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Agricultural Policies for Poverty Reduction

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With more than two-thirds of the world’s poor living in rural areas, higher rural incomes are a pre-requisite for sustained poverty reduction and reduced hunger. This volume sets out a strategy for raising rural incomes which emphasises the creation of diversified rural economies with opportunities within and outside agriculture. Agricultural policies need to be integrated within an overall mix of policies and institutional reforms that facilitate, rather than impede, structural change. By investing in public goods, such as infrastructure and agricultural research, and by building effective social safety nets, governments can limit the role of less efficient policies such as price controls and input subsidies.

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Distributional Impacts of Commodity Prices in Developing Countries

In this chapter, household production and consumption data are combined with national price data to simulate the welfare effects of increases in staple prices. The focus is on the rural sectors of nine developing countries and on six types of staple crops. The results show that since most rural households are net buyers of staples, they stand to lose from higher staple prices in the short run. However, simulations of the 2007/2008 food price crisis suggest that the magnitude and timing of the welfare shocks depended heavily on the type of crops produced and consumed by each rural household. Simulations up to 2018 suggest higher future prices threatening welfare, but also creating opportunities for those who can increase staple production.

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