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Today’s agriculture offers new opportunities, suggests pathways out ...

Agriculture is perhaps the most distorted sector, protected by high tariffs, large government subsidies, price ...

By David Bigman, Guide

New technologies have made production of key agricultural products. In many developed countries no longer labor intensive while in other products seasonal workers from developing countries enabled their producers in the developed countries to continue their production. This widens the productivity and income gap between developed and least developed countries. In the past two decades, agricultural production and trade have become increasingly more complex.

Both the Green and Gene Revolutions have had far reaching achievements that transformed the structure of agricultural ...

By David Bigman
Guide, dgCommunity on Food Security

(This highlight is part of a series ‘The Changing Agricultural Sector” by David Bigman) 
The agricultural sector has a vital role in the life and food security of the majority of the population in the developing countries. Although the recent report of the UNFPA (The State of World Population 2007: Unleashing the Potential of Urban Growth) estimates that by the end of this decade more than half of the world’s population will live in cities and towns, the rural population will still constitute the majority of the population in the developing countries at least until the middle of this century. In Africa and Asia the urban population is expected to double between 2000 and 2030. In the coming decade, however, more than half of the African population and more than three quarters of the African poor will still live in rural areas and depend on agriculture for their livelihood.
The focus of the World Bank's upcoming 2008 World Development Report on agriculture is not surprising given the continued central role of this sector in the developing countries in general and in the least developed countries (LDCs) in particular. The need to focus on agriculture is obvious for two fundamental reasons:
First, the large share of the agricultural sector in the national income and employment in most developing countries gives the agricultural sector a predominant and unique role in raising the standard of living and reducing poverty.  At the same time, its strong pro-poor growth linkage to other sectors and to employment gives the agricultural sector a pivotal role in raising farmers' incomes and increasing food security in these countries in general and among the rural population in particular.
Second, the methods and organization of agricultural production and trade are still going through far reaching changes in all countries. They include changes in production technologies, in the organization of the entire supply chain, in agricultural trade policies – despite the seeming failure of the Doha Round, in the impact of the Gene Revolution in production, and in the impact of environmental factor in determining the countries’ comparative advantage in trade. These changes that take place at accelerating pace affect this sector to the extent that we must re-valuate costs and benefits and re-evaluate also of some of the well established axioms that are traditionally associated with the function of the agricultural sector and its effects on growth, poverty and income inequality in the developing countries.

Photo: If the supply chain works well with fair returns on investment for everyone, the first link -- the farmer -- earns enough money to feed his or her family and to re-invest. Employment created by the many businesses in the supply chain enables still more people to live a decent life. Hunger declines and the quality of rural life improves.
Credit: FAO/F. Mattioli

As agriculture production for biofuel increases, the debate between “food versus fuel” continues to heat up.  Defenders of new biofuel crops such as jatropha, the scientific name for Central America’s piñon plant, claim that the crop will not displace traditional food crops and will give farmers an economic advantage.  Foes counter that biofuel corporations are eclipsing small farmers in India and Brazil by cultivating massive plantations of non-edible crops.   A new report, the OECD-FAO Agricultural Outlook 2007-2016, provides insight into the long-term impact on food security of the biofuel production in the agriculture sector.  Structural changes in agriculture, specifically for increased feedstock for biofuel production, will keep agriculture prices at historic high levels for the next decade, says the report.  These higher commodity prices will raise costs for developing countries that import food as well as the urban poor.  The report also states that, while higher feedstock prices caused by increased bio-fuel production will benefit feedstock producers, it also means extra costs and lower incomes for farmers who need the feedstock to provide animal feed.

PHOTO: Plantations of jatropha are cultivated in Brazil and India.