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Ending Poverty and Hunger by INVESTING in AGRICULTURE and RURAL AREAS CONTENTS Ending poverty and hunger by INVESTING IN AGRICULTURE AND RURAL AREAS CONTENTS PAGES 4-5 THE CONTEXT PAGES 6-7 THE NEXUS BETWEEN AGRICULTURE AND POVERTY REDUCTION PAGES 8-9 NOT ONLY AGRICULTURE: THE MULTIPLE PATHWAYS OUT OF POVERTY PAG E S 10 -11 STRATEGIC INVESTMENTS FOR ACHIEVING SDG 1 AND SDG 2 PAGES 12-13 FAO SUPPORT TO PRO-POOR AND RESPONSIBLE INVESTMENTS PAGES 14-18 EXAMPLES OF STRATEGIC INVESTMENTS FOR POVERTY REDUCTION PAGES 19 REFERENCES VIET NAM A worker weeding an Cover photo: Fishermen in Inle Lake, Myanmar Acacia tree nursery. ©FAO/Joan Manuel ©FAO/Paulina Prasuła 2 Baliellas KEY MESSAGES ➨ Investing in the agricultural people, including smallholders ➨ Private sector investments sectors is key to eradicating and family farmers, to increase have a strong role to play in poverty, hunger and malnutrition, their productivity and income helping create markets for the particularly in rural areas in the context of mitigation and poor, adding value to primary where most of the world’s adaptation to climate change. agricultural products, lowering poorest live. Investments need the costs of technologies and to simultaneously 1) increase ➨ Investment in agriculture and services and fostering decent rural small-scale farmers’ productivity rural areas will need to increase employment. and income; 2) diversify farmers’ substantially to achieve the income through value chain Sustainable Development Goals ➨ Rural investment, pro-poor development; and 3) create more (SDGs) of eradicating poverty and policies, social protection and and better jobs for the rural poor. hunger by 2030 and to feed an strengthened rural institutions additional two billion people by create the necessary positive ➨ In addition to investing in 2050. climate for family farmers, agriculture, reducing poverty small-scale producers and poor also requires investing in ➨ Public sector investment rural people to invest in their rural non-farm economies, is key in eradicating poverty businesses and build sustainable, strengthening rural institutions because it provides public goods income-generating activities. and organizations, and such as agricultural research expanding the coverage of social and extension, education, policies social protection, basic infrastructure and services infrastructure and public services. usually not supplied by the FAO helps countries improve private sector. The public sector “FREEING THE access to technologies, services also provides crucial incentives and markets, as well as access to for the regulation of sustainable WORLD OF and sustainable management of management of natural resources. natural resources for poor rural HUNGER AND EXTREME POVERTY IS OUR FIGHT. NO ONE MUST BE LEFT BEHIND." José Graziano da Silva, FAO Director-General 3 ENDING POVERTY AND HUNGER BY INVESTING IN A GRICULTURE AND RURAL AREAS THE CONTEXT While there has been and rural areas have remained to US $22 billion although only an unprecedented stagnant or have declined in most part of this sum materialized. achievement in poverty developing countries, particularly However, investment momentum in Sub-Saharan Africa and South has subsided in recent years. While reduction in the last three Asia, where poverty and hunger food production will need to decades, eradicating are most prevalent (FAO, 2012). double to feed an additional extreme poverty and With the adoption of the new two billion people by 2050, 2030 Agenda for Sustainable growing demand for agricultural halving poverty by Development, countries have products will increase pressure on 2030 are still two of our renewed their commitment to fight already severely degraded natural greatest challenges. poverty, hunger and malnutrition, resources. recognising that equitable and sustainable growth and inclusive Investments today need to take Today, about 767 million people structural transformation are key to into account natural resource continue to live in extreme achieving sustainable development conservation and sustainable poverty. Roughly, two thirds of the and lifting people out of poverty. agricultural production, including extreme poor live in rural areas, investing in climate-smart and the majority are concentrated The 2030 Agenda is thus an technologies (FAO, 2016). To achieve in Sub-Saharan Africa and South opportunity to focus public and SDG 1 (No Poverty) and SDG 2 Asia (World Bank, 2016). private investments in reaching the (Zero Hunger), each country and poorest of the poor, particularly region will have to evaluate its own Furthermore, progress in reducing in rural areas of the developing pathways out of poverty; however, poverty has not been synonymous world. This task will not be simple country experiences suggest with economic and social