The Role of Agriculture in Poverty Reduction : An Empirical Perspective

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.

Bibliographic Details

Main Authors:	Kuhl, Jesper, Christiaensen, Luc, Demery, Lionel
Language:	English en_US
Published:	World Bank, Washington, DC 2006-09
Subjects:	ACCESS TO HEALTH SERVICES, AGRICULTURAL DEVELOPMENT, AGRICULTURAL GROWTH, AGRICULTURAL INCOMES, AGRICULTURAL OUTPUT, AGRICULTURAL PRODUCTION, AGRICULTURAL PRODUCTIVITY, AGRICULTURAL PRODUCTIVITY GROWTH, AGRICULTURAL PRODUCTS, AGRICULTURAL SECTOR, AGRICULTURAL SECTORS, AGRICULTURAL TECHNOLOGY, ANNUAL GROWTH, ANNUAL GROWTH RATE, AVERAGE INCOMES, CHANGES IN POVERTY, CLASSICAL ECONOMISTS, CLIMATE CHANGE, COMMERCIAL FARMERS, COUNTRY REGRESSIONS, COUNTRY SPECIFIC, CROSS COUNTRY, CROSS COUNTRY DATA, DEMAND FOR FOOD, DEVELOPING COUNTRIES, DEVELOPING WORLD, DEVELOPMENT ECONOMICS, DUAL ECONOMY, DYNAMIC PANEL, EAST EUROPE, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC SYSTEMS, ECONOMICS LITERATURE, EMPIRICAL APPLICATION, EMPIRICAL EVIDENCE, ERROR TERM, ESTIMATION TECHNIQUES, EXTENSION, FARM EMPLOYMENT, FARM INCOME, FARM SECTOR, FIXED PRICES, FOOD CROPS, FOOD MARKETS, FOOD PRICES, GDP, GDP PER CAPITA, GROSS DOMESTIC PRODUCT, GROWTH EFFECT, GROWTH ELASTICITY, GROWTH PERFORMANCE, GROWTH POTENTIAL, GROWTH PROCESS, GROWTH RATE, GROWTH RATES, HEADCOUNT POVERTY, HOUSEHOLD INCOME, HOUSEHOLD SURVEYS, HUMAN CAPITAL, IMPACT ON POVERTY, IMPACT ON POVERTY REDUCTION, INCOME, INCOME CHANGE, INCOME GAINS, INCOME GROWTH, INCOME INEQUALITY, INDUSTRIAL SECTOR, INDUSTRIALIZATION, INDUSTRIALIZED COUNTRIES, INEQUALITY, IRRIGATION, LAGGED DEPENDENT, LAGGED LEVELS, LAGGED VALUES, LAND PRODUCTIVITY, LATIN AMERICAN, LONG RUN, LOW-INCOME COUNTRIES, MARGINAL PRODUCTS, MICRO DATA, MULTIPLIER EFFECTS, MULTIPLIERS, NATIONAL ACCOUNTS, NEW TECHNOLOGIES, POLICY MAKERS, POLICY REFORMS, POLICY RESEARCH, POOR, POOR COUNTRIES, POOR PEOPLE, POOR SMALLHOLDER, POVERTY DATA, POVERTY REDUCING, POVERTY REDUCTION, POVERTY REDUCTION IMPACT, POVERTY REDUCTION STRATEGIES, PRODUCTION FUNCTION, PRODUCTION PROCESS, PRODUCTIVITY INCREASES, REAL PRODUCT WAGE, REDUCING POVERTY, RELATIVE CONTRIBUTION, RELATIVE ROLE, RURAL, RURAL AREAS, RURAL ECONOMY, RURAL HEADCOUNT, RURAL HOUSEHOLDS, RURAL POPULATION, RURAL SECTOR, SECTORAL COMPOSITION, SERIAL CORRELATION, SMALLHOLDER AGRICULTURE, SMALLHOLDER FARMERS, SOIL DEGRADATION, SOILS, STANDARD DEVIATION, STRUCTURAL CHANGE, STRUCTURAL TRANSFORMATION, SUB-SAHARAN AFRICA, SUBSISTENCE, SUSTAINABLE ECONOMIC DEVELOPMENT, TOTAL FACTOR PRODUCTIVITY, TOTAL FACTOR PRODUCTIVITY GROWTH, TOTAL OUTPUT, TOTAL POVERTY, UNEQUAL DISTRIBUTION, URBAN AREAS, WAGE EARNERS, WAGES,
Online Access:	http://documents.worldbank.org/curated/en/2006/09/7071126/role-agriculture-poverty-reduction-empirical-perspective https://hdl.handle.net/10986/9306
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