Inclusive Agricultural and Rural Development in Sub-Saharan

Africa

Chris BarrettCornell University 

 November 16, 2004

USAID BASIS CRSP Policy ConferenceCombating Persistent Poverty in Africa

Washington, DC

1) Huge numbers need help: >500 mn Africans live on $2/day or less … to grow to >610 mn by 2015

2) The aggregate $2/day poverty gap for SSA ~$190 bn/yr or about 62% of gross income (PG ~ 38%) … or leverage through high return investments

3) Overwhelming majority live in rural areas and depend – directly or indirectly – on agriculture

4) Ag productivity stagnated for a generation

Must re-ignite rural farm/non-farm productivity growth!

The Daunting Challenge

Sub-Saharan Africa Per Capita Food Production

90

95

100

105

110

115

120

1960 1970 1980 1990 2000

Per

Cap

ita

Fo

od

Pro

du

ctio

n (

1989

-91=

100)

Data source: FAO

How To Meet This ChallengeContext-specific, multi-dimensional asset

thresholds that separate growth / decline

Climbing out of poverty traps and keeping the non-poor out of poverty traps requires:

- increase productivity of assets (markets/technologies)

- facilitate asset building and protection (cargo/safety nets)

- remove exclusionary mechanisms (finance/social networks)

Start with the familiar, then move to more novel …

Familiar 1: Increasing Asset Productivity

Improve agricultural technologies and uptake:

- renew investment in NARES (incl. universities)

- integrate three methods of agricultural TFP growth:

▪ Traditional GR methods (maize, cassava, etc.)▪ Biotechnology (NERICAs, DRVs, etc.)▪ Agro-ecological methods (SRI, agroforestry, etc.)

- one-off stimuli (starter packs, FFW)

Improve terms of trade for poor

- reduce costs of mkt participation (roads, ICT, contracts)

- level playing field (farmer groups, outgrowers, business skills and support services)

Improve non-farm productivity

- stimulate private sector investment, esp. in post-harvest processing (labor demand, K deepening)

Familiar 2: Facilitate Asset Building

Human capital (labor primary asset of poor):

- Education: key to remunerative non-farm employment and to technology uptake /agricultural intensification

Natural capital (one of two legs for ag growth):

- soil and water conservation (crowding-in investments)

- soil nutrient replenishment (IFs, bulk phosphate, etc.)

- water management (harvesting, small-scale irrigation)

Physical capital;

- minimum scale of non-farm capital (“micro” finance?)

Cargo net strategies for those seemingly trapped in persistent poverty

Novel 1: Safety Nets for Asset Protection

Human capital (labor primary asset of poor):

- Health and nutrition: preventive health care and ensuring adequate nutrition … keys to avoiding falling into long-term poverty traps (Kenya, Madagascar, Zimbabwe)

- Workfare schemes to avoid asset liquidation responses

Livestock:

- animal disease control, restocking projects

Keys: 1) Multidimensional asset protection essential

2) Need to set safety nets at critical asset thresholds

3) Beware trying to do too much with safety nets

Novel 2: Remove Exclusionary Barriers

Financial services (exchange across time):

- In order to make time work for the poor, must be able to borrow, insurance and save (SRI, dairy, tea)

- Micro-finance sometimes promising, but beware (KDA)

Socio-political exclusion:

- public goods access (roads/electricity … argan case)

- racial, gender, religious, ethnic, caste barriers (traders, information, safety nets, occupations, finance):

need to do more than tear down formal barriers …

need to bridge the divides those barriers create(d)

Conclusions and Policy Implications

1) Many familiar: improve productivity and build assets ... But need to fund and prioritize these longstanding prescriptions

2) Poverty traps imply some more novel approaches: safety nets and removing exclusionary institutional mechanisms

3) Need progress on multiple fronts … will require significant resources (financial, human and technical)

… but alternatives are continued deepening persistent poverty ~$190 bn/year and growing

Thank you!