Agricultural Productivity and Poverty Reduction: Linkages and Pathways

 Growth in the productivity of staple nontradable food production is associated with consumption increases or poverty reduction across a number of settings, although the study of these relationships is complicated by the specific market dynamics that determine food prices. The relationship between productivity growth in tradable or export-oriented production and poverty alleviation is less clear.  Many studies suggest that lower food prices appear to be a key mechanism through which productivity increases translate into poverty reduction. Declines in real food prices underlie much of the poverty reducing impacts of the green revolution in Asia; lower food prices also appear associated with gains in energy supply and nutrition.  The evidence suggests that agricultural productivity growth is associated with increases in the demand for farm labor and that real wage rates tend to rise with agricultural growth.  Multiplier effects from agricultural productivity growth appear to occur through consumption linkages and are often oriented towards the nontradable, local economy.