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WDR 2008 - Revival of Agriculture for South Asia's Development

South Asia is Transforming: Revival of Agriculture for Development

South Asia is Transforming: Revival of Agriculture for Development

Overview: Agriculture for Development

October 19, 2007 - South Asian countries are facing an unprecedented opportunity to reduce massive poverty and confront widening rural-urban income disparities, according to World Development Report 2008, entitled "Agriculture for Development", which calls for a revival of agriculture in the region. (WDR 2008 Fact Sheet for South Asia)

In the 21st century, agriculture continues to be a fundamental instrument for sustainable development and poverty reduction. Three of every four poor people in developing countries live in rural areas—2.1 billion living on less than $2 a day and 880 million on less than $1 a day—and most depend on agriculture for their livelihoods. Given where they are and what they do best, promoting agriculture is imperative for meeting the Millennium Development Goal of halving poverty and hunger by 2015 and continuing to reduce poverty and hunger for several decades thereafter.

Agriculture alone will not be enough to massively reduce poverty, but it has proven to be uniquely powerful for that task. With the last World Development Report on agriculture completed 25 years ago, it is time to place agriculture afresh at the center of the development agenda, taking account of the vastly different context of opportunities and challenges that has emerged.

This Report addresses three main questions:
1. What can agriculture do for development?
2. What are effective instruments in using agriculture for development?
3. How can agriculture-for-development agendas best be implemented?

Analysis on the WDR 2008 messages for South Asia

Dina Umali-Deininger, Lead Agriculture Economist for South Asia Region, talks about the messages of the WDR 2008 for South Asia.

Dina Umali-Deininger, Lead Agriculture Economist
Dina Umali-Deininger, Lead Agriculture Economist
  • - What is the main message of the World Development Report 2008 (WDR) for South Asia? (2m:37s) wma
  • - What is the report's main recommendations to spur agriculture growth in the region? (3m:09s) wma
  • - The report suggests that a high-value agricultural revolution is possible in transforming countries. How can this be achieved in South Asia, especially in India? (2m:27s) wma
  • - The report says water scarcity is a growing problem in South Asia. How can South Asian countries increase water productivity? (2m:39s) wma
  • - How is the World Bank involved in assisting South Asian countries to overcome water scarcity? (2m:22s) wma
  • - What is the World Bank's strategy to boost agricultural growth and rural development in South Asia? (3m:27s) wma

What can agriculture do for development?

Agriculture’s contributions differ in the three rural worlds. The way agriculture works for development varies across countries depending on how they rely on agriculture as a source of growth and an instrument for poverty reduction. The contribution of agriculture to growth and poverty reduction can be seen by categorizing countries according to the share of agriculture in aggregate growth over the past 15 years, and the current share of total poverty in rural areas, using the $2-a-day poverty line. This perspective produces three types of countries—three distinct rural worlds:

Agriculture-based countries —Agriculture is a major source of growth, accounting for 32 percent of GDP growth on average—mainly because agriculture is a large share of GDP—and most of the poor are in rural areas (70 percent). This group of countries has 417 million rural inhabitants, mainly in Sub-Saharan countries. Eighty-two percent of the rural Sub-Saharan population lives in agriculture- based countries. (Afghanistan and Nepal are classified as agriculture-based countries.)

Transforming countries —Agriculture is no longer a major source of economic growth, contributing on average only 7 percent to GDP growth, but poverty remains overwhelmingly rural (82 percent of all poor). This group, typified by China, India, Indonesia, Morocco, and Romania, has more than 2.2 billion rural inhabitants. Ninety-eight percent of the rural population in South Asia, 96 percent in East Asia and the Pacific, and 92 percent in the Middle East and North Africa are in transforming countries. (In South Asia, Bangladesh, India, Pakistan, and Sri Lanka are considered transforming countries.)

Urbanized countries —Agriculture contributes directly even less to economic growth, 5 percent on average, and poverty is mostly urban. Even so, rural areas still have 45 percent of the poor, and agribusiness and the food industry and services account for as much as one third of GDP. Included in this group of 255 million rural inhabitants are most countries in Latin America and the Caribbean and many in Europe and Central Asia. 88 percent of the rural populations in both regions are in urbanized countries.

What are effective instruments in using agriculture for development?

Agriculture can be the main source of growth for the agriculture-based countries and can reduce poverty and improve the environment in all three country types, albeit in different ways. This requires improving the asset position of the rural poor, making smallholder farming more competitive and sustainable, diversifying income sources toward the labor market and the rural non-farm economy, and facilitating successful migration out of agriculture.

How can agriculture-for-development agendas best be implemented?

Pursuing an agriculture-for-development agenda for a country implies defining what to do and how to do it. What to do requires a policy framework anchored on the behavior of agents—producers and their organizations, the private sector in value chains, and the state. How to do it, requires effective governance to muster political support and implementation capacity, again based on the behavior of agents—the state, civil society, the private sector, donors, and global institutions.

Recommendations for South Asia

In South Asia, Bangladesh, India, Pakistan, and Sri Lanka are considered transforming countries. Afghanistan and Nepal are classified as agriculture-based countries.

Transforming countries:

• Generate rural jobs by diversifying into the "new agriculture" of high-value products such as fruit, vegetables and dairy products for which there is increasing demand as urban incomes rise.
• Invest heavily in human capital to prepare rural people for better jobs in rural areas and to help them successfully migrate.
• Reduce the environmental footprint of intensive agriculture, confronting acute land and water scarcity, and develop lagging regions.

Agriculture-based countries:

In Afghanistan and Nepal, the main priority is to increase productivity, especially among smallholders whose livelihoods depend strongly on agriculture.

Additional Resources

- Agriculture in South Asia
About 70% of South Asia’s poor live in rural areas. Most depend on agriculture for their livelihood. Agricultural and rural development is key to eradicating poverty and creating conditions for sustainable and equitable growth. (Read More »)

- Blog - End Poverty in South Asia
Shanta Devarajan, World Bank Chief Economist for South Asia, shares insights about the fight against poverty in the region. (Read More »)

- Country Agricultural Briefs
Afghanistan | Bangladesh | Bhutan | India | Maldives | Nepal | Pakistan | Sri Lanka

- South Asia: Development Data
A wide range of social and economic measures on South Asia, including links to the World Bank's most important online development databases. (Read More »)

- South Asia: Analysis and Research
Compilation of all the World Bank's publications on South Asia, with 'search' options and links to analysis and research on other South Asian countries. (Read More »)

- World Bank Program in South Asia
Launching pad to all information on World Bank activities in Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.(Read More »)

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