Social Safety Nets and Productivity Enhancing Investments in Agriculture

Abstract

Safety nets are controversial. While their proponents see them as a means of ensuring that the benefits of economic growth are shared widely, critics see them as squandering scarce public resources and doing little to promote longer term development while discouraging work and investment. The objective of this paper is to question this widely held dichotomy. I argue that safety net interventions can contribute to agricultural and economic growth through their impact on asset creation, asset protection, resource allocation, and redistribution. Well designed and implemented social safety nets interventions can complement pro-poor agricultural investments and thus contribute to longer-term poverty reduction in addition to their short term direct impacts.

Keywords: agriculture, social safety nets

JEL Classification: O2, I38, Q18