The Role of Agriculture in Poverty Reduction - an Empirical Perspective

49 Pages Posted: 20 Apr 2016

See all articles by Luc Christiaensen

Luc Christiaensen

World Bank

Lionel Demery

World Bank

Jesper Kuhl

Secretariat of the Danish Economic Council

Date Written: September 1, 2006

Abstract

The relative contribution of a sector to poverty reduction is shown to depend on its direct and indirect growth effects as well as its participation effect. The paper assesses how these effects compare between agriculture and non-agriculture by reviewing the literature and by analyzing cross-country national accounts and poverty data from household surveys. Special attention is given to Sub-Saharan Africa. While the direct growth effect of agriculture on poverty reduction is likely to be smaller than that of non-agriculture (though not because of inherently inferior productivity growth), the indirect growth effect of agriculture (through its linkages with non-agriculture) appears substantial and at least as large as the reverse feedback effect. The poor participate much more in growth in the agricultural sector, especially in low-income countries, resulting in much larger poverty reduction impact. Together, these findings support the overall premise that enhancing agricultural productivity is the critical entry-point in designing effective poverty reduction strategies, including in Sub-Saharan Africa. Yet, to maximize the poverty reducing effects, the right agricultural technology and investments must be pursued, underscoring the need for much more country specific analysis of the structure and institutional organization of the rural economy in designing poverty reduction strategies.

Keywords: Rural Poverty Reduction, Pro-Poor Growth and Inequality, Economic Theory & Research, Rural Development Knowledge & Information Systems

Suggested Citation

Christiaensen, Luc and Demery, Lionel and Kuhl, Jesper, The Role of Agriculture in Poverty Reduction - an Empirical Perspective (September 1, 2006). World Bank Policy Research Working Paper No. 4013. Available at SSRN: https://ssrn.com/abstract=931990

Luc Christiaensen (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Lionel Demery

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Jesper Kuhl

Secretariat of the Danish Economic Council ( email )

amaliegade 44
Copenhagen, 1256
Denmark

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