Key to Poverty Reduction is in Agriculture

A far-ranging October 2009 paper from Abt Associates argues that:

… there is a tendency to generalize that economic growth reduces poverty, when in fact it is the direct and indirect effects of the agricultural growth that accounts for virtually all of the poverty decline.

This confusion is harmful to the objective of poverty reduction for three reasons: (1) rapid agricultural growth requires substantial public investment specific to the agricultural sector; (2) foreign aid has a
particularly important role to play in achieving a low income country focus on agricultural growth; (3) current fashions in economics tend to discourage sector specific investments as interfering with market processes that are thought to be efficiency increasing.

The marked slowing of poverty reduction in Asia during the past decade and increasing poverty in Africa are both the result of neglect of agriculture by governments and foreign aid institutions. It is urgent for the poor that the underlying policy errors be corrected. …

The conclusion is that there is such a thing as "a pro-poor growth strategy;" it is faster than alternative strategies; it requires specific policy focus; and, it brings rapid decline in absolute poverty. (p.1).

The report is very opinionated and summarily treats a complex topic in just 30 odd pages. Is is, essentially, a very lengthy editorial to correct the recent trend away from rural and agricultural development in aid policies of donor institutions. However, I think it is well worth reviewing.