Why is agriculture so important to reducing poverty?

Abstract

Over the last few years, there has been both talk about and action regarding the long-term neglect of agriculture in development. An agricultural revival has occurred, with African governments committing themselves to spending at least 10 per cent of their budgets on agriculture. Donors such as the World Bank and many bilateral organizations are refocusing on the sector. This is partly due to the prevalence of rural poverty in sub-Saharan Africa as well as in South Asia. Despite this, the debate on the appropriate role of agriculture in economic growth lingers on among academics and policymakers. In particular, agriculture’s contribution to broader economic growth is questioned. Should growth be driven by agriculture or by something else? Recent empirical studies and earlier theoretical work demonstrate that growth in the agricultural sector has contributed more to poverty reduction than growth in non-agricultural sectors. This paper discusses this issue and highlights some of the preconditions for the achievement of this outcome.