The Hunger Report

Lessons Lost from the Green Revolution

“No country has been able to achieve a rapid transition out of poverty without raising productivity in its agricultural sector,” writes Peter Timmer, a scholar at the Center for Global Development, and one could say the same of hunger.³ In spite of the evidence that agriculture plays a crucial role in reducing hunger and poverty, it has received very little attention and resources from donors in recent decades. Indeed, it is as if donors had learned nothing from the Green Revolution.

• Reductions in rural poverty generally correspond to overall reductions in poverty in developing countries. The poorest countries have largely rural economies. Of the people in the world who are chronically hungry, 75 percent live in rural areas and depend on agriculture for their earnings, either directly, as farmers or hired workers, or indirectly in sectors that derive from farming.⁴
• Agriculture fuels economic growith in developing countries. “Cross-country estimates show that economic growth originating in agriculture is at least twice as effective in reducing poverty as economic growth originating outside of agriculture,” explains the World Bank’s 2007 World Development Report.⁵ In Chile, for example, each 1 percent of expansion in agricultural and agro-processing output is estimated to have reduced national poverty between 0.6 and 1.2 percent.⁶
• The agricultural sector provides jobs to people with few skills. Jobs available to people with few skills contribute directly to reducing poverty. This is especially important because there will continue to be many new jobseekers. In 2005, 30 percent of the population in the developing world (41 percent in Africa) was younger than 15.⁷ Agriculture and agricultural support industries have the potential to absorb large numbers of workers compared to other sectors of the economy.
• Increasing agricultural productivity also stimulates job growth in the manufacturing and service sectors. In Asia, most rural households earn half or more of their incomes from non-farm sources, but it is often the agricultural sector that provides the “ladder,” explains Peter Timmer, “from underemployment at farm tasks to regular wage employment in the local economy.”⁸
• Agricultural growth results in increasing numbers of women in the economy, whether their jobs are on or off the farm. The opening up of employment opportunities to women carries with it a range of benefits. For example, research shows that when women control a larger share of family income, household spending on food increases.

Realizing agriculture’s potential to create economic opportunities in rural communities is clearly important to reducing hunger and poverty—yet most donors have been partners in a steady decline of support for agriculture and rural development.⁹ Between 1985 and 2005, agriculture’s share of U.S. Official Development Assistance declined from more than 12 percent to just 3.1 percent.¹⁰ In absolute terms, support for agriculture went from a high of almost $8 billion in 1984 to $3.4 billion in 2004.¹¹

To make matters worse, domestic policies in rich countries have exacerbated the effect of this disinvestment in agriculture and rural development. U.S. and European Union farm policies shower subsidies on domestic producers and encourage production. Until recently, this had the effect of driving down the prices of world commodities and discouraging poor countries from investing in their own agricultural sectors. A 2003 report by the International Food Policy Research Institute estimated that agricultural protectionism and subsidies in industrialized nations cost developing countries about $23 billion in lost annual income.¹²

As long as commodity prices remained low, rich countries argued that it was not a problem for developing countries to neglect their agricultural sector and buy the food they needed on international markets. Reinforcing this view, when the International Monetary Fund and the World Bank set policies on how developing countries could use financial supports, investments in agriculture were not favored. These institutions have since reoriented their focus and now provide more support for agriculture, but it has taken decades for them to begin to make these changes. In the meantime, as the recent hunger crisis has shown, developing countries were left vulnerable.

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³ Peter Timmer (2005), Agriculture and Pro-poor Growth: An Asian Perspective, Center for Global Development.

⁴ Reducing Poverty and Hunger: The Critical Role of Financing Food (2002), United Nations Food and Agriculture Organization.

⁵ World Development Report: Agriculture for Development (2007), World Bank.

⁶ Ibid.

⁷ World Economic and Social Survey (2007), United Nations.

⁸ Timmer, op. cit.

⁹ United Nations Food and Agriculture Organization, op. cit.

¹⁰ Statistical Annex of the 2007 Development Co-operation Report (2007), OECD/DAC.

¹¹ World Bank, op. cit (pp. 41-42). While decline was common to bilateral as well as multilateral assistance, the decline in the latter was more pronounced.

¹² How Much Does It Hurt? The Impact of Agricultural Trade Policies on Developing Countries (2003), International Food Policy Research Institute.