Agriculture can help improve world: bank

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Published: November 1, 2007

The World Bank has called on national governments to invest in agriculture as the most effective way to develop economies and reduce poverty.

In its first annual report dedicated to agriculture in a quarter century, the international development lender and policy creator said such an initiative would require a combination of state investment, private sector development and strong farm leadership.

“At stake are the livelihoods of 900 million rural poor who also deserve to share the benefits of a sustainable and inclusive globalization,” said World Bank president and former U.S. trade representative Robert Zoellick in the forward to the report.

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The organization, which typically offers conservative, market-based advice to underdeveloped countries, said that while government support, money and policies will be needed, this is not a call for old-fashioned market-distorting policies.

“The problem cannot be sustainably addressed through agricultural protection that raises the price of food, because a large number of poor people are net food buyers, or through subsidies,” the report said. “Addressing income disparities in transforming countries requires a comprehensive approach that pursues multiple pathways out of poverty – shifting to high-value agriculture, decentralizing non-farm economic activity to rural areas and providing assistance to help move people out of agriculture.”

It called for stronger private property rights and an end to subsidies that encourage production that degrades soil or water resources.

The World Bank report received an immediate embrace from the president of the United Nations International Fund for Agricultural Development (IFAD), which collaborated in its preparation.

“It provides a compelling case for higher investment in agriculture,” said a statement issued by IFAD president Lennart Bage during an Oct. 23 visit to Ottawa.

“The report puts agriculture back where it belongs, right at the centre of the fight against poverty.”

In an interview, he said investment to strengthen the small-farmer sector in developing countries pays back between two and four times the development benefit that investment in other sectors creates.

As well, he said, the World Bank report should focus attention on the issue, encouraging governments to take it seriously.

“This would unleash agriculture as the single most important engine of growth and poverty reduction,” Bage said.

The bank’s World Development Report said that 75 percent of the world’s one billion poorest people live in rural areas in developing countries and depend on agriculture and related activities for their living.

The report said rural development in many countries will require a “productivity revolution in smallholder farming.”

The alternative, it said, is a continued and growing disparity between urban prosperity and deep rural poverty through Asia, the Middle East and North Africa that is a “major source of social and political tensions.”

Bage added much of Latin America to that list.

The report also called for increased leadership from farm leaders and support for farm organizations.

“Collective action by producer organizations can reduce transaction costs in markets, achieve some market power and increase representation in national and international policy forums,” it said.

As well, it said increased developing country investment in agricultural research and development will be an important part of the proposed rural renaissance.

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