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High value products or staple crops? A discussion on development strategies for Southern Africa

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  • Nin Pratt, Alejandro
  • Diao, Xinshen

Abstract

Unexploited agricultural potential and regional trade opportunities together with the presence of South Africa and other middle-income countries, offer Southern Africa the unique opportunity to foster agricultural growth through regional linkages. In this study a global general equilibrium model that focuses on Southern Africa is used to analyze the implications that these specific characteristics of the regional economy have on growth choices of low-income countries. Three groups of growth scenarios are define to analyze the role of South Africa as a possible engine of growth, the role of own growth engines in low-income countries, and growth linkages between middle- and low-income countries. Results of the simulation scenarios show that larger benefits to low-income countries can be expected from grain and livestock productivity growth as a result of high multiplier effects and the large share of these activities in GDP. Productivity growth in grain and livestock results in higher GDP growth, higher agricultural output and food consumption, and lower agricultural imports than with productivity growth in non-traditional export crops. Unlike other regions where growth in grain production is likely constrained by domestic demand, growing middle-income economies in Southern Africa can provide additional demand to grains and livestock, slowing down the decline in grain prices in the region.

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Bibliographic Info

Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2006 Annual meeting, July 23-26, Long Beach, CA with number 21094.

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Date of creation: 2006
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Handle: RePEc:ags:aaea06:21094

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Keywords: Community/Rural/Urban Development;

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  1. Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank.
  2. Adelman, Irma, 1984. "Beyond export-led growth," World Development, Elsevier, vol. 12(9), pages 937-949, September.
  3. Adelman, Irma, 1984. "Beyond export-led growth," CUDARE Working Paper Series 309, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  4. Vivek B. Arora & Athanasios Vamvakidis, 2005. "The Implications of South African Economic Growth for the Rest of Africa," IMF Working Papers 05/58, International Monetary Fund.
  5. Diao, Xinshen & Yanoma, Yukitsugu, 2003. "Exploring regional dynamics in Sub-Saharan African agriculture," DSGD discussion papers 2, International Food Policy Research Institute (IFPRI).
  6. Reimer, Jeff & Thomas Hertel, 2004. "International Cross Section Estimates of Demand for Use in the GTAP Model," GTAP Technical Papers 1647, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  7. Imre Fert– & L. J. Hubbard, 2003. "Revealed Comparative Advantage and Competitiveness in Hungarian Agri-Food Sectors," The World Economy, Wiley Blackwell, vol. 26(2), pages 247-259, 02.
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