Agriculture and Poverty in Afghanistan
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Agriculture is crucial for Afghanistan's economy, accounting for 25% of GDP and employing the majority of the workforce. However, agricultural productivity and incomes remain low due to a lack of irrigation, rural infrastructure, skills, and support services. Most farmers practice subsistence farming on small landholdings with rain-fed crops. Expanding irrigation, improving crop varieties, and linking farmers to markets could boost yields, incomes, and jobs. A two-pillar strategy focusing on both irrigated commercial farming and rain-fed subsistence areas could help reduce Afghanistan's high poverty and unemployment rates.
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Agriculture and Poverty in Afghanistan
- 1. الرحيم الرحمن هللا بسم 1
- 2. By: Masaood Moahid Department of Agricultural Economics, Faculty of Agriculture, Nangarhar University 2
- 3. Objectives: This conference presentation is attempting to: disclose the status of agriculture and poverty in Afghanistan Link agriculture with poverty in the country It will also answer the two key questions: 1. Will agriculture and natural resources be adequate to drive growth and job creation in Afghanistan? 2. What are the most important policy and investment priorities to support agricultural growth and job creation? 3
- 4. Why Afghanistan is termed to be an agricultural country? Brainstorming ??? 4
- 5. Why Afghanistan is termed to be an agricultural country؟ A country is termed to be agricultural because of the availability of a number of possibilities as: The availability of suitable climate for crops and trees, availability of vast areas of land for cultivation, abundant supply of water, and some others. Many countries like Japan with limited land, hot desert countries with shortage of water, freezing weather in European countries limit agriculture. Afghanistan has almost all the natural possibilities that can qualify it as an agricultural country. Variety of climate, large number of rivers, large peace of fertile land and other.. 5
- 6. Introduction Agriculture (excluding opium poppy) accounts for about one quarter of national GDP and is the second largest sector after services. (in 2013, agriculture contributed 25% of national GDP ($4.5 billion out of $18 billion). More than 80 percent of the population and nearly 90 percent of the poor live in rural areas, and agriculture plays an important role in their livelihoods. Agriculture is the sector with the greatest potential to drive economic growth in the foreseeable future, Generate the foreign exchange and Government revenue needed to help offset projected reductions in foreign aid. 6
- 7. Introduction cont.. Key features of Afghan Agriculture sector Agro-processing accounts for over 90% of total manufacturing. The sector employs some 4.5 million workers, or 60% of the total Afghan workforce. Very high inequality in holdings - majority (60%) of holdings are small (< 1ha) Most farmers producing for own consumption – subsistence orientation. High geographical dispersion with population concentrated in selected fertile areas with water. 7
- 8. Source: NRVA, 2014 survey report Key features conti… 8
- 9. GDP proportion of major sector of Afghanistan 42 30 28 Services Agriculture industry The work force proportion of major sector of Afghanistan 15.7 5.7 78.6 Services industry agricultu re Source: IRACSO, 2010 report Key features conti…. 9
- 10. Agricultural value added, % of GDP Key features conti… Value added B$ www.adb.org 10
- 11. Key features cont… Exports of Afghanistan: $483 M, 2016 Type % Grapes 20 Vegetable 18 Nuts 12 Other fruits 7 Tomatoes 4.5 oily Seeds 8 Spice Seeds 5.1 Knotted Carpets 8.1 Animal Organs 1 Others 16.3 Total 100 Exports in 2016 Total: 483 M $ 11Source: www.cso.gov.af
- 12. Cereal Balance Sheet in (000 tons), 2014 Crop Requirements Domestic Production Surplus/D eficitFood Seed Feed Loss Total Irrigated wheat 204 527 3510 Rainfed wheat 112 225 1498 All wheat 4362 316 752 5430 5008 -422 Milled rice 463 22 35 520 500 -20 Maize 55 8 200 47 310 310 Barley 27 45 357 76 505 505 Total 4907 391 557 910 6765 6323 -442 Source: www.cso.gov.af 12
- 13. Livestock, vegetable and fruit production, 2014 Livestock production, Afghanistan Type Unit production Meat Ton 156, 900 Beef Ton 61900 Mutton Ton 40900 Goat meat Ton 34300 Camel meat Ton 3300 Chicken Ton 8800 Other Ton 7700 Milk Ton 2032400 Hides No 796600 Skins No 4647000 Eggs Ton 25900 Source: NRVA Survey report, 2014 Vegetables and fruit Commodity Production ( 000 tons) All fruits 1401 Almond 47 Walnut 12 Grape 530 Apple 90 Apricot 75 Orange 9 Other citrus 2 pomogranate 24 Pear 3 peach 12 Plum 25 Melons 222 Water Melons 190 Other Fruits 160 All vegetables 834 Potato 500 Onion 135 Tomato 85 Carrot 37 okra 20 pumpkin 17 Others 40 13
