A presentation by Thom Jayne from the 2009 BASIS Conference on "Escaping Poverty Traps: Connecting the Chronically Poor to the Economic Growth Agenda."

1. Discussion of session on:
How, Where and When
Agriculture Can Be Used to
Address Chronic Poverty
Thom Jayne
Michigan State University
Conference on Escaping Poverty Traps
Washington, DC
February 26-27, 2009

2. LOW AGRICULTURAL INCOMES ARE GENERALLY
CORRELATED WITH HIGH POVERTY RATES
Ethiopia
Tanzania
Madagascar
Kenya
Burundi
Congo,DR
Rwanda
Uganda
R
2
= 70%
$0
$50
$100
$150
$200
$250
$300
$350
$400
20 40 60 80 100
National Poverty Rates (various years)
PerCapitaAgGDP(US$/person),2002

3. Lewis presentation
• Laudable and ambitious in its goals
• Identifies the crucial policies and programs
• Presented as if donor resolve, funding, and a
good strategy will be successful in slashing
poverty rates
• Even with significant rise in funding for donor
programs, their effects will be overshadowed by
government programs and policies.
• The most important determinant of poverty rates
in the future will be public policies and programs
(lessons from structural transformation in Asia)

4. Farm size distribution:
Small farm sector
hectares
0
1
2
3
4
5
6
7
Ken Eth Rwa Moz Zam
bottom 25%
2nd
3rd
top 25%

5. Characteristics of smallholder farmers,
Zambia 2003/04
2576103732.2762,566
(75%)
Households
not selling
maize
514135745413.9234,988
(23%)
Rest of
maize
sellers
2,2828236901,5586.023,680
(2%)
Top 50% of
maize sales
Total hh
income
(US$)
Gr. Rev.,
crop sales
(US$)
Gr. Rev.,
maize sales
(US$)
Asset
values
(US$)
Farm
size
(ha)
N=

6. Rural population growth rates

7. Share of Urban population in total
population, 1968 and 2000

8.  More than 50% of Africa’s population will be
urban by 2015.
 Driven largely by
 land pressures
 lack of investments in rural areas to boost productivity
 Majority of African populations are soon to be
consumers of food, not producers
 Demand for marketed food is rising rapidly
 Future priorities to tackle: urban poverty,
underemployment, rise of slums, poor sanitation,
disease

9. Donor
budget support
Government budget
•Long-term productive investments:
R&D, extension, roads, rail, ports,
electrification, policy stability, etc.
• Low immediate payoffs
• High medium/long-term payoffs
• Input subsidies,
• Crop price supports for larger
farms (lion’s share of total sales)
• land bills, food aid
• Immediate political payoffs;
• Visible support to constituencies
• contribution to sustainable
poverty reduction is unclear
Political economy of public resource allocation

10. Marginal
expenditure to
reduce poverty
100 80 60 40 20 0
Headcount poverty rates
Agricultural
development
investments
and policies

11. Marginal
expenditure to
reduce poverty
100 80 60 40 20 0
Headcount poverty rates
Safety net
programs Agricultural
development
investments
and policies