New Directions for Agriculture in Reducing Poverty

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The Importance of Agriculture



*I have been stimulated by the responses to this forum so far. Dr.
Maxwell's excellent article presents a comprehensive vision of the
narrative on agriculture. Yet, there are some other important aspects to
consider:
 
1.  The concept of agriculture is changing.  For so long agriculture has
been associated with primary production. Then later it began to include
the value added chain, the idea of from farmer to fork. Then the
Europeans brought the idea of the multifunctionality of agriculture and
though this was in many ways a guise to maintain subsidy, it was an
important contribution of how we need to see agriculture. In Latin
America the New Rurality broadened the idea of agriculture to include
health, education and well-being.  So when agriculture is examined from
this multidimensional perspective, each of the seven reasons in
Maxwell's article take on a different nuance and in some cases their
meanings are transformed. For example, sustainability from this more
holistic perspective of agriculture means much more than sustained
growth and environmental management - it implies social networks and new
business networks where environmental concerns can be good business.
Changes in the supply chain, would not only look at food but other fiber
products and how they can be integrally managed from a systems
perspective.
 
In our work in Latin America and the Caribbean we have been promoting a
territorial approach to rural development. This demands that we look at
the combined resources within a given geographical space (at different
scales i.e. local, municipal, state, national...). These resources
include natural resources for ag production and non ag economic
activities, social networks, cultural patrimony and history, image and
perceptions of consumers, inter-territorial relationships,
infrastructure, human talents, skills and capabilities.  Looking at the
present use and possible potential of these resources can provide
information on how to improve competitiveness.  In this sense the idea
of territorial competitiveness (LEADER +) is relevant and we have been
trying to develop some models to look at profitability not just in its
private sense, but in the sense of social profitability.  The concept of
public goods also becomes important as we try to quantify social
profitability as a mechanism to invest in the regeneration of public
goods.  Water pricing is a good example.
 
2.  Multiple source income families.  Most rural households derive
incomes from multiple sources.  The focus on the importance of
remittances bears witness. Lipton has argued since the eighties of the
urban bias in development and this continues on a conceptual basis when
rural is almost exclusively associated with agriculture. The
diversification of income sources has been a contributing factor to the
increasing complexity of agriculture's relationship to the wider
economy. How to approach poverty reduction strategies that look at
agriculture in its complexity is the challenge we face. No longer can we
take for granted that small holders have "excess labor"; this labor has
many opportunity costs. The Brazilians in their agricultural technology
research seek technologies for small and medium producers that minimize
labor effort.  This has led to technologies like new plows that minimize
the effort and time of small farmers, improving yields and taking the
factor of time as a factor of production.
 
3. Agriculture's true contribution to the economy.  We recently
completed a study using social accounting matrices to demonstrate that
agriculture's contribution to GDP is not just primary production, but
also the value added transformation into food and beverage products,
restaurant sales and employment that has a much more far-reaching
contribution to the economy.  In calculating Ag GDP this way, ag's
contribution can go from 11% to 32% (Costa Rica) or from 0.7% to 8.1% in
the United States.  The way that statistics are presented generates a
bias that must be factored into how agriculture is valued by society and
by economists. When agriculture is conceived of in its complexity and
its contribution truly valued, then we can see that there is an enormous
shortfall in investment.
 
more later on interventions and DfID's possible roles
 
Kind regards,
 
 
Mark Meassick
Inter-American Institute for Cooperation on Agriculture
<mailto:<address removed>> 
*these views do not necessarily represent the official position of the
Inter-American Institute for Cooperation on Agriculture.



Please visit dfid-agriculture-consultation.nri.org.