Role of Agriculture in Achieving MDG 1 in Asia and the Pacific Region
This paper examines whether agricultural growth through public expenditure, ODA or investment will improve significantly the prospects of achieving MDG 1 of halving poverty in Asia and the Pacific Region. As more than a few countries in this Region recorded impressive economic growth in the early years of the present decade, the case for the widely used poverty threshold of US$1.25 per day (at 2005 PPP) for assessing progress towards MDG1 is not so compelling now. Accordingly, the present assessment uses two poverty thresholds: US$2 per day and US$1.25 per day (both at 2005 PPP). Our analysis, based on country panel data, confirms robustly that increases in public agricultural expenditure, agricultural ODA, agricultural investment, or fertiliser use (as a proxy for technology), accelerate agricultural and GDP growth. Consequently, the headcount and depth of poverty indices are reduced substantially. Our simulation results show that, for halving the headcount index at US$2 per day, Asia and the Pacific region as a whole would need in 2007-13 a 56% increase in annual agricultural ODA, a 28% increase in agricultural expenditure, a 23% increase in fertiliser use or a 24% increase in agricultural investment. Aggregation of the simulation results for various groups reveals that countries in low income group, with a low level of macro governance or institutional quality, or with low ease of doing business would need larger increase in agricultural ODA, expenditure or investment to halve poverty. Although the share of agriculture in GDP has declined, our analysis reinforces the case for channelling a substantially larger flow of resources not just for accelerating growth but also for achieving the more ambitious MDG1. A policy dilemma, however, is the trade-off between institutional quality and resource transfers. National governments and donors must reflect deeply on triggers for institutional reforms and mechanisms that would ensure larger outlays for agriculture and their allocation between rural infrastructure and sustainable technologies.
|Date of creation:||Jan 2011|
|Date of revision:|
|Contact details of provider:|| Postal: 2-1 Rokkodai, Nada, Kobe 657-8501 JAPAN|
Phone: +81-(0)78 803 7036
Fax: +81-(0)78 803 7059
Web page: http://www.rieb.kobe-u.ac.jp/index-e.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Katsushi Imai & Raghav Gaiha & Ganesh Thapa, 2010. "Is the Millennium Development Goal on Poverty Still Achievable? The Role of Institutions, Finance and Openness," Oxford Development Studies, Taylor & Francis Journals, vol. 38(3), pages 309-337.
- Christiaensen,Luc & Demery,Lionel & Kuhl, Jesper, 2010.
"The (Evolving) Role of Agriculture in Poverty Reduction: An Empirical Perspective,"
Working Paper Series
UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).
- Christiaensen, Luc & Demery, Lionel & Kuhl, Jesper, 2011. "The (evolving) role of agriculture in poverty reduction--An empirical perspective," Journal of Development Economics, Elsevier, vol. 96(2), pages 239-254, November.
- Easterly, William, 2009. "How the Millennium Development Goals are Unfair to Africa," World Development, Elsevier, vol. 37(1), pages 26-35, January.
- Angus Deaton, 2010.
"Price indexes, inequality, and the measurement of world poverty,"
1207, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
- Angus Deaton, 2010. "Price Indexes, Inequality, and the Measurement of World Poverty," American Economic Review, American Economic Association, vol. 100(1), pages 5-34, March.
- Ravallion, Martin & Chen, Shaohua & Sangraula, Prem, 2008.
"Dollar a day revisited,"
Policy Research Working Paper Series
4620, The World Bank.
- Chen, Shaohua & Ravallion, Martin, 2008. "China is poorer than we thought, but no less successful in the fight against poverty," Policy Research Working Paper Series 4621, The World Bank.
- repec:pri:rpdevs:presidential%20address%2017january%202010%20all is not listed on IDEAS
- World Bank, 2010. "World Development Indicators 2010," World Bank Publications, The World Bank, number 4373.
- R Gaiha & K Imai & M A Nandhi, 2005. "Millennium Development Goal of Halving Poverty in Asia and the Pacific Region: Progress, Prospects and Priorities," The School of Economics Discussion Paper Series 0507, Economics, The University of Manchester.
When requesting a correction, please mention this item's handle: RePEc:kob:dpaper:dp2011-01. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Office of Promoting Research Collaboration, Research Institute for Economics & Business Administration, Kobe University)
If references are entirely missing, you can add them using this form.