The Role of Agriculture in Poverty Reduction
Edited by Fabrizio Bresciani and Alberto Valdés
4. 4.1 Mexico Isidro Soloaga and Mario Torres INTRODUCTION There has been a lively debate on agriculture’s poverty alleviation role in recent years. Research outcomes vary, depending largely on methodology and data used. For example, Ravallion and Datt (1996) found that agricultural growth has a signiﬁcant eﬀect in reducing not only rural but also urban poverty in India. Similar ﬁndings were reported for the Ivory Coast (Kakwani, 1993) and Indonesia (Thorbecke and Jung, 1996). Some other evidence for India, however, points to weak poverty-alleviating eﬀect of agricultural growth in areas with high inequality in land distribution (Bardhan, 1985; Gaiha, 1987). Thus, diﬀerences in initial conditions alter ﬁndings. There is therefore a strong justiﬁcation for a systematic investigation of the agricultural growth–poverty relationship. This requires identiﬁcation of the main channels through which agricultural growth impacts poverty and an understanding of the conditions under which these channels operate eﬀectively. According to López (see Chapter 2), the main channels through which agricultural growth contributes to poverty reduction are: 1. 2. 3. 4. a general equilibrium eﬀect through the increase of unskilled labour wage rate; an increase in smallholders’ income; higher agricultural output leading to lower food prices; and forward/backward linkage eﬀects which spur non-farm income growth and investment in agro-industries and other downstream activities. Whether these channels exist and their eﬀectiveness when they do, are largely contextual issues. The measurement of agriculture’s eﬀectiveness in reducing poverty and the clariﬁcation...
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