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Moz econ wide-implctns_agric-growth
Moz econ wide-implctns_agric-growth
Moz econ wide-implctns_agric-growth
Moz econ wide-implctns_agric-growth
Moz econ wide-implctns_agric-growth
Moz econ wide-implctns_agric-growth
Moz econ wide-implctns_agric-growth
Moz econ wide-implctns_agric-growth
Moz econ wide-implctns_agric-growth
Moz econ wide-implctns_agric-growth
Moz econ wide-implctns_agric-growth
Moz econ wide-implctns_agric-growth
Moz econ wide-implctns_agric-growth
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Moz econ wide-implctns_agric-growth

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  • 1. Agricultural Growth and Poverty Reduction in Mozambique: Technical Analysis in Support of the CAADP Process Karl Pauw (IFPRI) James Thurlow (UNU-WIDER) Rafael Uaiene (MSU) John Mazunda (Independent)
  • 2. Objectives of the study Conduct CGE analysis of the economywide implications of accelerated agricultural growth on national/regional growth, poverty reduction, and caloric availability Help policymakers understand − the nature of economic linkages between agriculture and other sectors; − the socio-economic importance of the agricultural sector; − implications of regionally-focused policies under PEDSA; − how to better integrate agricultural development policies into the broader development strategy for Mozambique
  • 3. Introduction and context Very rapid GDP growth during 2003-2008 (8%), with strong growth across all sectors. Agriculture also performed strongly (7%)... at least according to national accounts What about poverty? Survey Nat- Location Region year ional Urban Rural North Center South2002/03 54.1 51.5 55.3 55.3 45.5 66.52008/09 54.6 49.5 56.8 46.3 59.7 56.8
  • 4. Explaining the growth-poverty disconnect (Arndt et al. 2011)1. Food and fuel price shocks: − Prices peaked in 2008 when survey data was collected − High import intensity = vulnerable to shocks2. Drought in 2008 affected central region in particular: − 16-17% yield shock for key staples3. National accounts agricultural statistics doubted − Early Warning System estimates used until 2009 − TIA used since 2010; considered more reliable but paints a much gloomier picture for 2002–2008
  • 5. Model scenarios CGE model (base year 2007) used to compare two alternative growth paths during 2009–2019 (PEDSA implementation period) “Baseline scenario” − Assume Mozambique continues along the same growth trajectory − Need to understand what exactly happened “CAADP scenario” − Broad-based agricultural growth across all subsectors − PEDSA targets high-potential areas in center and north − Growth target of 7 percent achieved
  • 6. Lessons from “yield analysis” Stagnant crop yields; land expansion just matched population growth; decline in per capita staple crop production. Regional differences: − North: high potential, but sharp decline in yields; very rapid land expansion − Centre: relatively strong yield growth despite drought impact; land expansion rate exceeds population growth − South: some crops (e.g., cereals) performed adequately, but average yields remain very low and land expansion slow Institutional factors: 2000s more about restructuring institutions and developing agricultural policies, and not so much about developing agriculture
  • 7. Example: Cereal crop yields (2002–2008)
  • 8. National GDP at factor cost GDP Growth 2009-2019 shares (%) Base CAADPTotal GDP 100.0 5.7 6.8 Agriculture 26.7 3.4 7.0 Cereals 7.5 3.8 8.5 Root crops 5.3 3.8 6.0 Pulses 3.2 3.3 7.9 Horticulture 2.6 2.0 4.3 Export crops 1.2 3.7 5.3 Livestock 1.9 3.1 6.9 Industry 26.1 5.3 5.3 Services 47.2 7.1 7.5
  • 9. Regional agricultural GDP at factor cost Agric. Growth 2009-2019 GDP shares (%) Base CAADP Agricultural GDP* 100.0 3.5 7.1 Northern region 25.9 1.0 7.6 Central region 57.6 4.6 7.6 Southern region 16.5 2.8 4.2* Crops and livestock only; excludes forestry and fisheries
  • 10. Yield effects (selected crops) Yield achieved by % Initial 2019 change yield 2009- (2009) 2019 (mt/ha) Base CAADP CAADPMaize 0.9 0.9 1.3 43.7Sorghum 0.6 0.8 0.8 39.1Rice 1.0 1.3 1.5 40.4Cassava 8.4 12.1 14.2 67.9Pulses 0.7 0.6 1.0 49.2Groundnuts 0.3 0.3 0.5 46.8Vegetables 5.0 4.8 6.3 25.3Sugarcane 12.2 9.8 15.8 29.6Cotton 0.5 0.4 0.6 36.7
  • 11. Poverty and calorie deficiency rates 2009 2014 2019 Base 51.0 46.8Poverty 54.6 CAADP 45.2 36.1Calorie Base 45.5 40.2 49.5deficiency CAADP 41.0 32.6
  • 12. Conclusions Neglecting the agricultural sector has proven to be damaging to poverty reduction efforts and food security An agricultural revival is needed if Mozambique is to achieve agricultural growth and poverty reduction goals Yield targets for achieving 7% growth are reasonable and within reach Prioritization is important as crops differ in terms of their effectiveness in contributing to growth, poverty reduction, or nutrition Policies that target only “breadbasket” regions may lead to unequal outcomes
  • 13. Final remarks: Agriculture and the broader development strategy Does agriculture run the risk of Dutch disease (the “resource curse”)? What are the potential spillover effects for agriculture from investments in “development corridors” Development corridors: east-west versus north- south? − CGE results: even under CAADP scenario we still see significant gains for households in the south  is the “common national market assumption” valid?

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