Should India invest more in less-favored areas?:

Developing countries have to allocate limited government resources for rural areas among different investment activities and regions to achieve the twin goals of productivity growth and poverty alleviation. This is particularly important at a time when many countries are facing severe financial constraints. This paper develops a framework and provides empirical evidence on the impact of government investments in technology, irrigation, education and infrastructure on agricultural productivity growth and rural poverty reduction in rural India. The results reveal that government investments in more favored areas played significant roles during the green revolution period. But the marginal returns from additional government investments in these areas have declined in more recent years. It is now the less-favored areas where marginal returns are higher. This result has important policy implications for where government investments should be targeted in order to achieve further productivity growth and rural poverty reductions.Poverty alleviation India., Investments., Government spending policy India., Agricultural development Asia.,

Are returns to public investment lower in less-favored rural areas?: an empirical analysis of India

Developing countries allocate scarce government funds to investments in rural areas to achieve the twin goals of agricultural growth and poverty alleviation. Choices have to be made between different types of investments, especially infrastructure, human capital and agricultural research, and between different types of agricultural regions, e.g., irrigated and high- and low-potential rainfed areas. This paper develops an econometric approach and provides empirical evidence on the impact of government investments in rural India using district-level data. While irrigated areas played a key role in agricultural growth during the Green Revolution era, our results show that it is now the rainfed areas, including many less-favored areas that offer the most growth for an additional unit of investment. Moreover, investments in rainfed areas have a much larger impact on poverty alleviation, making this a win-win development strategy. These results have important policy implications, and challenge conventional thinking that public investments in rural India should always be targeted to irrigated and other high-potential areas.Poverty India., Green Revolution India., Public investment., Agricultural productivity India., Agricultural research Evaluation. ,

Agricultural research and poverty reduction:

International agricultural research has contributed enormously to increasing world food supplies to their current state of plenty. Yet poverty remains a major problem and the challenge for agricultural research now lies in developing strategies that more explicitly address the needs of the poor. This paper, based on the study commissioned by the Technical Advisory Committee (TAC) of the CGIAR system, addresses this issue. Based on an analysis of the links between agricultural research and poverty alleviation in different types of countries and rural regions, Peter Hazell and Lawrence Haddad identify six key priorities for a pro-poor agricultural research agenda and discuss strategies for achieving each of these goals with the least trade-off in national agricultural growth. (Excerpted from Forward by Per Pinstrup-Andersen and Emil Javier)agricultural research, poverty, food supply,

Bioenergy and agriculture: promises and challenges

Peter Hazell.Biofuels, Agricultural research, Development, Poor Developing countries,

Sustainable agricultural development strategies in fragile lands:

Current trends in demography, agricultural production and rural environment in the developing countries suggest that so-called "marginal lands" must play a larger and probably growing role in food supply and economic development for the foreseeable future. To fulfill this critical role, public policy towards these lands needs to be revised. A key policy focus should be to strengthen incentives for local land users to not only maintain, but to improve the natural resource base for food and fiber supply. Such "land-improving investments" are needed to reduce production and subsistence risks and permit more intensive use without degradation. Under population and market pressure, one can expect an endogenous process of intensification, through land improvements, tenurial and institutional changes and "re-ordering" of the landscape. But this process is not automatic. Factors influencing the pace and scale of land transformation include: farmer knowledge of degradation of the degrading resource; incentives for long-term investment; capacity to mobilize resources for land investment; level of economic returns to such investment; and factors affecting the formation and function of local groups to help mobilize resources and coordinate landscape-level change. Current policies often work to constrain, rather than support, this process. New research is needed to support policy change for "marginal" lands.Land use Economic aspects., Investments.,

Transforming the rural Asian economy

Developing Asia as a whole has taken remarkable strides since the food crises of the 1960s. Improvements in food security, poverty reduction, and per capita income initiated by the Green Revolution have been substantial and lasting. Although life has improved for most rural Asians, about 670 million still live in poverty, and they must tolerate lower levels of health, education, and general well-being than their urban counterparts. To complete the economic transformation in rural Asia requires further growth, but growth that is more equitable and environmentally sustainable than it has been in the past. Meeting this challenge will warrant more efficient application of the lessons already learned about agricultural growth, public-sector investment, rural poverty reduction, and natural resource protection. The authors argue that six emerging challenges will also need special attention: (1) Making growth pro-poor; (2) Managing the legacy of the economic crisis; (3) Managing globalization; (4) Revitalizing agricultural research and technology dissemination; (5) Managing land and water scarcity and degradation; and (6) Building good governance and social capital.

Strategies for stimulating poverty-alleviating growth in the rural nonfarm economy in developing countries:

"The rural nonfarm economy (RNFE) accounts for roughly 25 percent of full-time rural employment and 35-40 percent of rural incomes across the developing world. This diverse collection of seasonal trading, household-based and large-scale agroprocessing, manufacturing and service activities plays a crucial role in sustaining rural populations, in servicing a growing and modern agriculture, and in supplying local consumer goods and services. In areas where landlessness prevails, rural nonfarm activity offers important economic alternatives for the rural poor....Three key groups currently intervene in the rural nonfarm economy: large private enterprises, non-profit promotional agencies and governments. Large modern corporations take investment, procurement and marketing decisions that powerfully shape opportunities in the rural nonfarm economy throughout much of the Third World...." The authors put forth three basic principles for policy makers who want to ensure equitable growth of the RNFE : (1) Identify key engines of regional growth; (2) Focus on subsector-specific supply chains; and (3) Build flexible institutional coalitions. They conclude that "a prosperous rural nonfarm economy can contribute to both aggregate economic growth and improved welfare of the rural poor." from Executive Summary.Poverty alleviation Developing countries., Rural population., Employment, Non-agricultural Rural areas., Manufacturing industries., Service industries.,

New approaches to crop yield insurance in developing countries:

Natural disasters can be extremely disruptive to farmers and to others whose incomes depend on a successful crop. Society can gain from more efficient sharing of crop and natural disaster risks. However, the costs associated with traditional agricultural risk programs have historically exceeded the gains from improved risk sharing. This paper explores government intervention in agricultural risk markets and discusses new approaches to risk sharing with limited government involvement. In particular, we build the case for introducing negotiable state-contingent contracts settled on area crop yield estimates or locally appropriate weather indices. These instruments could replace traditional crop insurance at a lower cost to government while meeting the risk management needs of a wider clientele.Crop yields., Insurance, Agricultural Crops., Developing countries.,