May 19, 2008	Monday	Jamadi-ul-Awwal 13, 1429

ISLAMABAD, May 18: The World Bank has called for greater investment in agriculture in developing countries and stressed that the sector should get extra priority if goals of halving extreme poverty and hunger by 2015 are to be realised.

In its latest World Development Report on ‘Agriculture for Development’, the bank said the agricultural and rural sectors had suffered from neglect and under-investment over the past 20 years.

“While 75 per cent of the world’s poor live in rural areas, a mere 4 per cent of official development assistance goes to agriculture in developing countries.”

According to the report, GDP growth originating in agriculture is about four times more effective in reducing poverty than GDP growth originating in other sectors.

“A dynamic … agenda can benefit the estimated 900 million rural people in the developing world who live on less than $1 a day, most of whom are engaged in agriculture,” said World Bank president Robert B. Zoellick,.

“Countries must deliver on vital reforms such as cutting distorting subsidies and opening markets, while civil society groups, especially farmer organisations, need more say in setting the agricultural agenda.”

It said agriculture could offer pathways out of poverty if efforts were made to increase productivity in the staple foods sector; connect small-holders to rapidly expanding high-value horticulture, poultry, aquaculture, and dairy markets; and generate jobs in the rural non-farm economy.

“Agricultural growth has been highly successful in reducing rural poverty in East Asia over the past 15 years,” said Francois Bourguignon, World Bank’s chief economist and senior vice-president of its development economics arm.

“The challenge is to sustain and expand agriculture’s unique poverty-reducing power, especially in Sub-Saharan Africa and South Asia where the number of rural poor people is still rising and will continue to exceed the number of urban poor for at least another 30 years.”

For its part, the bank said it intended to continue increasing its support for agriculture and rural development, following a decline in lending in the 1980s and 1990s.

Commitments in FY07 reached $3.1 billion, marking an increase for the fourth straight year. The report also warned that global food supplies were “under pressure from expanding demand for food, feed and biofuels; the rising price of energy; and increasing land and water scarcity; as well as the effects of climate change”.

“This in turn is contributing to uncertainty about future food prices. Agriculture consumes 85 per cent of the world’s utilised water and the sector contributes to deforestation, land degradation and pollution.”

The report recommends measures to achieve more sustainable production systems and outlines incentives to protect the environment.

“In transforming countries such as China, India and Morocco, agriculture contributes on an average only 7 per cent to GDP growth, but lagging rural incomes are a major source of political tensions.

“Dynamism in the rural and agricultural sectors is needed to narrow the rural-urban income gap and reduce rural poverty for 600 million poor while avoiding falling into subsidy and protection traps that will stymie growth and tax poor consumers.

“In urbanised countries, mainly in Latin America and the Caribbean and Eastern Europe and Central Asia, agriculture contributes just 5 per cent of GDP growth on average.

“However, rural areas are still home to 45 per cent of the poor, and agribusiness and food services account for as much as one third of GDP. The broad goal is to link small-holders to modern food markets and provide remunerative jobs in rural areas. The report says rich countries need to reform policies which harm the poor. For example, it is vital that the United States reduces cotton subsidies which depress prices for African smallholders.

“In the emerging area of biofuels, the problem is both restrictive tariffs and heavy subsidies in rich countries, which drive up food prices and limit export opportunities for efficient developing country producers.”

The report said that industrialised countries that were major contributors to global warming urgently needed to do more to help poor farmers adapt their production systems to climate change. –APP