OECD Synthesis Report Explores Role of Agricultural Sector in Poverty Reduction
August 2011: The Organisation for Economic Co-operation and Development (OECD) has published a Synthesis Report comparing the role of the agricultural sector in poverty reduction in 25 developing countries that have achieved exceptional progress in reducing poverty, in order to understand why some countries are doing better than others.
The report investigates: whether agriculture is more important than other sources of earned income in reducing poverty in successful countries; whether such countries are similar in other ways; and which government policy actions have contributed most. The report identifies three main factors that contribute to poverty reduction: growth in the agricultural sector; remittances; and growth in non-agricultural labor productivity.
With regard to the role of agriculture, the report finds that the greater share of poverty reduction achieved in the study countries was due to growth in agricultural GDP/worker; that agriculture is the main driver of poverty reduction even for middle income countries; and agriculture‘s contribution was also significant for the relatively poor sub-group of countries.
On remittances, the report concludes that these were the most important contributor to poverty reduction in poorer countries, while being more important than than growth in non-agricultural incomes in all countries. Growth in non-agricultural productivity was found to have contributed directly to poverty reduction only for the relatively well-off countries.
The report investigates the reasons for these findings including the role of public spending and government policies with regard to the agricultural sector, concluding that policy reform and public spending on public goods that benefit the agriculture sector are more effective in reducing poverty than direct cash transfers geared toward the agricultural sector. [Publication: OECD Synthesis Report on Agricultural Progress and Poverty Reduction]