- 14. National annual farming input cost by type of production input (in million Afs) Total: 0 2 4 6 Fertiliser Seed Machine Labour Other Water 5.218 4.144 3.073 1.455 1.346 1.268 Thousands World Bank, 2012 14
- 15. Major problems facing agriculture sector in Afghanistan Low yield Lack of sound rural infrastructure Lack of adequate skill and knowledge Problems in land ownership Arid and semi arid climate and water potential is not fully utilized. 15
- 16. Land distribution in Afghanistan 39 123 46 Mountains and other Arable Land Forest permanent Pasture Source: www.cso.gov.af 16
- 17. Household , by ownership of irrigated land, irrigated land size in percentage Ownership 2012 No Ownership 62.1 any Ownership 37.9 100 Less than 2 jeribs 11.8 31 2-3.9 jeribs 10.3 27 4- 5.9 jeribs 5.3 14 6 - 9.9 jeribs 3.8 10 10 -19.9 jeribs 4.8 13 20 jeribs and more 1.9 5 Total 100 100 Mean land size of any ownership 6 Source: NRVA report, 2014 17
- 18. Monthly precipitation amount and average air temperature in Kunduz, Afghanistan Source: NRVA, 2014 survey report 18
- 19. 19
- 20. Irrigation potential is not fully utilized 20
- 21. Poverty Poverty is about not having enough money to meet basic needs including food, clothing and shelter. This section focuses on the estimation and trend analysis of poverty, and it presents some basic correlates between agriculture and poverty. 21
- 22. Poverty cont… There are two major poverty indexes that are calculated on the basis of poverty lines. The first is the headcount index, which represents the percentage of the population whose monthly per capita consumption expenditure are below the poverty line. This index is the most commonly used for poverty measurement mainly because of its simplicity and ease of interpretation. P0=Np/N In fact, two populations with the same poverty headcount index might have totally different living standards in that in one, the poor are concentrated just below the poverty line, while in the other they have consumption levels well below the line. The second index used for poverty measurement is the poverty gap. This index represents the average distance between the consumption levels of the poor and the poverty line, thus capturing whether the poor have consumption just or far below the poverty line. 22
- 23. Poverty gap…, formulae Calculating of poverty gap index assuming poverty line of 125$ Expenditure for each individual in country Poverty Gap Index (P1) Expenditure in country C 100 110 150 160 Poverty gap 25 15 0 0 G/Z 0.2 0.12 0 0 0.08 (=0.32/4) 23
- 24. Poverty gap cont.. Trends of poverty measures in Afghanistan Poverty indicators Survey year 2007-2008 2011-2012 Poverty headcount 36.3 36.5 Poverty Gap 7.9 8.6 24
- 26. Fig: Trend in poverty headcount by residence and region Source: NRVA, 2014 26
- 27. Fig: total average contribution to poverty reduction 27
- 28. Fig: Pathway to decrease poverty through increase productivity 28
- 29. Agriculture’s Prospects for Job Creation The Govt. focus is in mining and agriculture. But mining produces relatively few jobs: perhaps 10,000 - 30,000 by the 2020s. Even in the best-case scenario, mining in Afghanistan could directly generate about 100,000 - 125,000 jobs over the next ten years. This is a rather small number compared to the 400,000- 500,000 young people who will enter the national workforce annually, And with most of the jobs in mining being for skilled and semi-skilled workers, their direct benefits for the rural poor, landless, nomads, and women are likely to be limited. The job impact from agricultural growth would be much more substantial. Agriculture generates 3.2 - 3.4 million FTE jobs. The number of jobs could significantly increase if the irrigated area can be expanded and productivity raised. For example: Expanding the irrigated area for cereal production by 100,000 ha could produce an additional 80,000 - 90,000 FTE jobs; Irrigating arable land for crop production could create 33 - 60 percent more jobs per hectare than relying on rain-fed farming; and Shifting from wheat to production of some horticultural crops could triple, or even quadruple, the labor input (employment) per hectare. 29
- 30. To decrease poverty and increase agri. Production and productivity a two pillar strategy is needed Pillar 2 •Rainfed wheat •Nomadic livestock Main focus •Converting rainfed into irrigated •Targeting the poor, nomads and landless •Improve productivity of rainfed crops •Settlement of Kuchi population Pillar 1 •Irrigated wheat •Intensive livestock •Horticulture Main focus •Commercial development of promising value chain •Targeting commercially oriented farms •Linking small farmers with value chains 30
