Promoting Global Agricultural Growth and Poverty Reduction

Constraints on resources, growth in demand, and an apparent slowdown in agricultural productivity raise concerns that food prices may rise substantially over the period to 2050. One key question is how serious would be the impacts of such higher food prices on the poor. Another is how policy responses, such as increased investment into agricultural productivity or price incentives, might affect these outcomes. This paper uses a global general equilibrium model, projections of global growth and a set of microeconomic household models, to project potential implications for incomes, food production and poverty. Our baseline projections involve rising food prices whose direct effect is to increase poverty even after households have adjusted fully by increasing output and decreasing consumption. Higher agricultural productivity resulting from increased investments in research and development could offset these impacts and contribute to poverty reduction, with some regional differences: in Asia, we find that most of poverty reduction would come from real wage increases, while Latin America would benefit mainly from the reduced food prices. Increasing food self-sufficiency in developing countries by raising import barriers would generally increase poverty and hence reduce food security at the household level.