The Role Of Agriculture In The Fast Growing Rwandan Economy
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The role of agriculture in the fast-growing Rwandan Economy by Diao, Xinshen,Bahiigwa, Godfrey,Pradesha, Angga Pdf
This study assesses the future growth prospects of Rwanda. The report first focuses on broad economic growth using a rather aggregated 18-sector dynamic general equilibrium model to display the trade-off between rapid growth and structural change. The analysis shows that with the current investment pattern, rapid growth is possible but structural transformation is slow. With an overvalued exchange rate, growth in the tradable sector slows down and its share in the economy stays small. The importance of agriculture thus should be considered in the broad development strategy, for its role not only in poverty reduction but also in economic growth.
Public investment prioritization for Rwanda’s inclusive agricultural transformation: Evidence from rural investment and policy analysis modeling by Aragie, Emerta,Diao, Xinshen,Spielman, David J.,Thurlow, James,Mugabo, Serge,Rosenbach, Gracie,Benimana, Gilberthe Pdf
As Rwanda is expected to return to its rapid growth trajectory following the COVID-19 pandemic, agriculture will continue to play a central role in the structural transformation of the entire economy. To this end, the Government of Rwanda continues to invest in the agricultural sector by building on Strategic Plans for the Transformation of Agriculture (PSTAs) that began in the early 2000s. The challenging question is how to prioritize public expenditures across a broad portfolio of policies and programs. Ambitious plans, whether in the short or long term, require difficult decisions. The prioritization of public investment becomes even more complex as Rwanda’s structural transformation advances and as new investments—beyond the farm—become critically important for the agricultural sector. The structural transformation process itself means that as agriculture becomes more integrated with the rest of the economy, public resource allocations need to address a wider range of issues across the entire food system; these include nutrition-sensitive food production systems, inclusive value chain development, nonfarm rural enterprise development, and climate-resilient sustainable intensification of both crops and livestock. This study provides evidence that is designed to assist the Government of Rwanda in its selection of agricultural policy, investment, and expenditure portfolios that reflect the country’s broad focus on its food system and structural transformation. This process of prioritization will need to incorporate multiple public investments targeting multiple development outcomes and will need to be grounded in the costeffective use of public resources in a largely market-led transformation process. This data-driven and evidence-based approach must critically underpin an informed investment prioritization process that helps achieve ambitious targets in an environment constrained by limited public resources. The study uses the Rural Investment and Policy Analysis (RIAPA) economywide model developed by the International Food Policy Research Institute (IFPRI), with contributions from colleagues at the Ministry of Agriculture and Animal Resources (MINAGRI), the Ministry of Finance and Economic Planning (MINECOFIN) and the National Institute of Statistics of Rwanda (NISR). The study draws on data from multiple sources as well as expert insights to inform the application of RIAPA’s Agricultural Investment for Data Analyzer (AIDA) module as a tool to measure the impacts of alternative public expenditure options on multiple development outcomes. Using this integrated modeling framework, the study links agricultural and rural development spending to four specific outcomes: economic growth, job creation, poverty reduction, and diet quality improvement; at the same time, it considers the synergies and tradeoffs associated with the different investment options in the transformation process. The paper first assesses the contribution of public expenditures to agricultural and rural development under the fourth Strategic Plan for Agriculture Transformation (PSTA 4) that extends between 2018 and 2024. These findings are important, given the fact that since the beginning of PSTA 4, the budget allocated to MINAGRI (measured in constant prices) has stagnated. Our results suggest that increased spending on agriculture is well justified and that such spending is essential if the Government of Rwanda is to achieve its long-term development goals.
