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Review of the paper: Timmer, C.

Peter, 2005 Agriculture and Pro-Poor growth, Centre for


Global Development, Working Paper.

The reasons why agriculture is back on the policy agenda in most of the countries are
revolutions in the genetically modified technologies of crops, supermarket revolutions in the
developing countries that have aggravated the need for supply chain management, and an
understanding that poverty reduction is possible only with economic growth, (which in turn is
possible only with agricultural growth).
Structural transformation of any economy is only possible with structural transformation in
its agriculture sector. This leads to a higher productivity in agricultural sector, that provides
food, labor and also savings for the process of urbanisation and industrialisation.
Timmer highlights that agricultural growth not only increases farm incomes, but also
stimulate non-farm linkages, as it demands non-farm inputs, supplies raw materials to
industries and also create high demand for non-farm consumables.
He lists out the diversification steps in the process of agricultural transformation. The first
step being diversification from staple food crops to high value crops as this will be the basic
linkage between the farm and non-farm sectors and it results in value addition. The second
step is moving onto value added supply chains, catering to the needs of supermarket, modern
food retailsector, etc. The next step is to diversify the rural economy itself to include the
industrial and service sectors. When this rural diversification is not economically feasible due
to competitive pressures from world markets (that result from good infrastructure), then
migration from rural to urban areas facilitate transition.
The fact that agricultural multiplier larger than one tends to increase the growth in
agricultural sector and in the growth in the economy as a whole. In Africa it was between 2 to
3 and even in Asia, during the initial stages to development, the agricultural multiplier was
close to 2. This had a prolonged impact in reducing poverty in these regions. However the
potential impacts of larger agricultural multipliers, aregenerally negated by the market
failures and political biases in some countries led to the systematic under-valuation of output
from the agricultural sector.
The author discusses about the Lewis linkages where the labour and capital freed up in the
agricultural sector through higher productivity in agriculture, get transferred or employed into
other sectors thereby contributing to economic growth. He also discusses about the
Johnston- Mellor linkages that allows for input-output interaction between agriculture and
industry in the form of supply of raw materials to industry, food for industrial workers,
market for industrial goods, and exports to earn foreign exchange to import capital goods.
He then talks about the Mosher(1966) ideology that getting agriculture moving should be
the priority for national plans in countries. This was taken care in countries of east and south
east Asia, that went through phases of green revolution, however countries of Latin America
and Africa, wanted to jump ahead and to create Urban development before attaining rural
development.
The four country case studies of India, Bangladesh, Vietnam and Indonesia, suggests that
excluding India, in the rest of the three countries, agricultural growth has contributed
extensively in the poverty reduction, while in India, it has been the industry and tertiary
sector that has resulted in poverty reduction. However in India, the pressure of population in
rural agricultural sector is far too high. But the counter example of agriculture growth being a
significant impact for economic growth and for poverty reduction has been seen in countries
like Japan , Taiwan, Korea, etc. There are round about confusion from all these case studies
whether agriculture growth had been leading towards poverty reduction or not?
The role of agriculture on pro-poor growth can be best understood from the policy agenda
point of view in these countries. The common structure of commercialization of agriculture
that provides surpluses and transformation of non-rural activities, leads to the integration of
agricultural sector into the overall economy.
All of the Asian countries are having a very difficult time transitioning from the food
security to the farm income and on to the rural productivity objective for public policy.
The difficulties are clearest in India and Indonesia, where the preferred policy mechanism is
price protection and input subsidies, not diversification and commercialization. Thus the
policy initiatives of the government play a major role in the transformation and poverty
reduction of the country.
Another large common theme in the role of agriculture in pro-poor growth is the impact of
food prices on poverty. In India, Indonesia, and Bangladesh, higher productivity in the food
crop sector, especially in rice production, led to lower relative food prices in both rural and
urban areas, with very substantial impact on the poor. The India and Bangladesh case study
papers argue that this mechanism may have been the leading contribution of agriculture to
pro-poor growth.
Despite the initial conditions faced by the East and South East Asian countries, during the
green revolution (like the high pressures and problems like population pressures against
available arable land, poorly educated and overwhelmingly rural populations, with
widespread and deep poverty), the success of Green revolution and from it of agriculture as
the engine of pro-poor growth was achieved to a certain extent though there are regional
disparities within countries.
The same and similar circumstances are faced by the Countries in south Africa and central
Asia as areas with low productivity are low population density areas, huge investments in
rural infrastructure is prohibitively expensive, the real prices of agricultural commodities are
now low, etc. In combination, the initial conditions facing the currently poorest countries
(and regions), precisely those by-passed by the first green revolution, are far more difficult
than those facing the successful countries in East and Southeast Asia. This leads to an
obvious question whether agricultural development is now too expensive in these countries.
However one important point Timmer makes is that, the policy agenda of the state must be
towards the development of agriculture at first and then throughout, if any country wants to
grow. The agenda of getting agriculture moving suggests this.
The controversies however exist. Comparison of different countries case studies just under
the name that they are underdeveloped makes it too complex to analyse. There exists not only
cultural and social differences, but also types of soil differ within these countries. In spite of
this limitation, the study highlights the fact that an active role on the part of the state towards
the development of the agriculture.