- 31. Conclusion Agriculture is the only sector which can respond to the increasing rate of poverty and unemployment. Irrigation potential is not fully utilized in the country Poverty and unemployment is increasing in the country Kuchi population is the most vulnerable The two pillar strategy is very efficient for the agriculture sector of the country. 31
- 32. References Government of Afghanistan, 2008. Afghanistan National Development Strategy: Agriculture and Rural Development. Kabul. Government of Afghanistan, Central Statistics Organization (CSO), 2007/08. National Risk and Vulnerability Assessment. Kabul: CSO. Government of Afghanistan, Ministry of Agriculture, Irrigation, and Livestock (MAIL), 2009. Change Management Program Document. Kabul: MAIL, April. USAID, 2012. “Land Reform in Afghanistan: Gender Assessment.” Kabul: United States Agency for International Development. Islamic Republic of Afghanistan. Afghanistan National Development Strategy 1387-1391 (20082013): A Strategy for Security, Governance, Economic Growth & Poverty Reduction. Kabul: May 2008. World Bank, 2012. “Interim Strategy Note for Afghanistan,” March 9. Washington DC: World Bank. www.adb.org www.cso.gov.af www.mail.gov.af www.mew.gob.af 32
- 33. 33
Editor's Notes
- Agriculture offers significantly greater potential for creating jobs. It also has prospects for raising labor productivity, benefiting women and other disadvantaged groups (the poor, landless, and nomads), and reducing poverty and food insecurity in rural areas.
- Real Gross Domestic Product (real GDP) is a macroeconomic measure of the value of economic output adjusted for price changes (i.e., inflation or deflation). This adjustment transforms the money-value measure, nominal GDP, into an index for quantity of total output.
- A change in the physical state or form of the product (such as milling wheat into flour or making strawberries into jam)
- In 2016 Afghanistan exported $482M, making it the 104th largest exporter in the world. During the last five years the exports of Afghanistan have decreased at an annualized rate of -15.486%, from $531M in 2011 to $482M in 2016. The most recent exports are led by Grapes which represent 20% of the total exports of Afghanistan, followed by Vegetable Saps, which account for 17.8%.
- There are three major poverty indexes that are calculated on the basis of poverty lines. The first is the headcount index, which represents the percentage of the population whose monthly per capita consumption expenditure are below the poverty line. This index is the most commonly used for poverty measurement mainly because of its simplicity and ease of interpretation. However, the major limitation of the headcount index is its insensitiveness to the “degree” of poverty, i.e. its inability to provide information as to whether the poor consume just or far below the poverty line. In fact, two populations with the same poverty headcount index might have totally different living standards in that in one, the poor are concentrated just below the poverty line, while in the other they have consumption levels well below the line. The second index used for poverty measurement is the poverty gap. This index represents the average distance between the consumption levels of the poor and the poverty line, thus capturing whether the poor have consumption just or far below the poverty line. The squared poverty gap, the third poverty measure, is similar in construction to the poverty gap but it differs in that it applies an increasing weight to greater distances below the poverty line, thus capturing the “severity” of poverty
- The poverty gap index can be interpreted as the average percentage shortfall in income for the population, from the poverty line.[5] If you multiply a country's poverty gap index by both the poverty line and the total number of individuals in the country you get the total amount of money needed to bring the poor in the population out of extreme poverty and up to the poverty line, assuming perfect targeting of transfers. For example, suppose a country has 10 million individuals, a poverty line of $500 per year and a poverty gap index of 5%. Then an average increase of $25 per individual per year would eliminate extreme poverty. Note that $25 is 5% of the poverty line. The total increase needed to eliminate poverty is US$250 million—$25 multiplied by 10 million individuals. The poverty gap index is an important measure beyond the commonly used headcount ratio. Two regions may have the similar headcount ratio, but distinctly different poverty gap indexes. A higher poverty gap index means that poverty is more severe. The poverty gap index is additive. In other words, the index can be used as an aggregate poverty measure, as well as decomposed for various sub-groups of the population, such as by region, employment sector, education level, gender, age or ethnic group.
