Jomo Kwame Sundaram :
Over three quarters of the extreme poor in the world live in the countryside. Reducing rural poverty will therefore require significantly higher rural incomes. Since most rural incomes are related to agriculture, raising agricultural productivity can help raise rural incomes all round.
In the 1960s and 1970s, many governments invested a great deal to increase agricultural, especially food production. In the second half of the 20th century, agricultural productivity rose rapidly. However, intense price competition meant that productive resource suppliers and consumers benefitted more from productivity gains.
Lower food prices thus helped reduce poverty while transnational agri-business has profited greatly from changes in agricultural production, credit, processing and marketing chains.
In the last decade, food prices went up again as production rose more slowly than before, partly due to greater land and other resource constraints, reduced public investments as well as increased demand for food crops, including for bio-fuels and more animal feed.
Supply and demand
Food price increases from a decade ago have been associated not only with significant supply and demand changes, but also with biofuel mandates and subsidies as well as greater commodity speculative investments. But with food prices receding again more recently, food would become cheaper, reducing farmer incomes and the incentive to produce more food.
Poor countries are doubly handicapped by their limited tax capacities, due to low tax rates on low incomes. While agricultural taxation is generally proportional to land cultivated or output, much government rural or agricultural spending has benefited plantations and larger farmers more than smaller smallholders, tenants or sharecroppers. Nevertheless, the poor may have benefited in so far as greater output lifts all boats. While there is little excessive taxation of small farmers these days, there are also modest urban-to-rural resource transfers through the fiscal system or other transfer arrangements.
However, with a few notable exceptions, most government spending on agriculture is not biased to the poor.
Government spending in rural areas and on agriculture has generally been motivated by political considerations, especially the desire to secure rural political support, not least by raising agricultural output, productivity and incomes.
Instead, such public expenditure tends to benefit the relatively better-off in agriculture. This is generally true with improved rural infrastructure or social services, including health and schooling, as well as agricultural support in the form of subsidized fertilizer or other agricultural inputs – usually distributed according to the amount of land owned.
Closing food security gaps
The Green Revolution of the 1960s and 1970s mainly involved wheat, rice and maize. Closing the productivity, output and income gaps of sub-Saharan Africa (SSA) with the rest of the world will require appropriate measures addressing the many disincentives to greater food and other investments in the continent needed to improve livelihoods.
Undoubtedly, increased food production can enhance food security, reduce hunger and improve nutrition in SSA for the farmers themselves. But food security has been undermined by trade liberalization and export promotion in the last three decades.
The recent purchase or long-term lease by foreign interests of choice African agricultural land to produce food for export is especially problematic.
Experience since the mid-20th century reminds us that increasing food production alone will not be enough to eliminate poverty and hunger in the world. There has long been enough food in the world to feed everyone, but the hungry typically do not have the incomes or other means to secure access to sufficient food to adequately feed themselves.
As many hundreds of millions are so deprived, and likely to remain so for a long time to come, especially with the likelihood of a prolonged economic slowdown, with high levels of underemployment and unemployment, there is no other way to overcome poverty and hunger except with some basic social provisioning for all, by establishing what is called a basic ‘social protection floor’.
In this connection, FAO seeks to accelerate the transition ‘from protection to production’, and thus ensure sustainable means to eliminate hunger and poverty while ensuring resilience in the longer term.
With the growing consensus, momentum and commitment to eradicate world poverty and hunger by 2030 enshrined in the post-2015 Sustainable Development Goals, it will be necessary to deploy all the necessary instruments as soon as possible.
The Addis Ababa Action Agenda emerging from the third Financing for Development Conference in July is supposed to ensure adequate financial and other means of implementation for this purpose.
At Addis, the Rome-based U.N. agencies presented an affordable and feasible way to quickly eliminate hunger and poverty through social protection, while increasing the earned incomes of the poor with adequate pro-poor investments during 2016-2030 costing about 0.3 percent of current global income. Clearly, together, we can – and must – eliminate hunger and poverty by 2030.
(Jomo Kwame Sundaram is the Coordinator for Economic and Social Development at the Food and Agriculture Organization and received the 2007 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought).
