agroindustry, the services and trade sectors, and, in general, the rest of the economy, are undervalued. The value added generated by these linkages throughout the economy does not appear in the basic agricultural statistics of most countries.

The methods traditionally used to measure agriculture’s contribution also overlook its role in meeting the growing demand for environmental goods and services from urban centers. As an economic bridge between rural and urban areas, agriculture provides food, work and natural resource services to urban dwellers.

To properly measure agriculture’s performance and contribution, account must be taken of its effects on the distribution of income among rural and urban households, wage earners and owners. This is key to evaluating its impact on poverty alleviation strategies and, in particular, on the livelihoods of rural dwellers.3


  1. In 2002 alone, the developed countries invested US$350 billion in government subsidies to support their farmers. (www.oecd.org)
  2. The Interagency Group on Rural Development took up this concern. At the meeting in Havana (2002), IICA offered to conduct the necessary analyses.
  3. In a globalized world, a country’s food security can only be assured if rural livelihoods are strengthened. It is also a key condition for achieving the Millennium Development Goals set for 2015 for health and nutrition.

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