Research on agriculture and rural development supports the World Bank’s goal of achieving food security and meeting the growing global demand for food. The agriculture and rural research program investigates five broad areas:
1. Raising productivity in rural areas
Poor households and lagging regions often depend heavily on agriculture, especially in Africa where more than 70% of the poor depend on agriculture for their livelihood. African productivity per worker has fallen since 1980, and it seems likely that adoption of new technologies could boost incomes and reduce poverty. Research aims to understand productivity differences between farms and to identify policies for broad-based agricultural growth.
2. Productivity growth in poor countries
Implications of productivity growth in low-income countries for poverty, using models and household survey data to identify where improvements in productivity will have the greatest impact and to compare improvements in agricultural productivity with price policies as means of generating the large increases in food output needed between now and 2050.
Poor land tenure can reduce productivity, and policy is a significant component of the Bank’s rural development agenda. Current work focuses on three main areas. (1) gender impacts of land tenure, (2) efficiency and equity impacts of restrictions on, or absence of, land markets, (3) impacts of land reforms on household in Brazil, Colombia, South Africa, Malawi, and India.
Limited access to finance is a particularly serious problem for rural households. Research assesses the impacts of programs to reduce these barriers on poverty, income inequality, nutrition, and gender disparity. It considers (i) constraints to access, (ii) strategies for financial system development; (iii) the role of microfinance, and (iv) lessons from innovative microfinance projects.
Reductions in the share of the workforce in agriculture are central to economic development, but the costs of rapid movement are substantial, with substantial adverse impacts on productivity and rural incomes. These problems frequently lead to policies, such as agricultural protection, that may reduce income disparities temporarily, but are costly and ineffective in the long-run. Research considers better-targeted policies, such as improvements in education, land tenure and infrastructure, and reductions in barriers to mobility.
3. Public goods and externalities
Rural infrastructure—for transport, water, and electricity—is a major area of bank lending and a major focus of research. The objectives of this research are to assess the contribution of infrastructure projects to agricultural performance, economic growth, and poverty reduction; and to understand the complementary factors influencing returns to infrastructure investments.
Irrigation and drainage are a major focus of World Bank lending, and policies for efficient water use are increasingly important. How can conflicts over water use be best managed? Further work might also investigate how global warming and increased rainfall variability affect the demand for irrigation.
Community-based development (CBD) is a popular approach to provision of public goods. This research (joint with the overty research team) includes qualitative studies, and evaluations of decentralization and CBD programs. It is yielding insights on key questions, including the impact of CBD programs on the quality or quantity of public services; on the targeting of beneficiaries; and on participation by the most disadvantaged. A Policy Research Report will be released in 2010.
4. Agriculture, trade, and the environment
Environmental externalities arise at local and global levels. One strand of research examines the impact of trade reform for the local environment, and asks how people can best act as stewards of natural resources. Another strand of work focuses on global issues, where rising greenhouse gas concentrations are likely to increase temperature and precipitation extremes. Will this result in increased crop damage from extreme weather events; reduce food security; and increase poverty? If so, what are the best policy responses.
5. Poverty, volatility, and price distortions
The food price spike of 2007-08 highlighted the vulnerability of poor people to food prices. While food price increases in some developing countries were moderated by export restrictions and/or declines in import duties, these trade measures contributed to the instability of world prices.
A recent, major study has highlighted the behavior and determinants of agricultural trade distortions and their impacts on poverty. Five books and a publicly available online database document changes in policies and the political economy influences on policy are being examined in another volume. Considerable additional work is being undertaken to examine impacts on poverty and inequality.
Another strand of work focuses on the agricultural negotiations in the WTO. It considers the implications of proposed reforms such as the Special-Safeguard mechanism (SSM), and other changes in rules; and offers detailed assessments of proposals for cutting tariffs and domestic support. These assessments are then used to quantify impacts on real incomes, poverty and instability.
Will Martin, Research Manager, 202.473.3853, Wmartin1@worldbank.org