equality, and will require changing the way that both social and economic demonstrating that economic we think and act in relation to interventions are equally important growth in the last decades has rural development. in reducing poverty (Marniesse and not been inclusive enough. For Peccoud, 2003). Economic growth example, the poorest of the poor Achieving the Sustainable (e.g. in agriculture) is not enough. have not seen their livelihoods Development Goals will require a To promote rural development and improve in the last 30 years significant increase in the quantity inclusion, countries must take (Ravallion, 2016). While inequality and quality of investment in specific policy and programmatic among countries has narrowed, agriculture and rural areas. Almost actions that reach the poor within-country inequality has a decade ago, in 2009, the G8 directly. This should include a increased between rural and urban countries pledged US $20 billion to combination of social and economic areas and between genders. agricultural development at their policies that address today’s summit in L’Aquila, Italy. These challenges and enable and empower In the past 30 years, private and pledges increased at the Pittsburgh rural people to earn a living and public investments in agriculture G20 summit of the same year shape their livelihoods (IFAD, 2016). 4 TANZANIA A farmer is working in a rice field © FAO/Daniel Hayduk TODAY, ABOUT 767 MILLION PEOPLE CONTINUE TO LIVE IN EXTREME POVERTY. 5 ENDING POVERTY AND HUNGER BY INVESTING IN A GRICULTURE AND RURAL AREAS THE NEXUS BETWEEN AGRICULTURE AND POVERTY REDUCTION problems faced by poor family ■ input, credit and product markets Economic growth that focuses farmers and small scale must ensure that all farms have on agriculture and that increases producers as well as those faced access to the necessary, modern the incomes of poor family by larger, more commercially farm inputs and receive similar farmers and landless labourers is oriented farms; prices for their products; particularly effective in reducing poverty (Rosegrant and Hazell, ■ new technologies must be ■ the rural labor force must be able 2001). suitable and profitable for all to migrate to access employment farm sizes; in agriculture or diversify into Evidence shows that investment rural non-farm activities; and in agriculture is more effective in reducing poverty, particularly ■ policies must not discriminate amongst the poorest people, than against agriculture in general investment in non-agricultural INVESTMENT IN and family farmers in particular sectors. AGRICULTURE IS (Rosegrant and Hazell, 2001). It is also up to 3.2 times better at By implementing inclusive reducing poverty in low-income and MORE EFFECTIVE economic and social policies, the resource-rich countries (including IN REDUCING public sector has an important those in sub-Saharan Africa) at role in ensuring that the above least when societies are not unequal POVERTY, conditions exist relative to (Christiansen et al., 2010). However, agricultural investment. Through agriculture is a broad sector and PARTICULARLY public investment, countries not all investments lead to poverty AMONGST THE provide public goods such as reduction. agricultural research and extension, POOREST PEOPLE, infrastructure and services, as well For the rural poor to benefit from as regulation and incentives for the agricultural growth: THAN sustainable management of natural INVESTMENT IN resources and for protecting tenure ■ land and access to natural rights. Public investment should resources must be more NON- also support policies to guarantee equitably distributed; health, education and social AGRICULTURAL protection for the rural population, ■ publicly financed agricultural SECTORS. including for the poorest of the research must focus on the poor. 6 BANGLADESH A fisher boy drying fish ©FAO/Zakir Hossain Public investment can stimulate women, landless workers ■ Improving market infrastructure the positive conditions on the and other groups facing in the most vulnerable and ground that can attract further substantial risk of exclusion; poorest communities (i.e.: private investment, both from the investing in roads, electricity rural households themselves and ■ Supporting the development grids, connectivity, storage from the corporate private sector. of membership-based and warehousing capacity, The latter has a multiplier effect on farmers’ organizations and rural and wholesale markets, the local economy. These benefits their professionalization and footpaths, bridges, schools include generating demand for building business models and other buildings, irrigation food and other rural goods and for farmers’ organizations to and drainage, water supply services. This in turn creates more better access markets; and sanitation, energy,
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