Agriculture as an Engine of Growth and Poverty Reduction: What We Know and What We Need to Know

"One view, is that the agricultural sector is simply a reservoir of unemployed or underemployed labor, with low incomes and living standards, from which people must eventually be moved by economic growth in the non-agricultural economy. The alternative view is that the agricultural sector itself must generate the growth that will eventually release labor and other resources. This paper will consider both of these viewpoints, along with various shadings in between. It will also address a series of “big picture” questions involving agriculture’s role in development. Is agricultural growth necessary for economic growth and poverty reduction? Will investments in the agricultural sector have high social returns? If so, what kinds of investments are likely to have the highest payoffs? Are there important tradeoffs within the agricultural sector between growth and poverty reduction? This paper does not claim to be comprehensive; the literature on agricultural development is vast (and of varied quality), and on some points there is little professional consensus. Nevertheless, the paper will offer a survey of relevant literature, including both theory and empirical studies. It will also touch briefly on the policy literature, which has focused on a somewhat different set of issues than the academic literature."