Beyond Food Production
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Beyond Food Production

The Role of Agriculture in Poverty Reduction

Edited by Fabrizio Bresciani and Alberto Valdés

The importance of agricultural growth to poverty reduction is well known, but the specific channels through which the poor can take advantage of growth require further research. Beyond Food Production takes on this challenge, investigating four important channels: rural labor markets, farm incomes, food prices, and linkages to other economic sectors.
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Chapter 4: Mexico

Isidro Soloaga and Mario Torres

Extract

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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