Transcript No Slide Title

THE REAL CONTRIBUTION OF
AGRICULTURE:
ITS IMPACT ON PLANNING THE DEVELOPMENT
OF SUSTAINABLE AGRICULTURE
Executive Director – CARDI
Presented by
Francis Asiedu
Manager, Technical Services
FANRPAN Regional Policy Dialogue & Annual General Meeting
Maputo, Mozambique
31 August – 4 September 2009
CARDI - Improving Lives Through Agricultural Research
P RESENTATION O UTLINE
• Introduction
• World Bank report on agriculture for development
• Popular view of agriculture
• Objectives of paper
• Real value in agriculture – Study by IICA
• GDP contribution – Agriculture and Agri-food vs. Primary
agriculture
• Agricultural linkages
• Agriculture’s multiplier effects
• Impact on planning for sustainable development of
agriculture
I NTRODUCTION
World Bank report on agriculture for development
The World Bank in its World Development Report,
2008, Agriculture for Development states:
“In the 21st century, agriculture continues to be a
fundamental instrument for sustainable
development and poverty reduction
To achieve this there is the need for the:
• Introduction of more sustainable production systems
• Innovative policy initiatives and strong political
commitment
• Improvement in local, national and global governance”
I NTRODUCTION
Popular view of Agriculture
 Importance attached to agriculture, generally, is weak
in most developing countries
o This apathy may be due to or may have contributed
to the decline in agricultural production
 Contribution of agriculture to nation building is
measured by an agricultural GDP that is generally low
o Result: Difficulty for agricultural practitioners,
including Ministers, to successfully seek the
necessary resources and /or political will and support
I NTRODUCTION
Objectives of Paper
 This paper:
o Highlights 2004 study by Inter-American Institute for
Cooperation on Agriculture (IICA) that indicates the “real
value” of agriculture
o Suggests ways in which the results could influence
the planning for the repositioning of the sector into
the “New” Agriculture
R EAL VALUE IN A GRICULTURE
IICA Study: Background
 IICA notes:
o Agriculture’s contribution to economic development
undervalued since traditional method used measures
only primary production; ignoring backward and
forward linkages with rest of the economy
o Traditional methodology also ignores the growing
demand for environmental goods and services from
urban centres
o To evaluate its impact on poverty alleviation
strategies, account must be taken of agriculture’s
effects on income distribution among rural and urban
dwellers
R EAL VALUE IN A GRICULTURE
IICA Study: Methodology
 Used Social Accounting Matrices (SAMs):
o SAMs make it possible to examine the structural links
between production, consumption, trade and the
accumulation and distribution of income
 Eleven countries in original study:
o Argentina, Brazil, Canada, Chile, Colombia, Costa
Rica, Mexico, Peru, United States, Uruguay and
Venezuela
o Subsequently similar study done for Trinidad and
Tobago
IICA Study: Results 1: Contribution to GDP
Selected
Countries
AgGDP
(%GDP)
Agriculture & Agrifood GDP (%GDP)
Ratio
Agriculture
Argentina
4.6
32.2
7.0
Brazil
4.3
26.2
6.1
Canada
1.8
15.3
8.4
Chile
5.6
32.1
5.7
Columbia
8.0
32.1
4.0
Costa Rica
11.3
32.5
2.9
IICA Study: Results 1: Contribution to GDP (cont’d)
Selected
Countries
AgGDP
(%GDP)
Agriculture & Agrifood GDP (%GDP)
Ratio
Agriculture
Mexico
4.6
24.5
5.3
Peru
6.6
31.8
4.8
United States
0.7
8.1
11.6
Uruguay
6.2
34.8
5.6
Venezuela
4.0
20.5
5.1
Trinidad &
Tobago
1.7
3.3
1.9
R EAL VALUE IN A GRICULTURE
IICA Study: Results 2: Agricultural Linkages
 Agriculture - source of inputs for other industries, a
source of foreign exchange, an important generator of
value added and of wealth which remains in rural areas:
o Seventy-four per cent of primary production goes into other
production
o Fifty-three cents of every dollar produced by agriculture is in
the form of value added
o The food and agro-industrial sectors generate 42 cents of
value added for each dollar produced, and they pay 58 cents
for inputs for every dollar in production
o Most of this remuneration stays in the region, with at least,
53 cents of every dollar from primary agriculture remaining in
rural areas
R EAL VALUE IN A GRICULTURE
IICA Study: Results 3: Agriculture’s Multiplier Effects
 Each additional unit demanded from the primary sector
has a strong effect on other sectors. For example:
o In Canada, 3.1 additional units derived output are generated
o In Argentina, as many as 5.5 additional units
R EAL VALUE IN A GRICULTURE
IICA Study: Summary
 The use of SAMs showed that:
o An increase in the GDP of agriculture to its real value
o As an economy develops and diversifies, the primary
agricultural sector loses weight in terms of GDP but develops
strong linkages with the rest of the economy
o Agriculture exhibits very strong backward and forward
linkages within and outside of the sector
o Agriculture supports and promotes the development of rural
areas and hence the quality of rural life
o The sector exhibits strong multiplier effects with other
economic sectors
I M PACT O N P LANNING FO R S USTAINABLE
A GRICULTURAL D EVELOPMENT
IICA Study as Tools for Positive Thought Processes
 The results have provided agricultural stakeholders with
empirical evidence of the industry as a key driver of
development. Therefore, stakeholders must approach the
planning for repositioning of agriculture :
o With confidence
o Must discard the role of mendicants
o Must portray themselves as the efficient and effective Directors
and Managers of a first class industry
o Must be champions of Advocacy for public goodwill, but more so
for political will. The Lilliendal Declaration (Caribbean, 2009)
and the Maputo Declaration (Southern Africa, 2002) are
examples of outcomes of such advocacy
I M PACT O N P LANNING FO R S USTAINABLE
A GRICULTURAL D EVELOPMENT
Concepts in Planning the Repositioning: 1. Value Chain
 This approach
is necessary to
take advantage
of the
backward and
forward
linkages that
are key
elements in the
realization of
the real value
of agriculture
I M PACT O N P LANNING FO R S USTAINABLE
A GRICULTURAL D EVELOPMENT
Concepts in Planning the Repositioning: 2. Working
Together
 The utilization of the Value
chain dictates Working
Together, especially as
Clusters (Building
Trust)
 In the area of R&D, where
CARDI is involved,
Working Together is
implemented through
Research,
Development and
Application Chain
I M PACT O N P LANNING FO R S USTAINABLE
A GRICULTURAL D EVELOPMENT
Concepts in Planning the Repositioning: 4. Accountability
and Transparency
 To facilitate Building
Trust there must be
Accountability &
Transparency
 This requires
Multisectoral
approach where
partners agree on
plans, objectives,
and expected
results and
responsibilities
I M PACT O N P LANNING FO R S USTAINABLE
A GRICULTURAL D EVELOPMENT
Concepts in Planning the Repositioning: 5. “New”
Agriculture
 To facilitate this multisectoral involvement leads to the
final concept, the development of the “New”
Agriculture.
o This is Cabinet responsibility, requiring support to Minister
of Agriculture by entire Cabinet, especially the President /
Prime Minister
o This Cabinet Responsibility paradigm is represented by the
saying “Agriculture is Too Important to be Left in the Hands
of Agriculturalists alone”: A truism for the achievement of
the Real Value of Agriculture and the realization of the
“New” Agriculture
T HANK Y OU AND G OD B LESS !
www.cardi.org