Understanding The Effects Of Agricultural Rd Investments On Poverty And Undernourishment In Sub Saharan Africa A Causal Mediation Approach

This analysis explores the relationship between agricultural R&D investments and rural poverty reduction, and the prevalence of undernourishment in sub-Saharan Africa (SSA). It uses a panel data set of internationally comparable poverty dis-aggregated by urban and rural areas, country level undernourishment, and ASTI data on R&D investments and derived indicators. The study uses agricultural R&D knowledge stocks (KS) to account for the lagged effects of research through depreciation and gestation period of investments, and applies causal mediation analysis to assess the impact of KS on poverty and hunger and measure the relative contribution of KS-induced agricultural productivity growth on those outcomes. Evidence suggests that, while SSA growth in KS has been relatively slow, it helped reduce rural poverty and undernourishment – the percentage point reduction in rural extreme and moderate poverty of a 1% annual increase in KS is 0.218 and 0.146 percentage points per year, respectively. Mediation analysis indicates that a fifth of the KS effect on extreme rural poverty, and a quarter of the KS effect on moderate rural poverty, can be attributed to KS driven gains in agricultural labor productivity. Likewise, KS growth reduces undernourishment – a 1% annual increase in KS leads to a drop of 0.132 percentage points per year in the prevalence of undernourishment, with about 40% of that effect mediated through gains in agricultural land productivity. These results indicate that KS supports poverty and hunger reduction through benefits on-farm and beyond it. They also suggest that there is room for strengthening the role of R&D KS productivity enhancing innovations. Given the current low levels of investments in R&D and resulting KS, increasing its levels will be critical, but that alone is not sufficient. Policy makers will have to rethink the way the innovations from R&D get scaled up and pay attention to the necessary complementary policies and investments that enable a sustainable pathway leading to greater productivity growth and development impacts.

The relative contribution of a sector to poverty reduction is shown to depend on its direct and indirect growth effects as well as its participation effect. The paper assesses how these effects compare between agriculture and non-agriculture by reviewing the literature and by analyzing cross-country national accounts and poverty data from household surveys. Special attention is given to Sub-Saharan Africa. While the direct growth effect of agriculture on poverty reduction is likely to be smaller than that of non-agriculture (though not because of inherently inferior productivity growth), the indirect growth effect of agriculture (through its linkages with nonagriculture) appears substantial and at least as large as the reverse feedback effect. The poor participate much more in growth in the agricultural sector, especially in low-income countries, resulting in much larger poverty reduction impact. Together, these findings support the overall premise that enhancing agricultural productivity is the critical entry-point in designing effective poverty reduction strategies, including in Sub-Saharan Africa. Yet, to maximize the poverty reducing effects, the right agricultural technology and investments must be pursued, underscoring the need for much more country specific analysis of the structure and institutional organization of the rural economy in designing poverty reduction strategies.

This book contributes to the debate about the role of agriculture in poverty reduction by addressing three sets of questions: Does investing in agriculture enhance/harm overall economic growth, and if so, under what conditions? Do poor people tend to participate more/less in growth in agriculture than in growth in other sectors, and if so, when? If a focus on agriculture would tend to yield larger participation by the poor, but slower overall growth, which strategy would tend to have the largest payoff in terms of poverty reduction, and under which conditions?

The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme aims to provide income support to farmers to facilitate timely access to inputs by easing their liquidity needs. This study, based on 1,406 farmers of Uttar Pradesh and using a binary choice model, examines the scheme’s targeting accuracy and the correlates of farmers’ spending patterns. Triple difference with matching estimators are used to identify the differential impact of PM-KISAN on Krishi Vigyan Kendras (farm science centers, or KVKs) beneficiaries. Results show that PM-KISAN reached to one-third of all the farmers in the first three months of its implementation. Moreover, the study finds no selection bias based on social, economic and agricultural characteristics. The scheme has significantly helped those who are relatively more dependent on agriculture and have poor access to credit. Moreover, scheme has significantly stimulated the KVK ’s impact on the adoption of modern cultivars.

Agricultural development is crucial in developing countries, and particularly in the poorest countries where it accounts for large shares of employment and income and whose poverty is due simply to having a large share of the workforce in low-productivity agriculture. Raising productivity in agriculture is critically important for development, as is smoothly moving workers out of agriculture into more productive employment in other sectors. Raising agricultural productivity helps both to raise incomes and to reduce poverty-both by raising the incomes of poor people working in agriculture and by lowering the prices of foods that make up a disproportionately large share of the expenditures of poor people. In small and open economies, the in-crease in profitability of agriculture following improvements in productivity might tend to retain or even attract workers into agriculture. By contrast, at a global level, or at national level when policy focusses on self-sufficiency, improvements in agricultural productivity will free up labor for employment in other sectors. Incomes are generally much higher in non-agricultural work in developing countries-more than double those in agriculture after careful adjustment for key differences. This raises the possibility of a double dividend from structural transformation as workers move into higher-productivity activities. A key question for development policy is whether it is enough to simply evaluate the gains from higher productivity within agriculture, or whether potential benefits from structural change be included as well. This paper examines the arguments on this question. It concludes that these dividends may be substantial-but whether they are or not depends on the source of the initial differences in productivity and on the direction of movement when agricultural productivity rises. If it results from policy barriers such as restrictions on the transfer of farmland or requirements for residence permits in urban areas, there are likely to be substantial welfare gains when labor moves out of agriculture. They may also be substantial if urban wages are artificially high and attract substantial numbers of job-waiters into unemployment. However, these gains may be illusory if the income gaps arise primarily from differences in skills or from reluctance to move created by asset fixity.

