Contribution of agricultural growth to reduction of poverty, hunger and malnutrition The role of agricultural growth in economic growth, and poverty and hunger reduction

Overall, the role of agricultural growth in reducing poverty is likely to be greater than its role in driving economic growth. This is likely to be the case because the share of the labour force that works in the agriculture sector is much larger than the share of economic output that comes from agriculture. For the least-developed countries, the share of the total economically active population in agriculture was 66 percent in 2009, more than double the share of agriculture in GDP. The implication is that the people who work in agriculture tend to have lower incomes, which is consistent with the fact that poverty is concentrated in rural areas. Because so many of the poor work in agriculture, agricultural growth is more likely to involve and benefit the poor than is non-agricultural growth. A recent detailed analysis of data on cross-country growth experience has shown that, provided income inequality is not excessive, agricultural growth reduces poverty among the poorest of the poor.36 In resource-poor low-income countries (excluding sub-Saharan Africa), a given rate of GDP growth due to agricultural growth reduces poverty five times more than does an identical dose of GDP growth due to non-agricultural growth. In sub-Saharan Africa, agricultural growth is 11 times more effective. Thus, raising agricultural production and productivity remains crucial for reducing poverty in a costeffective manner, especially in low-income countries. The ability of agriculture to generate overall GDP growth and its comparative advantage in reducing poverty will vary from country to country. In this regard, a typology introduced in the World Development Report 2008 (see Table 1) stresses that in agriculture-based economies (most of them in subSaharan Africa), agriculture contributes significantly to economic growth, and, because the poor are concentrated in rural areas, it will also contribute significantly to poverty reduction.37 The key policy agenda in these countries is to enable agriculture to work as an engine of growth and poverty reduction. In transforming economies (mainly in Key message