Growth and Poverty Mailing List Archive

[Michael & Merle Lipton <<address removed>>]

Dear all,

> I have been following several of the Group discussion fora with interest. 
> There are many thoughtful, useful contributions. But I am depressed by the 
> fact that few contributors are following up on what seems to me to be the 
> main point, and the central lesson of history for initial mass poverty 
> reduction. It is that without sustained initial, employment-intensive, 
> smallholder-based yield growth in agriculture, probably focusing initially 
> on food staples - call it Plan A - the remaining heartlands of world 
> poverty will not reduce it much. Hence the issue for development actions 
> in general, and for UK aid policy in particular - if these aim to cut 
> poverty in its heartlands - is what policies can implement Plan A. It is 
> not what alternatives there might be in la-la-land.

> First, the central fact, and an important proviso.
> Fact: over 90% of the dollar-poor are in sub-Saharan Africa and S and E 
> Asia, and over 70% are rural. Though almost all of them obtain income from 
> many sources, much the most important is agriculture, and non-farm growth 
> is seldom robust (or povery reducing) until dermand from agriculture 
> grows. Ravallion's projection is that over half the world's poor will be 
> rural until 2035.
Proviso: Non-farm expansion is increasingly the main way to reduce, and 
fairly soon to remove, extreme dollar poverty where there have already been 
10-20 years of 3%+ agricultural yield growth (usually starting with food 
staples) that is smallholder-based and employment-intensive. Demand from 
small farmers and labourers, fuelled by agricultural progress, in turn sets 
off rapid non-farm growth. This has happened in large parts of East Asia 
and some parts of South Asia.

First, however, affordable demand for the labour of the rural poor 
(accompanying, of course, measures to raise their educational, skill and 
health levels) are needed. The rural poor have multi-faceted livelihoods, 
but, almost always, only yield expansion in agriculture - overwhelmingly 
the main component of those livelihoods - can provide such extra 
livelihoods initially where mass rural poverty prevails.

So: how can Plan A be implemented? Most of the remaining poverty heartlands 
have little water control, especially in sub-Saharan Africa, and have so 
far gained little from the Green Revolution. Aid to agriculture, and 
(except in parts of Asia, and including within the CG syastem) finance of 
public-purpose research aimed directly to improve crop productivity and 
robustness, have collapsed. Staples yield growth in the developing world 
has fallen from about 3%/year in the early 1980s to around 1%/year recently.

So it will not be easy to revive agricultural growth in the poverty 
heartlands, Yet, given agriculture's role in employment-income and 
consumption for most of the world's dollar-poor, there is no hope of 
meeting the MDG to halve poverty in 1990-2015 unless that happens. One 
requirement - of course not the only one - is that aid to small-farm and 
employment-intensive agriculture revives sharply. (All aid to agriculture 
has fallen by over 60% in absolute terms since the late 1980s, folloowing a 
previous sharpl fall from the late 1970s; the falls are mostly due to 
agriculture's plummeting priority within sector-specific aid, not to the 
rise of structural adjustment assistance).  A UK lead, combined with the 
renewed concern of other donors on this matter, could be crucial to the 
revival. Obviously, how we do it is at least as important as that we do it. 
It is right that these fora focus on the 'how'. Aid has to be is directed 
to the right targets to benefit the poor (which include producing items in 
sufficient demand, local or foreign); and aid has to be reasonably well 
based in the will of recipient societies and governments, e.g. as expressed 
in the (currently rather sector-free) PRSPs, so that extra aid claws in, 
rather than drives out, domestic effort.But let's not be so concerned to 
discuss and differ on the difficulties, that we lose sight of the central 
point - the case for a DfiD focus on Plan A. This means dated targets for 
reviving the proportion of aid from the UK,  and if attainable for EU and 
the World Bank, supporting - in a broad sense - smallholder and 
employment-intensive farming.

Otherwise - without extra demand for the labour services of the rural poor, 
which in the initial stages, and in the remaining recalcitrant poverty 
heartlands, can come affordably only from small-scale agriculture - there 
is little hope of big poverty reductions in the parts of the world that 
have NOT, so far, had either poverty reduction or substantial progress in 
farm income or in yields of food staples.
The rising worker-to-dependent ratios in the poverty heartlands in 
2000-2040 can be a wonderful opportunity for a farm-income-led attack on 
poverty, increasingly feeding into off-farm income diversification, as 
happened in East Asia in 1970-90. Or, without sustained yield growth, the 
opportunity can turn into an employment and poverty debacle.

Which will happen? It depends in large part on trade policies in OECD, on 
domestic responses in the poverty heartland nations, and on the priorities 
within farm science. But aid plays a big role, especially since aid policy 
affects all these other things too. What should the UK do in this context? 
How should it seek to influence EU and the World Bank? How do we get to 
targets for aid to agriculture and farm research over the next 5-10 years, 
and for steering that aid to the needs of the poorest: policies that 
prioritise small farms and employment income, water control and better 
seeds for more robust farming, and poor people's access to bigger shares of 
farmland (including via orderly land reforms) and farm water?

It would be useful if we could re-inject an emphasis on these central 
points into the fascinating but, inevitably with many participants and 
fora, perhaps not yet sufficiently focused discussions.

Best wishes for our work!

Michael Lipton

P.S. Here is a list of issues I have sent to Sarah Hartwell, for the 
interview to which her Select Committee on DfID agricultural policy has 
asked me. (Sorry for some overlap with the above.)
(a) 55-60% of the world's dollar-poor depend on agriculture for their 
livelihood.
(b) Historically, almost all initial mass poverty reduction - most recently 
and strikingly in large parts of Asia in 1965-90 -began with big, 
employment-intensive productivity gains on small farms.
(c) Non-farm growth, while crucial to poverty reduction later, first needs 
demand from small farms and so has hardly ever created enough affordable 
workplaces to initiate early  mass poverty reduction.
(d) A unique opportunity for accelerated poverty reduction - yet also a 
great risk of an unemployment surge, deepening poverty - is created by the 
rapidly rising worker/dependent ratios (due to sharp post-1980 fertility 
falls) in Asia and Africa, and only small-farm growth strategies are likely 
to seize the opportunity.
(e) Yet since the 1980s there have been sharp (and non-coincidental) falls in
---yield growth in main food staples in developing counties;
---aid to agriculture;
---public-purpose research into raising productivity of main staples; and
---the rate and spread of dollar-poverty reduction.
(f) These setbacks are despite big falls in price bias against agriculture 
in many developing countries - and are partly due to OECD policies on farm 
trade, aid, and science.
(g) The forms of aid required to improve the impact of agriculture on 
poverty reduction are fairly   familiar, but little-discussed. Central 
issues include:
--possible need for specific commitments to raise volume, and share, of UK 
aid reaching small-scale farming, given the above facts;
--the use of aid to address the water crisis, especially since absence of 
water control is the main obstacle to progress on small farms in Africa;
--how to steer more aid to agricultural (especially seed) research that 
favours production and employment of the poor;
--how to increase UK aid's impact in improving the poverty focus, and in 
raising the amount, of support for agriculture via multilateral agencies;
--prospects for aid in support of well-conceived programmes to 
redistribute, where feasible consensually, farmland and water to the poor;
--how to use aid or other means to improve the prospects that globalisation 
benefits, rather than harms, small and remote farms, given the increasing 
role of supermarkets, horticultural multinationals, and food and labour 
grades and standards; and
--how to ensure that aid complements, rather than drives out, domestic 
private and public investment in agriculture.