The Role of Agricultural Growth in Reducing Poverty and Hunger: The Case of Tanzania

In recent times, many countries, particularly in Sub-Saharan Africa and Southeast Asia, have been left puzzled by their failure to improve nutritional outcomes despite prolonged periods of rapid economic growth, in some cases accompanied by rising incomes among the poor. The Tanzanian economy is one example of a country that failed to reap the benefits of sustained rapid growth. National gross domestic product (GDP) grew at 6.6 percent per year during 1998–2007, while agricultural growth, often regarded as instrumental in lowering poverty rates in agrarian-based developing countries, averaged a respectable 4.4 percent during the period (MOFEA 2008). Yet, between 2001 and 2007, Tanzania’s poverty rate only fell from 35.7 to 33.6 percent, while the share of the population consuming insufficient calories declined marginally from 25.0 to 23.6 percent (NBS 2010). This raises questions about the nature of the interrelationships among economic growth, poverty, and nutrition, and more specifically, how the structure of growth matters for poverty and nutrition. With respect to the latter, a particularly important question in agrarian-based developing countries, such as Tanzania, is how agricultural growth contributes to overall economic growth, poverty, and nutrition. To address these questions, an economywide model of Tanzania is linked with microlevel poverty and nutrition models to (1) show how the current structure of growth resulted in the weak poverty and nutrition outcomes and (2) examine how accelerated, broad-based agricultural growth can contribute to higher overall growth and more rapid reductions in income poverty and hunger. Finally, this chapter examines more closely the growth, poverty, and nutrition contributions of agricultural subsectors in order to identify priority sectors. (See Box 1 for information on the study’s design.)