Structural Change and Development Through Agricultural Exports: Performance and Policies

Debates on the role of agriculture in economic development and structural change often rest on over-aggregation, on old and tired assumptions, and on misleadingly rigid notions of distinctions between ‘sectors’. To show the limits of such an approach, this paper focuses on high-value agricultural exports (HVAX): generally knowledge-intense, complex activities intricately twined with a range of other activities, and effectively ‘industrial’. If HVAX can make a significant contribution to easing the balance-of-payments constraint on growth and development, and if they can generate new wage employment opportunities at the same time, then they may be an important focus for policy design. International evidence suggests some striking rates of expansion of a range of high-value export crops, especially in Latin America. Variations in performance highlight the relative underperformance elsewhere (e.g. some South African exports) and suggests scope for policy reform. Closer attention shows that government policies have been central to the patterns of variation in performance across LMICs, although these policies have ranged from the more ‘horizontal’ (e.g. in Peru) to the more ‘vertical’, as in, at times, Brazil and Chile. Reviewing the research literature and drawing on fieldwork in Ethiopia and South Africa, it was possible to highlight the range of constraints that governments and private sector actors face and that need to be addressed if HVAX are to fulfil their potential role in new paths of structural transformation.