World Bank Says Agriculture Must Take Center Stage in Development

Agence France Presse
October 20, 2007

The World Bank called Friday for agriculture to take center stage in development policies and pledged to boost its lending to the sector after allowing it to decline in 1980s and 1990s. "We need to give agriculture more prominence across the board," World Bank President Robert Zoellick said at the presentation of the institution's annual World Development Report. "At the global level, countries must deliver on vital reforms such as cutting distorting subsidies and opening markets, while civil society groups, especially farmer organizations, need more say in setting the agricultural agenda."

The report acknowledged that Bank lending to agriculture had declined from 1980 to 2000 but said its support for rural development had begun to pick up four years ago and would increase further. Commitments this year are expected to come to 3.1 billion dollars. Nevertheless, while 75 percent of the world's poor live in rural areas "a mere 4.0 percent of official development assistance goes to agriculture in developing countries," the report found. In sub-Saharan Africa furthermore, public spending on farming amounts to only 4.0 percent of total government expenditure.

The report said that for the poorest people an improvement in a country's gross domestic product that is agriculture-driven is four times more effective in reducing poverty than is GDP growth originating in other sectors. "It will be an illusion that they (the poor) will simply be absorbed by growth taking place outside agriculture," World Bank Chief Economist Francois Bourguignon said, citing the persistence of rural poverty in the flourishing economies of China and India. "Poverty is overwhelmingly rural and will be for decades to come," he added. He warned that the UN Millennium Development Goal of halving the percentage of people living on less than a dollar a day by 2015 "will only be met in poor countries if much greater attention is paid to agriculture as an instrument for development."

The Bank report drew a mixed reaction from non-government organizations, with Oxfam International "welcoming" the findings, which it said "must galvanize a strong response from governments and institutions to correct many years of neglect of the millions of poor people who depend on agriculture." Oxfam said overall global aid to agriculture had fallen by two thirds, from 11.5 billion dollars in 1987 to 3.9 billion in 2005.

But in an apparent allusion to Zoellick's appeal for freer trade, as envisaged in the Doha Round of multilateral negotiations, Oxfam insisted that "trade liberalisation by itself does mot help the poor." It cited small potato and bean farmers in Peru who found themselves unable to compete against cheap wheat and rice imports after the country opened its markets. As part of the six-year-old Doha Round, developing countries have been pressing industrialized governments reduce agricultural subsidies, which make it difficult for poor farmers to compete on world markets, and to lower tariffs on farm imports. That has yet to happen, according to Bourguignon, because of the poltical clout wielded by agricultural lobbies in rich countries. "We are in front of political economy problems in some countries," he said. "It is true that agricultural producers are able to exert pressure on the rest of society."

ActionAid, which is spearheading a campaign to stamp out hunger, denounced the Bank report for perpetuating the "same market-led approach, which for the last 25 years has been a massive failure even by its (the Bank's) own standards." "This approach has led not only to exorbitant fertiliser prices, inadequate transport and lack of credit, but also to the increased concentration of land and food distribution in the hands of agribusiness," asserted Collins Magalasi of ActionAid in Malawi.

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