The RuralStruc Program on the ‘Structural Dimensions of Liberalization in Agriculture and Rural Development’ is a four-year (2006-2010) cross-regional research work conducted under the Sustainable Development Department of the World Bank.
The purpose of the RuralStruc Program is to better understand the implications of liberalization and economic integration for agriculture and rural development in developing countries. The Program adopts a broad approach that focuses on the overall consequences of globalization in terms of increasing competition, market integration and governance. Further, it explores how changes in rural environments brought about by these dynamics in turn affect patterns of structural transformation. Specifically, the Program examines trajectories of structural change among developing countries and seeks to identify similarities or differences through comparative analyses.
The Program focuses on seven countries corresponding to different stages in the process of structural transformation and economic integration. Mexico, an upper-middle income country that has undergone significant structural transformation and a deep economic integration through the implementation of NAFTA was chosen as a reference point. The sub-Saharan African (SSA) countries of Senegal, Mali, Kenya and Madagascar illustrate cases of countries facing difficult structural challenges (in both economic and demographic transitions). Morocco and Nicaragua represent countries at an intermediate level of economic transition which are currently undergoing strong integration processes.
The work unfolds along three lines of investigation: (i) vertical and horizontal integration and their impact on differentiation among agricultural structures; (ii) how rural households adapt to this new context, specifically through engagement in non-farm activities and how these adaptation strategies reshape rural economies; and (iii) the risks of structural impasses in demographic and economic transitions that stem from the challenges of globalization.
The implementation and development of the Program were made possible by contributions from:
The results of the Program are already contributing to the debate within the donor community, academia, and national governments about the difficulties of rural change and policy options to facilitate it.
Implementation and Results
In order to engender ownership of the knowledge process, the program’s implementation strategy was based on local partnerships which aimed at improving the policy debate.
The Institutional counterparts were: the Ministries of Agriculture in Kenya, Mali, Mexico, Nicaragua, and Senegal; the Conseil Général du Développemen Agricole (CGDA) in Morocco; and the Programme d’Action pour le Développement Rural (PADR) in Madagascar.
The Contributing partners were:
Two dedicated bodies were in charge of the governance of the Program. A Steering Committee, which included all donors, was responsible for overseeing Program activities and budget execution.
An Advisory Committee, consisting of academics and researchers from six countries, provided guidance on the orientation of the Program and engaged in a series of collaborative discussions contributing to the final results.< /br>
The Program consists of two main phases and a dissemination process.
- the first phase (April 2006 to June 2007) conducted comparative desk reviews of existing information, which were intended to offer country-level briefs on the trajectory of structural change in agriculture, and the consequences on the rural economy. The launching workshop of the 1st phase was held in M’Bour, Senegal, in April 2006, and a second workshop took place in Marrakech, Morocco, in November 2006, to discuss the first results.
- the second phase (September 2007 to June 2009) was dedicated to more detailed regional case studies. Field work, including value chains overviews and rural household surveys (8,000 households were interviewed in 26 regions), was conducted to specifically target income levels and sources. Regional launching workshops were held between September and November 2007 in Senegal, Kenya, Madagascar, and Mexico, and a general discussion workshop was organized in Gorée, Senegal, in June 2008, just after the field work.
The end of 2009 and 2010 were devoted to the completion of the national reports and the preparation of a synthesis report presenting the Program’s overall results. A dissemination process was begun in 2010 with national workshops in Mali and Senegal, and will continue throughout 2011. A modified version of the final synthesis report will be published as a book in the AFD / World Bank Africa Development Forum series at the end of 2011.
- The overwhelming majority of rural households in the survey have farms (93%of the sample and 98% in sub-Saharan Africa), but among them the spread of integration and contractualization processes linked to the global restructuring of agro-food markets remains limited (less than 5% of farms in sub-Saharan Africa). These processes principally occur downstream in value chains and seldom at the producer level. Consequently, many farm households have not been able to take advantage of the opportunities offered by globalization and they remain poor.
- In sub-Saharan Africa, the level of rural poverty is striking (75% of the surveyed households in average earn less than $2 PPP / person / day and near 90% in Mali). Farm households are in general unable to profitably sell their produce, for reasons either of extreme need, low prices, or lack of market access. Consequently, they try to increase their incomes by taking on additional work off the farm. This labor diversification however pays very poorly and households remain dependant on the family plot. The result is an agricultural economy that, at first glance, looks to be diversifying, but in fact is engaged in coping strategies. 86% of the surveyed households have some off farm work. Nevertheless, the large majority of them grow staples and self-consume, and on-farm activities continue to provide the main share of household incomes. The most profitable option is migration to OECD countries but very few households are able to benefit from this alternative.
- In Morocco and Nicaragua, only 30% - 40% of the surveyed households earn less than $2 PPP / person / day (10% in Mexico). The poorest households, however, struggle. Like households in sub-Saharan Africa, they have difficulty earning an income from farming and look to non-farm activities as a way of alleviating poverty. The difference however is that outside of sub-Saharan Africa the returns to off-farm activities are higher and, therefore, the level of risk faced by households is lower. This allows household more room for maneuver and facilitates innovative practices in terms of production, technical choices or progressive specialization in off-farm activities.
- There is a strong relationship between income and diversification which determinates the pace and extent of rural transformation. Growing incomes help rural households to switch progressively from coping strategies to specialization in diverse economic activities, and this process fosters the transition from a deep involvement in agriculture towards more diversified regional economies.
Policy Orientations for sub-Saharan Africa:
- In sub-Saharan Africa, sound public policies are needed to help this process and to compensate for the lack of investment capacity of most of rural households. These policies must facilitate farm income growth through productivity increases and improved market access. They must simultaneously promote new activities through the provision of public goods and the strengthening of economic functions of intermediate regional cities and rural towns.
- This policy support is essential to face the challenges of an incipient economic transition and an unachieved demographic transition. In the next fifteen years, sub-Saharan Africa economies will have to absorb 330 million youth into the labor market, a market where today 65 to 75% of the labor force is still occupied in agriculture. The remaining labor force is mainly engaged in the informal urban sector and economic alternatives are limited in the near future.
- Consequently, agriculture will continue to play a major role and public policies must select the right targets: the overwhelming majority of farm households produce staple crops and this sector can benefit from growing demand and from incentives provided by regional market integration. While it is true that staples often offer a low return, and therefore cannot be the only solution to poverty alleviation, they can clearly serve as a catalyst. Increasing staple production can significantly reduce a household’s food-risk and unlock their economic potential.
- The road to success will imply a major reinvestment in development strategies, based on sound diagnoses that are capable of dealing with a very strong heterogeneity of regional situations (a final major finding of the Program). Responding to this challenge will necessitate supporting the improvement of policy making capacity at the local and national levels.
For additional information about the RuralStruc Program, please contact:
The World Bank / RuralStruc Program
1818 H Street NW (Mail stop: J8-802)
Washington, DC. 20433
Bruno Losch (Task Team Leader)
Michael Morris (Program Coordinator, ARD Africa)
Germaine Ethy (Program Assistant)