Smallholder agriculture in many developing countries has remained largely self-financed. However, improved productivity for attaining greater food security requires better access to institutional credit. Past efforts to extend institutional credit to smaller farmers has failed for several reasons, including subsidized operation of government-aided credit schemes. Thus, recent efforts to expand credit for smallholder agriculture that rely on innovative credit delivery schemes at market prices have received much policy interest. However, thus far the impacts of these efforts are not fully understood.
Agriculture and Rural Development
Rift Valley Fever, which can infect both humans and animals, has long plagued East Africa. And climate change, in combination with urbanization, population growth, and travel, can increase conditions that are favorable for this disease and many others.
Temperature, humidity, and rainfall will be affected by climate change –and each can influence the way that disease develops and spreads. Mosquitoes, for example, thrive in warm, humid climates. As climate change alters the geography of these conditions, the number and range of mosquitoes will also change, spreading the diseases that they carry, and exposing populations that have never before seen them. But this is not just true for mosquitoes – ticks, midges, and other vectors that carry disease also stand to have greater impact with climate change. The impact will be felt—with increasing intensity– by both humans and animals. Of the nearly 340 diseases that have been identified in humans since 1940, ¾ are zoonotic, passing directly from animal species to humans.
Women are less productive farmers than men in Sub-Saharan Africa. A new evidence-based policy report from the World Bank and the ONE Campaign, Leveling the Field: Improving Opportunities for Women Farmers in Africa, shows just how large these gender gaps are. In Ethiopia, for example, women produce 23% less per hectare than men. While this finding might not be a “big” counter-intuitive idea (or a particularly new one), it’s a costly reality that has big implications for women and their children, households, and national economies.
The policy prescription for Africa’s gender gap has seemed straightforward: help women access the same amounts of productive resources (including farm inputs) as men and they will achieve similar farm yields. Numerous flagship reports and academic papers have made this very argument.
“What I have been trying to remind people of for the past 40 years is that you can’t operate an entire conventional system, whether it’s economics, business or the way we live and surround ourselves, what we eat, without recognizing that there are severe negative externalities that are not being accounted for.”
- Prince Charles, the eldest child and heir apparent of Queen Elizabeth II, the constitutional monarch of the Commonwealth of Nations. Prince Charles is a proponent of organic farming and has sought to raise awareness of environment degradation and its consequences. His 2010 book, Harmony: A New Way of Looking at Our World, which focuses on climate change, architecture, and agriculture, won the Nautilus Book Award.
The recently enacted National Food Security Act, 2013 (NFSA) is being described as a ‘game changer’ to strengthen food and nutritional security in the country. It goes without saying that, be it basic staples (wheat and rice) or other foods (edible oil, pulses, fruits, vegetables, milk and milk products, egg, meat, fish etc), India has been quite successful in ensuring their ample availability to its population. But in addition to food availability, there are two more critical factors in ensuring food security to the citizen’s - access to food and its absorption for better nourishment.
Despite robust economic growth in recent years, one-third of India’s population, i.e. more than 376 million people in 2010 still lived below the poverty line, as per World Bank’s definition of $1.25 a day. Besides, the National Family Health Survey (NFHS-3) of 2005-06 highlighted that amongst children under five years, 20% were acutely and 48% chronically undernourished. The above facts definitely underline the continued relevance for safety net targeting that makes the poor and vulnerable food secure in terms of nutrition, dietary needs and changing food preferences.
When President Barack Obama announced that the United States would cut CO2 emissions from its coal power plants by 30 percent below 2005 levels by 2030, he didn’t just talk about climate change – he was equally forceful about the local benefits that the regulations could bring. He stressed that those regulations would reduce pollutants that contribute to soot and smog by over 25 percent, reductions that could avoid up to 6,600 premature deaths and 150,000 asthma attacks in children; and that the regulations would build jobs, benefit the economy, and be good for the climate.
Demonstrating the value of multiple benefits that result from many policies and projects can provide a compelling economic rationale for action. It can speak to broad constituencies, local and global, and demonstrate the climate-smart nature of good development. A new report prepared by the World Bank in partnership with the ClimateWorks Foundation – Climate Smart Development: Adding up the benefits of actions that help build prosperity, end poverty and combat climate change – sets out to do just that.
Despite Africa’s great diversity of cultures and climates, countries on the continent often speak the same language when it comes to tackling common development challenges. Senegal and Uganda recently did just that, teaming up to exchange best practices to boost agricultural productivity and employment on both sides of the continent.
I witnessed this knowledge exchange firsthand as I accompanied a Ugandan delegation led by Hon. Maria Kiwanuka, Uganda’s minister of finance, planning, and economic development, on its visit to Senegal. Their core mission was to seek out innovative ways to boost economic growth and create job opportunities for the country’s burgeoning youth, a challenge faced by Uganda and Senegal alike. As both countries continue to experience an increase in urbanization and population growth, and currently have economies that are predominantly based on agriculture, one common answer to this rising challenge is the enhancement of agricultural productivity and the development of agricultural value chains.
From time to time, countries experience rapid economic growth without a significant decline in poverty. India’s GDP growth rate accelerated in the 1990s and 2000s, but poverty continued to fall at the same pace as before, about one percentage point a year. Despite 6-7 percent GDP growth, Tanzania and Zambia saw only a mild decline in the poverty rate. In the first decade of the 21st century, Egypt’s GDP grew at 5-7 percent a year, but the proportion of people living on $5 a day—and therefore vulnerable to falling into poverty—stagnated at 85 percent.
In light of this evidence, the World Bank has set as its goals the elimination of extreme poverty and promotion of shared prosperity. While the focus on poverty and distribution as targets is appropriate, the public actions required to achieve these goals are not very different from those required to achieve rapid economic growth. This is not trickle-down economics. Nor does it negate the need for redistributive transfers. Rather, it is due to the fact that economic growth is typically constrained by policies and institutions that have been captured by the non-poor (sometimes called the rich), who have greater political power. Public actions that relax these constraints, therefore, will both accelerate growth and transfer rents from the rich to the poor.
Some examples illustrate the point.