The relative contribution of a sector to poverty reduction is shown to depend on its direct and indirect growth effects as well as its participation effect. The paper assesses how these effects compare between agriculture and non-agriculture by reviewing the literature and by analyzing cross-country national accounts and poverty data from household surveys. Special attention is given to Sub-Saharan Africa. While the direct growth effect of agriculture on poverty reduction is likely to be smaller than that of non-agriculture (though not because of inherently inferior productivity growth), the indirect growth effect of agriculture (through its linkages with non-agriculture) appears substantial and at least as large as the reverse feedback effect. The poor participate much more in growth in the agricultural sector, especially in low-income countries, resulting in much larger poverty reduction impact. Together, these findings support the overall premise that enhancing agricultural productivity is the critical entry-point in designing effective poverty reduction strategies, including in Sub-Saharan Africa. Yet, to maximize the poverty reducing effects, the right agricultural technology and investments must be pursued, underscoring the need for much more country specific analysis of the structure and institutional organization of the rural economy in designing poverty reduction strategies.

Updates for many countries have made it possible to estimate hunger in the world with greater accuracy this year. In particular, newly accessible data enabled the revision of the entire series of undernourishment estimates for China back to 2000, resulting in a substantial downward shift of the series of the number of undernourished in the world. Nevertheless, the revision confirms the trend reported in past editions: the number of people affected by hunger globally has been slowly on the rise since 2014. The report also shows that the burden of malnutrition in all its forms continues to be a challenge. There has been some progress for child stunting, low birthweight and exclusive breastfeeding, but at a pace that is still too slow. Childhood overweight is not improving and adult obesity is on the rise in all regions. The report complements the usual assessment of food security and nutrition with projections of what the world may look like in 2030, if trends of the last decade continue. Projections show that the world is not on track to achieve Zero Hunger by 2030 and, despite some progress, most indicators are also not on track to meet global nutrition targets. The food security and nutritional status of the most vulnerable population groups is likely to deteriorate further due to the health and socio economic impacts of the COVID-19 pandemic. The report puts a spotlight on diet quality as a critical link between food security and nutrition. Meeting SDG 2 targets will only be possible if people have enough food to eat and if what they are eating is nutritious and affordable. The report also introduces new analysis of the cost and affordability of healthy diets around the world, by region and in different development contexts. It presents valuations of the health and climate-change costs associated with current food consumption patterns, as well as the potential cost savings if food consumption patterns were to shift towards healthy diets that include sustainability considerations. The report then concludes with a discussion of the policies and strategies to transform food systems to ensure affordable healthy diets, as part of the required efforts to end both hunger and all forms of malnutrition.

This paper looks at the prioritization of agricultural value chains (VCs) for the allocation of R&D resources that maximize development outcomes (poverty, growth, jobs, and diets). Considering that growth in VCs affects those various outcomes differently, as expansion pathways result in the diverse use of production factors and inputs, trade-offs from linkages across sectors, and changes throughout the agri-food system, this analysis uses (i) the RIAPA dynamic computable general equilibrium model to identify which agricultural VCs, when expanded through TFP growth, provide the strongest effects on the development outcomes of interest; (ii) the perpetual inventory model (PIM) to represent the lagged effect of research through knowledge stocks of agricultural R&D investments; and (iii) information on the elasticities of VC agricultural activity TFP with respect to agricultural R&D knowledge stocks, to discuss the VC priority allocations of R&D resources in Senegal. Results indicate that no one VC (crop- or livestock-related) is the most effective at improving all development outcomes. When accounting for policy preferences that attribute relative priority weight to development objectives, results (based on a ranking scale) indicate that R&D investments for maximizing development objectives can be most effective in Senegal’s VCs for traditional export crops (growth, diets, jobs, and to some extent poverty), groundnuts (poverty, diets, and jobs), rice (poverty and jobs), poultry/eggs (diets and jobs), sorghum/millet (poverty and growth), and cattle (diets and growth). Other promising VCs with potential effects at scale if strategically targeted include vegetables (poverty, diets, and jobs), oilseeds (poverty and growth), and fruits (diets and jobs). While these results can inform strategies aimed at improving multiple development outcomes, future modeling needs to focus on deepening the standardization and integration of R&D investments costs into the framework, disentangle the relevance of different types of R&D investments sources, and bring together other factors and complementary agrifood system investment dimensions relevant to sustainable and inclusive agricultural VC growth.

Reviews causes of poverty in rural areas and presents a policy framework for reducing rural poverty, including through land reform, public works programs, access to credit, physical and social infrastructure, subsidies, and transfer of technology. Identifies key elements for drafting a policy to reduce rural poverty.