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Research Highlights 2009: Agricultural and Rural Development

Themes | Highlights | Team | Notes | Current Research Program | 2009 Publications 

2009 Annual Research Highlights Report Cover

 Full Report 

Research on agriculture and rural development is critical to the Bank’s mission because poverty remains largely a rural phenomenon, with 75 percent of the world’s poor living in rural areas and many depending on agriculture for their livelihoods. Improving outcomes for the rural poor depends on increasing agricultural productivity, raising the performance of input and factor markets, increasing the quality of rural infrastructure, and reducing the damage of price distortions, all of which are covered in the research program.

Themes

The research program on agriculture and rural development reflects key operational aims of the World Bank in achieving food security and meeting the growing global demand for food: promoting agricultural development in Africa, land policy, rural infrastructure, rural-urban transformation, community-driven development, climate change and agriculture, and understanding the impact of agricultural price distortions on markets and food supply.

Research on promoting agricultural development in Africa asks why Africa failed to have the type of green revolution that transformed agriculture and the economy more generally in Asia, and what might be done to bring about a similar transformation in Africa. Recognizing that secure access to land is key to agricultural productivity the research on land policy examines approaches to and the benefits of improvements in land tenure arrangements. Research on rural infrastructure examines the benefits, the costs, and the poverty impacts of investments in rural roads, power, and water delivery. Studies on rural-urban transformation consider the costs and other impediments to migration out of agriculture, and the patterns of rural industrialization.

A new policy research report underway on community-driven development examines what has worked well—and not so well—with this approach. Research on agriculture and climate change assesses the impacts of climate change on agriculture and emphasizes the scope for adaptation, and the potential role for agriculture in climate change mitigation.

Agricultural trade and price distortions have historically taxed agriculture heavily in developing countries. Research on distortions to agriculture begins by measuring these distortions, and then seeks to explain the determinants of the level and volatility of these distortions. Related work examines the impact of proposals for liberalization of agricultural trade. Additional research focuses on how local institutions shape the consequences of trade for vulnerable places and people.

Highlights

A low-cost land titling process can bring big payoffs 

Given the challenges of climate change and the new demand for land by global investors, low-cost ways to secure rights and allow better functioning of land markets can have significant payoffs. Many African countries have adopted innovative laws to increase tenure security and investment as well as transferability and productivity, but few have fully implemented them. In a natural experiment to assess the effects of low-cost land titling in Ethiopia, certificates to more than 25 million rural plots have been distributed over a five-year period in a highly participatory way. We find that doing so has significant benefits not only in terms of traditional measures such as increased tree planting and soil conservation investment, but also in terms of resolving disputes and empowering women (who, for example, are able to hold on to land rights in cases of inheritance). These findings have influenced World Bank lending, facilitated significant support by other donors, and prompted the Government to re-think its strategy in this area.1 

Road connectivity is crucial for improving rural welfare

Studies from a number of South Asian countries show that better connectivity of rural areas with growth centers improves rural welfare by reducing transport costs, enhancing inter-regional migration, reducing regional income inequality, and promoting better farm to non-farm linkages in areas with greater agricultural opportunities. Better connectivity also benefits the poor more than the non-poor, which is part of the reason the Bank has a large portfolio of road projects in rural areas. In Bangladesh a World Bank-financed rural road and market improvement project enhanced agricultural output by raising agricultural prices and reducing transportation expenses, and increasing farm and non-farm wages by promoting farm and non-farm employment.2 

Distortions to agricultural incentives impose costs on developing countries

A new global study on agricultural trade distortions greatly increases our knowledge of agricultural trade distortions worldwide and their impacts on developing countries. This study finds that the oppressive taxation of agriculture in developing countries reported in earlier research covering the period to the mid-1980s has almost been eliminated, with the average rate of taxation of developing country agriculture falling close to zero. In some high-income countries the trade-distorting assistance provided to their farmers has also been substantially lowered, reducing the competitive disadvantage of farmers in developing countries. One worrying trend is the move to protect domestic agriculture against imports by many developing countries, with the result that the costly dispersion of agricultural distortions has remained constant over time. Another piece of troubling news—which relates directly to the 2008 food price crisis—is that both developing and high-income countries continue to insulate their domestic markets from year-to-year fluctuations in world prices. While this helps individual countries stabilize their domestic prices relative to world prices, it has contributed to the disturbing volatility of world prices since 2007.3 

A series of new books offer more detailed regional and global views of agricultural trade distortions and their impacts on global food markets.4 

Connecting the dots between trade, vulnerable places, and vulnerable people

Some argue that trade liberalization has raised incomes and improved environmental protection in developing countries, while others claim it generates neither poverty reduction nor sustainability. The detailed case studies in this book demonstrate that neither interpretation is universally correct, given how much depends on specific policies and institutions that determine “on-the-ground” outcomes. Six case studies set in fragile ecologies trace how local policies and practices influence the ways in which international trade affects local livelihoods and the natural resources upon which the poor depend. The studies underscore the importance of evaluating trade through the lens of environmental and social vulnerability and the linkages between poverty reduction and environmental protection. Lessons drawn can help shape policies that mitigate incentives to use natural resources in unsustainable ways, including incentives linked to international trade.5 

William J. Martin, Research Manager, Jun.-Dec. 2009

Peter Lanjouw, Acting Manager, Jan. - May 2009

Amer Ahmed

Daniel Ayalew Ali Aparajita Goyal

Hanan Jacoby

Donald Larson

Hussain Samad

Klaus Deininger 

Maros Ivanic

Shahidur Khandker

Ghazala Mansuri

Forhad Shilpi

 

Notes

1.This work is supported by the Bill & Melinda Gates foundation, and further studies on the impacts of land interventions are underway in other parts of India as well as in Rwanda, Ethiopia, and Ghana.
 

Holden, Stein T., Klaus Deininger, and Hosaena Hagos Ghebru. 2009. “Impacts of Low-Cost Land Certification on Investment and Productivity.” American Journal of Agricultural Economics 91(2): 359–73.

2.Khandker, Shahidur, Zaid Bakht, and Gayatri Koolwal. 2009. “The Poverty Impact of Rural Roads: Evidence from Bangladesh.” Economic Development and Cultural Change 57(4): 685–722.
3.Anderson, Kym, and William J. Martin, ed. 2009. Distortions to Agricultural Incentives in Asia. Washington, DC: World Bank.
 Anderson, Kym, and William Masters, ed. 2009. Distortions to Agricultural Incentives in Africa. Washington, DC: World Bank.
 Anderson, Kym, ed. 2009. Distortions to Agricultural Incentives: A Global Perspective, 1955-2007. Washington, DC: World Bank.
4.A book on the implications of the remaining distortions for inequality and poverty is being published in March 2010. A book on the political-economy determinants of agricultural distortions is forthcoming (Cambridge University Press). The detailed data underlying the studies, together with the underlying country spreadsheets, are available at www.worldbank.org/agdistortions.
5.Cook, Jonathan A., Owen Cylke, Donald Larson, John D. Nash, and Pamela Stedman-Edwards, ed. 2010. Vulnerable Places, Vulnerable People: Trade Liberalization, Rural Poverty and the Environment. Washington, DC: World Bank; North Hampton, MA: Edward Elgar.

 




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