Agricultural Growth and Investment Options for Poverty Reduction in Rwanda by Xinshen Diao,Shenggen Fan,Sam Kanyarukiga,Bingxin Yu Pdf
Although Rwanda has made considerable progress in recovering politically and economically from the devastating effects of the 1994 genocide, the poverty rate is still higher and the gross domestic product lower than before the genocide. Poverty reduction and economic growth would receive much-needed support from increased agricultural growth. This study assesses alternative agricultural development strategies, identifying areas in which policy reforms, together with public and private investment, can best promote Rwandan agriculture. The authors evaluate the potential of several different agricultural subsectors-grains, root crops, livestock, and others-to contribute to national agricultural growth and poverty reduction. They conclude that growth in staple crops, particularly root crops such as cassava and potatoes, has the greatest potential to encourage economywide growth and poverty reduction. Promoting the necessary staple crop growth will require the allocation of public resources to the agricultural sector to increase significantly, reaching 10 percent of the total government budget. It will also require rethinking Rwanda's earlier emphasis on promoting export crop growth, which has proved inadequate in encouraging poverty reduction while also posing environmental problems. This study makes an important contribution to the debate over the most effective development strategies for Rwanda and other Sub-Saharan African nations.Show More Show Less
The Role of Agriculture in Development by Xinshen Diao,Hazell, P.B.R.,Resnick, Danielle,Thurlow, James Pdf
Changes in the global environment have led some to question whether the conventional wisdom on the role of agriculture in economic development is still relevant to Africa today. This report critically examines the literature on this issue, taking both the conventional and skeptical views into account. It complements this review with case studies of five African countries. The findings indicate that agricultural growth will play an essential role in promoting overall economic growth and reducing poverty in most of Africa's agrarian-based economies. This holds true even for countries that have the potential for industrial growth driven by natural resources. The results also show that only smallholder food-staple and livestock production can generate broadbased agricultural growth. By demonstrating that Africa's agricultural and food subsector cannot be bypassed, this report contributes to an important ongoing debate in development studies.
Foreign Capital Flows and Economic Development in Africa by Evelyn Wamboye,Esubalew Alehegn Tiruneh Pdf
This collection examines the extent to which foreign capital from conventional (OECD countries) and non-conventional (BRICS) sources has impacted economic development in Africa over the last two decades. It provides in-depth analyses of the nature, motives, and implications of this capital, and identifies drivers of contemporary rapid growth within and across African countries. Authored by leading experts, the book offers original insights for academics, policymakers, and practitioners studying the changes taking place in Africa as the continent strides more confidently toward integration with the global economy. The major themes addressed in this book include:• The implications of growing Chinese engagement in Africa • BRICS countries' versus OECD countries' investment contributions to Africa• The politics of land, land grab, and the puzzle of inclusive development in Africa• Foreign research and development spillovers, trade linkages, and productivity in Africa• Foreign aid effects on social sector, growth, and structural change in Africa• Remittances, foreign debt, resource management, and economic development in Africa
Food safety and developing markets by Unnevehr, Laurian,Ronchi, Loraine Pdf
To better inform donor support for public food safety interventions, this paper reviews the literature on the impact of more stringent food safety standards on developing-country markets. This literature has primarily focused on the market access and economic implications of higher standards in export markets rather than on the extensive debate around market failure and public health benefits that dominates the literature in developed countries. We find that the market access benefits from compliance with public and private food safety standards are clear, as is the market exclusion that results from noncompliance. These benefits are now well documented, with more recent evidence pointing to added benefits of poverty reduction and spillovers for health and productivity. Rigorous evidence is also found concerning the positive role of technical assistance and public or donor support. Most of the literature, however, has focused on the relatively small market for EU horticultural products, which will provide opportunities for only a fraction of developing-country producers. This narrow focus causes important gaps in the literature informing meaningful public roles in addressing food safety in developing countries. Future research should examine and rigorously evaluate alternative models for how best to support improved food safety management outside of the export channels that have been the focus of the literature thus far. Further, evaluating the impact of publicprivate approaches on reduction in enforcement costs and improving compliance through supporting industry-led efforts would better inform donor support for food safety reforms, as would research among developing-country consumers with respect to food safety reforms and public health.
The political economy of MGNREGS spending in Andhra Pradesh by Sheahan, Megan,Liu, Yanyan,Barrett, Christopher B.,Narayanan, Sudha Pdf
While government spending on pro-poor community asset creation and income-transfers could have compounding positive effects on poverty reduction, it is important to first study trends in the allocation of funds, particularly as they relate to the susceptibility of the program to political clientelism. This paper uses expenditure data at the local level in Andhra Pradesh from Indias National Rural Employment Guarantee Scheme, a rights-based program distributing both public and private goods, to investigate the relationship between voting outcomes and program intensity in the seven years straddling a major election. By focusing on one state where accountability and transparency mechanisms have been employed and implementation efforts have been applauded, the authors do not find evidence of blatant vote buying before the 2009 election but do find that patronage played a small part in fund distribution after the 2009 election. Indeed most variation in expenditures is explained by the observed needs of potential beneficiaries, as the scheme intended.