- As evidenced in the 2007-08 NRVA report, Afghanistan is characterized by sharp differences in poverty incidence by residence and by region. The analysis of NRVA 2011-12 confirms previous results. The incidence of poverty in rural areas is 9 percentage points higher than in urban ones, being 37.7 and 28.9 percent respectively. The nomadic Kuchi population is the most vulnerable to absolute poverty, with poverty rates of 53.8 percent. In line with the results observed at the national level, poverty has not changed significantly over time within each of the domains considered; it remains constant by residence and region, with the only exceptions being the North and North East regions where poverty has significantly – respectively – decreased and increased over time
- First movers The most promising opportunities for “first movers” lie with irrigated wheat, horticultural crops (defined here as fruits, nuts, and vegetables), and intensive livestock production (milk, eggs, and poultry meat) in peri-urban areas. These three subsectors have several major advantages: They have the best catch-up potential in the short term for raising productivity within the constraints of existing institutional capacities and infrastructure. These urgently need to be improved for longer-term gains, but this will take time to achieve. irrigated wheat and horticultural and livestock products can be produced on a competitive basis with imports (and could be exported in some cases). These commodities face strong and growing demand at home or abroad. The three subsectors are spatially concentrated in relatively small intensive irrigated and peri-urban areas that are somewhat secure and have good access to markets, and are also well located for leveraging the infrastructure investments that are planned in growth and resource corridors. They can leverage significant value addition and employment along value chains, and increase the incomes and employment of large numbers of people. Economic growth, job creation, and food security are central to the decade of transformation (2015–25) and long-term security for the people of Afghanistan. The Bank and the Government of the Islamic Republic of Afghanistan (GoIRA) recognize that agriculture and rural development are key to inclusive growth, and hence need renewed vigor and strategic long-term investments. Further, the Bank and GoIRA acknowledge that increases in agricultural productivity and market access for smallholders are critical for rural development, job creation, and food security in Afghanistan. In agrarian economies like Afghanistan’s, higher yields in agriculture, access to non-farm rural income-earning activities, migration of family members to cities, and transition to wage employment are milestones on the path to prosperity.5 But these options can only be achieved by paying attention to production risk management, by investing in climate-smart agriculture, by promoting agricultural trade, and by integrating smallholders into the value chains of commercial agriculture. In turn, such efforts need to be coupled with an enabling policy environment for private investments into commercial agriculture, and with functioning agricultural sector institutions that generate and diffuse the new technologies necessary for long-term increases in productivity and that ensure the quality and safety of products. Since manufacturing in Afghanistan is in its infancy and the jobs to be created in the mining sector will be largely for skilled and semi-skilled workers, agriculture will remain the main driver of economic growth and the biggest employer in Afghanistan for the foreseeable future. As outlined in the National Agriculture Development Framework (NADF) document (2009), the Government’s strategic framework in agriculture has four programmatic pillars: production and productivity; economic regeneration through development of value chains; natural resource management; and change management within the Ministry of Agriculture, Irrigation, and Livestock (MAIL). Based on these four pillars, a number of sector-specific policies, strategies, and laws have been developed, and more recently two national priority programs (NPPs).6 But implementing the NADF and the NPPs poses challenges. Although MAIL has developed a large number of subsector-specific policies, laws, and strategies, many of these remain nonbinding because they have not moved beyond the draft stage.7 Even once they are adopted, serious concerns remain about the institutional capacities of the relevant public institutions to implement such a broad range of interventions within any realistic time frame. Serious questions Economic growth, job creation, and food security are central to the decade of transformation (2015–25) and long-term security for the people of Afghanistan. In agrarian economies like Afghanistan’s, higher yields in agriculture, access to non-farm rural income-earning activities, migration of family members to cities, and transition to wage employment are milestones on the path to prosperity. But these options can only be achieved by paying attention to production risk management, by investing in climate-smart agriculture, by promoting agricultural trade, and by integrating smallholders into the value chains of commercial agriculture. In turn, such efforts need to be coupled with an enabling policy environment for private investments into commercial agriculture, and with functioning agricultural sector institutions that generate and diffuse the new technologies necessary for long-term increases in productivity and that ensure the quality and safety of products It is needed to adopt a more selective approach, focusing first on the subsectors and areas where early gains will be easiest to achieve, in the expectation that the rest of the sector will follow.