World Bank calls for agriculture renewal to reduce rural poverty

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Washington, Oct 19 (UNI) The World Bank has called for greater investment in agriculture in the transforming economies like India and China for the welfare of millions of rural poor people.

Its World Development Report (WDR), released here today, warned that the international goal of halving extreme poverty and hunger by 2015 will not be reached unless neglect and under-investment in the agricultural and rural sectors over the past 20 years is reversed.

''Rural poverty accounts for an extraordinary 82 per cent of total poverty in transforming countries,'' World Bank Group President Robert B Zoellick said.

''A greater focus on agriculture is essential when considering population pressures, declining farm sizes, water scarcity and environmental contamination, and the need to develop lagging high poverty areas, he added.

WDR said in transforming economies such as China, India and Morocco, agriculture contributed an average seven per cent to growth in GDP between 1995 and 2003, though the sector accounts for about 13 per cent of the economy and employs just over half the labour force.

The report recommended that in these countries, where 2.2 billion people live in the countryside, the agricultural agenda should focus on reducing the disparity between rural and urban incomes and raising the incomes of the rural poor.

''For the poorest people, GDP growth originating in agriculture is about four times as effective in reducing poverty as GDP growth originating outside the sector,'' WDR claimed.

''Agricultural growth has been highly successful in reducing rural poverty in East Asia over the past 15 years,'' said Mr Francois Bourguignon, World Bank Chief Economist. He said the challenge is to sustain and expand agriculture's unique poverty-reducing power, especially in South Asia where the number of rural poor people is still rising and will likely exceed the number of urban poor for at least another 30 years.

The report said agriculture can provide pathways out of poverty for millions of rural poor who would otherwise be left behind in transforming economies.

It said one way out is through a high-value agricultural revolution. Incentives to diversify into high-value horticulture, poultry, fish and dairy products could be provided via pricing reforms and an overhaul of subsidy supports for cereals.

Rapidly transforming economies must move from the green revolution to focus on new high-value agriculture to cater to the demand for high-value products in cities in view of fast-growing urban incomes.

The demand for high-value products coupled with rapidly rising urban incomes are becoming the drivers of agricultural growth and poverty reduction, the report added.

Globally, countries must deliver a level playing field for trade, while farmer organizations and other local groups need more say in setting policies, WDR said.

The report also called on transforming economies to reduce the environmental impact of intensive agriculture, especially in agrochemical and animal waste production. Given concerns over water scarcity in transforming economies, it also called for reform of institutions dealing with irrigation and the removal of water and electricity subsidies.

WDR suggested that the livelihoods of subsistence farmers can be improved by increasing the productivity of staple crops in lagging regions, a move that would require major investments in soil and water management and in agricultural research. It also called for an improved investment climate for agri-business.

For the poorest of the poor in rural areas, the report advocated improving the investment climate for rural non-farm business and job schemes in rural areas. Job programmes could entail building rural roads, planting trees in denuded areas, and working to de-silt canals and ponds, WDR recommended.

The World Bank said it is committed to increasing its support for agriculture and rural development, following a decline in lending in the 1980s and 1990s. It said in 2007 its commitments reached 3.1 billion dollars, marking an increase for the fourth straight year.


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