Jul 7, 2012

Agriculture and development

Tyler Cowen mentions in this podcast (about his book An Economist gets lunch) the importance of research in agriculture in developing countries. 

Research on agriculture matters because it can lead to improved productivity, which is essential to counteract the high volatility in food prices - which has happened often recently leading to social instability

This paper published in the new number of Economic Systems (March 2102) provides an excellent review of the literature on agriculture and development. The discussion on the Green Revolution possibilities, especially for Africa, is very good as well as the discussion on the new approaches in rural development. The article also talks about the role of the government in the provision of public goods in agriculture (such as funding research and building rural infrastructure), it also emphasises the role of the private sector and possible public-private collaborations. The review of the literature is quite complete since the early developments in mid-twnetieth century to date (e. g. the work of Nobel Laureate Theodore Schultz)
From the abstract:
It discusses in turn the role played by agriculture in the development process and the interactions between agriculture and other economic sectors; the determinants of the Green Revolution and discuss the foundations of agricultural growth; issues of income diversification by farmers; approaches to rural development; and finally issues of international trade policy and food security which are at the root of the crisis in agricultural commodity volatility in the past few years.
From page 45:
In poor countries, agricultural growth has a huge capacity to reduce poverty. Due to this potential, improving productivity in the agricultural sector in developing countries is critical and an essential step to reach the Millennium Development Goals. Some 75 percent of today‘s poor living in rural areas would benefit massively from higher incomes in agriculture. Moreover, agriculture also has the potential to generate economic growth in developing economies that depend to a large extent on this sector, for example in many Sub-Saharan African countries. But this presupposes major increases in productivity that depend on a range of factors—new technologies and their adoption; farm size and access to land; overcoming environmental challenges—for which we do not have ―silver bullet‖ solutions. The most difficult challenges are institutional and are related to market failures, missing markets and property rights.
See the full draft here (Jan 2012). 

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