VERY BAD: Price Policies That Penalize Agriculture Impede Economic Development

VERY BAD: Price Policies That Penalize Agriculture Impede Economic Development
Agricultural development took off in countries that removed price policies that penalized agriculture.

One of the salient findings of a reasearch by two international agencies is that among 117 countries, agricultural development took off when they removed price policies that penalize agriculture.

This was reported by the International Food Policy Research Institute (IFPRI) and the International Institute for Sustainable Development (IISD). The research tracked the performance of 117 countries over 45 years to understand which policies have succeeded or failed in eradicating poverty through agriculture.

The report noted that poverty eradication through agriculture depends whether a country has enough agricultural land, how fertile it is, and the demographic pressures.

The other key findings in the research, aside from the price policies that penalize agriculture are: “To determine the development needs of a particular country, look at how much agricultural land is available, how fertile it is, and birth rates.

“Public investment in research, extension services, electricity and irrigation are important, but the quality of those services can matter more than quantity.

“Land reforms, research institutions and improving access to credit are also critical, but ultimately no country succeeded without a combination of policies and public investments that complemented each other.”

“Inclusive agricultural transformation is the bedrock of development. It can lead to increased productivity, higher incomes, food security and women’s empowerment,” said Carin Smaller, senior policy advisor of IISD.

The global analysis explains how progress has been achieved in some countries in recent decades and what steps can be taken for countries to succeed – and the outlook is positive.

“Only 10 countries of the 117 are still categorized as subsistence agriculture compared with 30 in 1970,” explains David Laborde, senior fellow, IFPRI. “Except for countries at war, no country is worse off than they were decades ago. Our report is a clear indication that agricultural transformation fosters economic empowerment for countries and their communities.”

None of the countries studied were able to transform without an appropriate mix of policies and public investment that complemented each other at a given juncture. No single measure alone was sufficient to make good progress,” according to IISD’s Carin Smaller.

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