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Institutions and economic policies for pro-poor agricultural growth

Author

Listed:
  • Dorward, Andrew
  • Fan, Shenggen
  • Kydd, Jonathan
  • Lofgren, Hans
  • Morrison, Jamie
  • Poulton, Colin
  • Rao, Neetha
  • Smith, Laurence
  • Tchale, Hardwick
  • Thorat, Sukhadeo
  • Urey, Ian
  • Wobst, Peter

Abstract

"This paper draws together findings from different elements of a research project examining critical components of pro-poor agricultural growth and of policies that can promote such growth in poor rural economies in South Asia and Sub-Saharan Africa. Agricultural growth, a critical driver in poverty reducing growth in many poor agrarian economies in the past, faces many difficulties in today's poor rural areas in South Asia and Sub-Saharan Africa. Some of these difficulties are endogenous to these areas while others result from broader processes of global change. Active state interventions in 'kick starting' markets in 20th century green revolutions suggest that another major difficulty may be current policies which emphasize the benefits of liberalization and state withdrawal but fail to address critical institutional constraints to market and economic development in poor rural areas. This broad hypothesis was tested in an analysis of the returns (in agricultural growth and poverty reduction) to different government spending in India over the last forty years. The results reject the alternate hypothesis underlying much current policy, that fertilizer and credit subsidies, for example, depressed agricultural growth and poverty reduction in the early stages of agricultural transformation. The results show initially high but then declining impacts from fertilizer subsidies; high benefits from investment in roads, education and agricultural R&D during all periods and varying benefits from credit subsidies over four decades; low impacts from power subsidies; and intermediate impacts from irrigation investments. These findings demand a fundamental reassessment of policies espousing state withdrawal from markets in poor agrarian economies. Given widespread state failure in many poor agrarian economies today, particularly in Africa, new thinking is urgently needed to find alternative ways of 'kick starting' markets ways which reduce rent seeking opportunities, promote rather than crowd-out private sector investment, and allow the state to withdraw as economic growth proceeds. Authors' Abstract

Suggested Citation

  • Dorward, Andrew & Fan, Shenggen & Kydd, Jonathan & Lofgren, Hans & Morrison, Jamie & Poulton, Colin & Rao, Neetha & Smith, Laurence & Tchale, Hardwick & Thorat, Sukhadeo & Urey, Ian & Wobst, Peter, 2004. "Institutions and economic policies for pro-poor agricultural growth," DSGD discussion papers 15, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:dsgddp:15
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    Cited by:

    1. Hazell, Peter & Poulton, Colin & Wiggins, Steve & Dorward, Andrew, 2010. "The Future of Small Farms: Trajectories and Policy Priorities," World Development, Elsevier, vol. 38(10), pages 1349-1361, October.
    2. Sefriadi, Hasnah & Villano, Renato & Fleming, Euan & Patrick, Ian, 2013. "Production constraints and their causes in the cacao Industry in West Sumatra: from the farmers’ perspective," International Journal of Agricultural Management, Institute of Agricultural Management;International Farm Management Association, vol. 3(1), October.
    3. Ulimwengu, John & Sanyal, Prabuddha, 2011. "Using a spatial growth model to provide evidence of agricultural spillovers between countries in the NEPAD CAADP Framework:," IFPRI discussion papers 1069, International Food Policy Research Institute (IFPRI).
    4. Thapa, Ganesh & Gaiha, Raghav Gaiha, 1. "Food Security in Asia and the Pacific: The Role of Smallholders," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 9(1).
    5. Haggblade, Steven, 2007. "Returns to Investment in Agriculture," Food Security Collaborative Policy Briefs 54625, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    6. Diao, Xinshen & Hazell, Peter & Resnick, Danielle & Thurlow, James, 2006. "The role of agriculture in development: implications for Sub-Saharan Africa," DSGD discussion papers 29, International Food Policy Research Institute (IFPRI).
    7. Abate, Gashaw Tadesse & Rashid, Shahidur & Borzaga, Carlos & Getnet, Kindie, 2015. "Rural finance and agricultural technology adoption in Ethiopia: Does institutional design matter?:," IFPRI discussion papers 1422, International Food Policy Research Institute (IFPRI).
    8. repec:bla:devpol:v:35:y:2017:i::p:o214-o233 is not listed on IDEAS
    9. Wanjala, Bernadette, 2016. "Can the big push approach end rural poverty in Africa? : Insights from Sauri millennium village in Kenya," Other publications TiSEM 5a686b22-6749-4e9e-8bf4-4, Tilburg University, School of Economics and Management.
    10. Christian Otchia, 2014. "Agricultural Modernization, Structural Change and Pro-poor Growth: Policy Options for the Democratic Republic of Congo," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 3(1), pages 1-43, December.
    11. Schiesari, Carolina & Mockshell, Jonathan & Zeller, Manfred, 2016. "Farm input subsidy program in Malawi: the rationale behind the policy," MPRA Paper 81409, University Library of Munich, Germany, revised 2017.
    12. Shiferaw, Bekele & Obare, Gideon & Muricho, Geoffrey, 2006. "Rural institutions and producer organizations in imperfect markets: experiences from producer marketing groups in semi-arid eastern Kenya," CAPRi working papers 60, International Food Policy Research Institute (IFPRI).
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    14. Birner, Regina & Resnick, Danielle, 2010. "The Political Economy of Policies for Smallholder Agriculture," World Development, Elsevier, vol. 38(10), pages 1442-1452, October.
    15. Byerlee, Derek & Spielman, David J. & Alemu, Dawit & Gautam, Madhur, 2007. "Policies to promote cereal intensification in Ethiopia: A review of evidence and experience," IFPRI discussion papers 707, International Food Policy Research Institute (IFPRI).
    16. Bolwig, Simon & Gibbon, Peter & Jones, Sam, 2009. "The Economics of Smallholder Organic Contract Farming in Tropical Africa," World Development, Elsevier, vol. 37(6), pages 1094-1104, June.
    17. Spielman, David J. & Byerlee, Derek & Alemu, Dawit & Kelemework, Dawit, 2010. "Policies to promote cereal intensification in Ethiopia: The search for appropriate public and private roles," Food Policy, Elsevier, vol. 35(3), pages 185-194, June.
    18. Meliko, Majory O. & Phinea, K. Chauke & Oni, Stephen A., 2010. "The Efficiency of Small-Scale Agriculture in Limpopo Province of South Africa," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96801, African Association of Agricultural Economists (AAAE);Agricultural Economics Association of South Africa (AEASA).

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    Keywords

    Agricultural growth ; Poverty; Rural ; South Asia Rural poor ; Africa; Sub-Saharan ; Agrarian economies ; Globalization ; Green Revolution ; Poverty alleviation ; Government spending policy India ;

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