Beyond Agriculture versus Nonagriculture: Decomposing Sectoral Growth–Poverty Linkages in Five African Countries

Africa’s development debate is often cast as “agriculture versus non-agriculture”, with agriculture’s proponents arguing that agricultural growth is more effective at reducing poverty. This “dual economy” perspective overlooks the heterogeneity within and synergies between these two broad sectors. Recent studies decompose agriculture into subsectors and find that agricultural growth led by smallholder farmers is even more effective at reducing poverty than larger-scale estate farms. In contrast, few studies estimate subsectoral growth–poverty linkages for non-agriculture. Yet we strongly expect, for example, that growth led by informal traders or foreign-owned mining companies will have quite different implications for poverty reduction. Different perspectives on what constitutes “non-agriculture” might therefore explain divergent views on its relative importance for poverty reduction. To address this gap in our understanding, we estimate sectoral poverty–growth elasticities using economy-wide models for five African countries. While our estimated elasticities are higher for agriculture than for non-agriculture as a whole, the extent to which this is true varies considerably across nonagricultural subsectors (and across countries). We find that the poverty–growth elasticities for trade and transport services and manufacturing, especially agro-processing, are often close to, and sometimes exceed, agriculture’s. This means that growth led by these nonagricultural subsectors might be as effective as agriculture at reaching the poor. This confirms the need for a more nuanced treatment of non-agriculture in Africa’s policy debate, and may explain conflicting perspectives on agriculture’s role vis-a-vis non-agriculture.

[1]  S. Klasen,et al.  Determinants of the Growth Semi-Elasticity of Poverty Reduction , 2008 .

[2]  H. Khan Sectoral Growth and Poverty Alleviation: A Multiplier Decomposition Technique Applied to South Africa , 1999 .

[3]  M. Ravallion,et al.  Measuring changes in poverty : a methodological case study of Indonesia during an adjustment period , 1991 .

[4]  L. Unnevehr,et al.  Food Safety and Developing Markets: Research Findings and Research Gaps , 2014 .

[5]  L. Christiaensen,et al.  Urbanization and Poverty Reduction -- the Role of Rural Diversification and Secondary Towns , 2013 .

[6]  The Economywide Effects of Teff, Wheat, and Maize Production Increases in Ethiopia: Results of Economywide Modeling , 2014 .

[7]  F. Roubaud,et al.  Employment, Unemployment, and Working Conditions in the Urban Labor Markets of Sub-Saharan Africa: Main Stylized Facts , 2015 .

[8]  E. Sadoulet,et al.  Estimating the Relative Benefits of Agricultural Growth on the Distribution of Expenditures , 2017, World Development.

[9]  S. Dercon Rural Poverty: Old Challenges in New Contexts , 2009 .

[10]  A. Suryahadi,et al.  The effects of location and sectoral components of economic growth on poverty: Evidence from Indonesia , 2009 .

[11]  L. You,et al.  Variable Returns to Fertilizer Use and Its Relationship to Poverty: Experimental and Simulation Evidence from Malawi , 2014 .

[12]  S. Klasen,et al.  Determinants of Pro Poor Growth: Analytical Issues and Findings from Country Cases , 2007 .

[13]  Jean-François Maystadt,et al.  Do Girls Pay the Price of Civil War: Violence and Infant Mortality in Congo , 2014 .

[14]  E. Thorbecke,et al.  A multiplier decomposition method to analyze poverty alleviation , 1996 .

[15]  P. Hazell,et al.  The Future of Small Farms: Trajectories and Policy Priorities , 2010 .

[16]  Neha Kumar,et al.  Land Rights Knowledge and Conservation in Rural Ethiopia: Mind the Gender Gap , 2014 .

[17]  A. Valdés,et al.  The Agrarian Reform Experiment in Chile: History, Impact, and Implications , 2014 .

[18]  Paul Collier,et al.  African agriculture in 50 years: smallholders in a rapidly changing world? , 2009 .

[19]  D. Headey,et al.  The Nutritional Returns to Parental Education , 2014 .

[20]  X. Zhang,et al.  The patterns of patents in China , 2014 .

[21]  M. Cipollina,et al.  The tide that does not raise all boats: an assessment of EU preferential trade policies , 2014 .

[22]  Norman V. Loayza,et al.  The Composition of Growth Matters for Poverty Alleviation , 2006 .

[23]  T. Benson,et al.  Assessing Progress Made Toward Shared Agricultural Transformation Objectives in Mozambique , 2014 .

[24]  Yanyan Liu,et al.  The Political economy of MGNREGS spending in Andhra Pradesh , 2014 .

[25]  X. Diao,et al.  Economics of Tractor Ownership Under Rainfed Agriculture with Applications in Ghana , 2014 .

[26]  J. Thurlow,et al.  The role of agriculture in African development. , 2010 .

