Farm sector takes centre stage

20/10/2007 | Anthony Rowley

World Development Report stresses primacy of agriculture

Agriculture is going to have to get much more attention if economic growth and social stability is to be preserved in poor and emerging economies, the World Bank warned in the World Development Report published yesterday. The report called for the agricultural sector to be placed “at the centre of the development agenda” from now on.

Not only in Sub-Saharan Africa, but also in key emerging markets such as China and India, the agriculture sector must act as a cushion against rising unemployment and growing income disparities that threaten growth and stability, the report suggested. “It’s an illusion to believe that [the poor] will be absorbed by development outside of agriculture” – to which most attention, and domestic and foreign investment, is directed at present – World Bank chief economist Francois Bourguignon argued at a briefing on the latest WDR.

The report, which is focused on agriculture for the first time, says it has suffered from “neglect and underinvestment over the past 20 years”, even as public and private investment in emerging economies has expanded dramatically. “While 75% of the world’s poor live in rural areas, a mere 4% of official development assistance (ODA) goes to agriculture in developing countries.”

World Bank president Robert Zoellick said that a dynamic “agriculture for development” agenda could benefit, in particular, “900 million people in the developing world who live on less than $1 a day, most of whom are engaged in agriculture”.

“We need to give agriculture more prominence across the board”, he suggested, by cutting subsides, opening markets and giving farmers more say in setting the development agenda. In key emerging markets such as China and India, agriculture contributes on average only 7% to GDP growth, and lagging rural incomes are becoming a “major source of political tensions” and a threat to social stability, the WDR says.

“Dynamism in the rural and agricultural sectors is needed to narrow the rural-urban income gap and reduce rural poverty for 600 million poor people, while avoiding subsidy and protection traps that will stymie growth.”

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No government should engage in scaremongering.

László Andor, European Commissioner responsible for employment