Drought risk reduction in agriculture by Cenacchi, Nicola Pdf
This report is a component of the Research Program on Climate Change, Agriculture, and Food Security (CCAFS)-funded project Impacts of Climate Extremes on Future Water and Food Security in South Asia and East Africa. The goal of the project was to characterize extreme drought events, to improve on a methodology to assess the probability of these events in the future under climate change, to illustrate their impacts, and to provide suggestions on coping strategies. The present report sets the stage for the overall project by undertaking a review of the causes of vulnerability to drought in East Africa and the western Indo-Gangetic Plain (IGP) of South Asia, and discussing the options to increase resilience to drought in the agricultural sector. Agriculture is a high-risk endeavor in both regions, due to a combination of recurrent droughtswhich may intensify due to climate changepoor soil fertility, and a host of constraints faced by farmers, especially low access to input and output markets. These factors, combined with farmers high aversion to risk, stifle investments in agriculture, resulting in continuous underachieving production, low income, and persisting poverty.
Assessing progress made toward shared agricultural transformation objectives in Mozambique by Benson, Todd,Mogues, Tewodaj,Woldeyohannes, Sileshi Pdf
What has been the recent performance of the agricultural sector in Mozambique and the progress made thus far toward achieving the objectives established under the Comprehensive Africa Agriculture Development Programme (CAADP) initiative for Mozambique that began in late-2011?
Variable returns to fertilizer use and its relationship to poverty by Harou, Aurélie,Liu, Yanyan,Barrett, Christopher B.,You, Liangzhi Pdf
Despite the rise of targeted input subsidy programs in Africa over the last decade, several questions remain as to whether low and variable soil fertility, frequent drought, and high fertilizer prices render fertilizer unprofitable for large subpopulations of African farmers. To examine these questions, we use large-scale, panel experimental data from maize field trials throughout Malawi to estimate the expected physical returns to fertilizer use conditional on a range of agronomic factors and weather conditions. Using these estimated returns and historical price and weather data, we simulate the expected profitability of fertilizer application over space and time. We find that the fertilizer bundles distributed under Malawis subsidy program are almost always profitable in expectation, although our results may be reasonably interpreted as upper-bound estimates among more skilled farmers given that the experimental subjects were not randomly selected.
The Economywide Effects of Teff, Wheat, and Maize Production Increases in Ethiopia by Benson, Todd,Engida, Ermias,Thurlow, James Pdf
The government of Ethiopia is investing significant public resources to increase overall national production of teff, wheat, and maize. To better understand the likely economywide effects of increases of between 12 and 14 percent in the national production of these cereals, a set of production increase scenarios for each crop were run using a computable general equilibrium model of the Ethiopian economy. The analyses were extended to also consider the effects of several international wheat price and wheat import scenarios, a wheat subsidy program, and maize exports. Among the effects considered are changes in economic growth, prices, total household consumption, cereal and calorie consumption levels, and poverty measures.
What dimensions of womens empowerment in agriculture matter for nutrition-related practices and outcomes in Ghana? by Malapit, Hazel J.,Quisumbing, Agnes R. Pdf
This paper investigates linkages between womens empowerment in agriculture and the nutritional status of women and children using 2012 baseline data from the Feed the Future population-based survey in Ghana. The sample consists of 3,344 children and 3,640 women and is statistically representative of the northernmost regions of Ghana where the Feed the Future programs are operating.
The agrarian reform experiment in Chile by Valdés, Alberto,Foster, William E. Pdf
This paper presents what is known about the role of agrarian reform and the subsequent counter reform in producing a successful dynamic evolution of Chilean agriculture.
Environmental migration and labor markets in Nepal by Maystadt, Jean-François,Mueller, Valerie,Sebastian, Ashwini Pdf
While an emerging literature cites weather shocks as major determinants of migration, scant evidence exists on how such migration impacts the labor markets of receiving communities in developing countries. We address this knowledge gap by investigating the impact of weather-driven internal migration on labor markets in a post-conflict country, Nepal, using household survey data in 2003 and 2010.
Strategies to control aflatoxin in groundnut value chains by Florkowski, Wojciech J.,Kolavalli, Shashidhara Pdf
Groundnuts, which are widely consumed in West Africa, are prone to contamination by aflatoxin during production and storage. Although aflatoxin plays a role in many of the important health risks in developing countries, individuals and governments ignore the risks because their health effects are not immediate. In the developed world strong regulations remove contaminated kernels and their products from the food systems. The objective of this paper is to examine production and marketing practices, particularly grading methods, in Ghanas groundnut value chain to obtain a clear understanding of the sources and levels of aflatoxin contamination in the crop and how such contamination can be sharply reduced.