[27]  J. Thurlow,et al.  Social accounting matrices and multiplier analysis: An introduction with exercises , 2009 .

[28]  D. Bezemer,et al.  Agriculture, Development and Urban Bias , 2007 .

[29]  Sherman Robinson,et al.  Updating and Estimating a Social Accounting Matrix Using Cross Entropy Methods , 2001 .

[30]  K. Derviş,et al.  General equilibrium models for development policy , 1982 .

[31]  Channing Arndt,et al.  Biofuels, poverty, and growth: a computable general equilibrium analysis of Mozambique , 2009, Environment and Development Economics.

[32]  X. Zhang,et al.  Does Rice Farming Shape Individualism and Innovation? A Response to Talhelm et al. (2014) , 2014 .

[33]  J. Thurlow,et al.  Agriculture and small towns in Africa , 2013 .

[34]  E. Díaz-Bonilla On Food Security Stocks, Peace Clauses, and Permanent Solutions after Bali , 2014 .

[35]  D. Martimort,et al.  Two-Tier Asymmetric Information as a Motive for Trade, Trade Policies, and Inefficient Trade Agreements , 2014 .

[36]  F. Tarp,et al.  Explaining the Evolution of Poverty: The Case of Mozambique , 2012 .

[37]  Alain de Janvry,et al.  Agricultural Growth and Poverty Reduction: Additional Evidence , 2010 .

[38]  X. Diao,et al.  Towards Understanding Economic Growth in Africa: A Reinterpretation of the Lewis Model , 2014 .

[39]  C. Ringler,et al.  Agriculture, Incomes, and Gender in Latin America by 2050: An Assessment of Climate Change Impacts and Household Resilience for Brazil, Mexico, and Peru , 2014 .

[40]  N. Islam Evidence-Based Research and its Effect on Policymaking , 2014 .

[41]  鳥居 泰彦,et al.  世界経済・社会統計 = World development indicators , 1998 .

[42]  P. Collier,et al.  African Agriculture in 50Years: Smallholders in a Rapidly Changing World? , 2014 .

[43]  Jenifer Piesse,et al.  The Impact of Research Led Agricultural Productivity Growth on Poverty Reduction in Africa, Asia and Latin America , 2003 .

[44]  Nicola Cenacchi Drought Risk Reduction in Agriculture: A Review of Adaptive Strategies in East Africa and the Indo-Gangetic Plain of South Asia , 2014 .

[45]  J. Thurlow,et al.  A recursive dynamic computable general equilibrium model. , 2012 .

[46]  J. Thurlow,et al.  The Political Economy of Zambia's Recovery: Structural Change without Transformation? , 2014 .

[47]  Luc Christiaensen,et al.  The (Evolving) Role of Agriculture in Poverty Reduction: An Empirical Perspective , 2011 .

[48]  James Thurlow,et al.  Strategies and priorities for African agriculture: Economywide perspectives from country studies , 2008 .

[49]  Martin Ravallion,et al.  How important to India's poor is the sectoral composition of economic growth? , 1996 .

[50]  Louise J. Cord,et al.  Delivering on the Promise of Pro-Poor Growth : Insights and Lessons from Country Experiences , 2006 .

[51]  G. Duranton,et al.  The Development Push of Refugees: Evidence from Tanzania , 2014 .

[52]  Not All Growth is Equally Good for the Poor: The Case of Zambia , 2006 .

[53]  S. Dercon,et al.  Agriculture in African Development: Theories and Strategies , 2014 .

[54]  J. Hoddinott,et al.  Understanding the Rapid Reduction of Undernutrition in Nepal, 2001–2011 , 2014, PloS one.

[55]  Anil K. Bhargava The Impact of India's Rural Employment Guarantee on Demand for Agricultural Technology , 2014 .

[56]  P. Hazell Elmhirst Lecture, 27th International Conference of Agricultural Economists, Foz do Iguaçu, Brazil August 2012 : Options for African Agriculture in an Era of High Food and Energy Prices , 2012 .

[57]  D. Bevan,et al.  Rural–Urban Linkages, Public Investment and Transport Costs: The Case of Tanzania , 2016, World Development.

[58]  J. Hoddinott,et al.  Costing alternative transfer modalities , 2014 .

[59]  J. Thurlow,et al.  Can Cities or Towns Drive African Development? Economy-wide Analysis for Ethiopia and Uganda , 2014 .

[60]  Shashidhara Kolavalli,et al.  Strategies to Control Aflatoxin in Groundnut Value Chains , 2014 .

[61]  Robert McDougall,et al.  Global trade, assistance, and production : The GTAP 5 Data Base , 2002 .

[62]  What Dimensions of Women’s Empowerment in Agriculture Matter for Nutrition-Related Practices and Outcomes in Ghana? , 2014 .