Rational But Poor? An Explanation for Rural Economic Livelihood Strategy

Using panel data for six rural sub‐Saharan Africa countries, this article tests two hypotheses: (i) household‐specific staple food price bands resulting from market failures in the presence of liquidity constraints and rainfed agriculture induces rural household specialisation in food crops as an economic livelihood strategy; (ii) specialisation in food crops yields inferior welfare than diversification, and keeps households trapped in poverty. The results lend strong support to both hypotheses, reinforcing the need for public investment in rural infrastructure in order to encourage household livelihood diversification for improved welfare.     

Agricultural Economics and Rural Development: Marriage or Divorce? Presidential Address

Rural development is a growing field of interest, both in policy and conceptual terms. However, it is sometimes loosely defined, and statistical information is therefore often confusing. This paper attempts to clarify some of the concepts involved, and then to explore the relationship between the study of rural development and that of agricultural economics. It is argued that much would be gained by a clearer separation between the economics of land, covering its environmental aspects as well as food production, and that of the rural population and economy. Links between the two certainly exist, but are better recognised individually, by analysts and policymakers alike.     

How do Agricultural Programmes Alter Crop Production? Evidence from Ecuador

Evaluating agricultural programmes requires considering not only the programmes’ influence on input and output indicators, but also considering the relationship between these indicators as embodied in the production technology. This article examines the impact on production of an intervention in the Ecuadorian Sierra designed to improve returns to potato production through training and through linking smallholders to high‐value markets. Critical to identifying the impact of the programme is the careful construction of a counterfactual and meticulous data collection. To assess the impact of the programme on production, a weighted estimation, where weights are constructed through propensity score matching, is employed to estimate a production function within a damage abatement framework. The function incorporates a series of interaction terms to assess the impact of the programme on the production technology. The findings provide evidence that the programme enhances yields both through a general shift in technology as well as increased input use. The results suggest that the use of effective farming techniques that are learned through the programme induce this technological shift.     

Should ‘Impartial’ Advice be a Priority of European Agricultural and Rural Policies?

Recent EU legislation will require Member States to ensure that farm advice which is supported by EU funding is impartial. In this article we present the findings of an online workshop which asked whether this should be a priority for European advisory supports within the Common Agricultural Policy. The answer was ‘no’. At the workshop, results of AgriLink were presented for discussion with international experts. These results highlighted major pitfalls for setting the boundaries of independent advice. Participants from Europe and North America agreed that ‘impartial’ advisors providing or selling only advice are rare in many contexts. Key organisations offering farm advice in many European countries, such as farmers’ cooperatives, often have established relationships with commercial suppliers. Being apparently independent from industry is also not sufficient for ensuring that advice addresses societal issues. Farmers’ choice for advice is more likely to reflect established trusted relationships than the ‘impartiality’ of the advisor. Workshop participants instead argued that policies should focus on increasing transparency (revealing vested interests); investing in ‘back office’ activities to ensure that advisors have access to reliable and relevant evidence; and ensuring that the full range of EU farmers have access to professional advice.     

Is Bt Cotton a Pro‐Poor Technology? A Review and Critique of the Empirical Record

Policy makers, journalists and other commentators have hailed genetically modified (GM) crops as a ‘pro‐poor’ success in the developing world. Their confidence appears to be justified by the encouraging conclusions reached by academic studies on the performance and impacts of GM crops, which seem to provide convincing evidence of substantial benefits for smallholders in developing countries. However, a detailed, critical examination of studies on transgenic, insect‐resistant cotton in China, India and South Africa demonstrates that the technology's impacts have been evaluated and represented in selective and misleading ways. The performance and impacts of GM crops have in fact been highly variable, socio‐economically differentiated and contingent on a range of agronomic, socio‐economic and institutional factors. The shortcomings of the GM crop‐impacts literature have done a disservice to public and policy debates about GM crops in international development and impeded the development of sound, evidence‐based policy.     

Agricultural Trade Liberalisation in the 21st Century: Has It Done the Business?

Based on a novel, detailed, time‐consistent tariff database taking account of import protection developments in the agricultural sector since 2001, we propose a statistical decomposition of the changes in the various types of tariffs. The results show that the multilateral system has played a limited role in trade liberalisation over the period. Many countries have continued to apply much lower tariffs on agricultural products than their WTO ceilings. Moreover, there has been substantial unilateral dismantling of tariffs over the period, so that much of the liberalisation took place outside WTO and regional agreements. The number of regional trade agreements has surged, but their impact on applied agricultural tariffs has been limited. Finally, we investigate the tariffs, trade and production implications for food and agricultural products of two extreme scenarios in the future development of trade negotiations: an ambitious surge of regional agreements and a trade war within the WTO context.     

Is it Possible to Utilise the Agricultural Potential of Ukraine under the Current Agrarian System?

The government of Ukraine aims to transform the country into an ‘agricultural superpower at the international level’ with the hope that the sector will gain high foreign currency earnings and become ‘the engine of national economic development’. The large agribusiness corporations have willingly responded to these calls. However, placing hope solely in the corporate sector is inadequate as the key role of agriculture to create business diversity and achieve rural social and environmental objectives will remain unfulfilled. Many other national economies have experienced ‘the offensive’ of capital on agriculture during the twentieth century, with associated negative consequences, thus encouraging them to adopt more balanced agrarian policies which benefit the whole rural population. Utilisation of Ukrainian agricultural potential as an economic growth engine requires a fundamental change in the interpretation of its purpose, which is currently focused on profit‐making export‐oriented commercial activity. The multifunctional nature of the sector needs to be emphasised, the purpose of which is not only the production of agricultural and food products, but also the creation of public benefits, such as the development opportunities and means for existence for 14 million Ukrainian rural inhabitants, maintenance of ecological balance, regeneration of soil fertility and preservation of rural landscapes.     

Rural electrification in Cambodia: does it improve the welfare of households?

This study uses subsamples of socio-economic surveys from 2004 and 2011 to construct village panel data and apply the difference-in-differences (DID) method to examine the impact of rural electrification on household consumption and children’s education in Cambodia at the village level. Conditional on the DID assumption and observed village and household characteristics, rural electrification increased household consumption by approximately 16.6%. This study also finds that higher-quintile households benefited more. Additionally, rural electrification increased boys’ years of schooling completed by 0.85 and girls’ years of schooling completed by 0.62. It also increased the probability of having ever been enrolled in primary school for boys by approximately 9.7% but did not increase the probability of having ever been enrolled for girls.     

Does the Decoupling Reform Affect Agricultural Employment in Sweden? Evidence from an Exogenous Change

This study uses aggregated municipality data, for the years 2001–2009, to explore whether direct payments to farmers affect agricultural employment in Swedish municipalities. The decoupling reform in 2005 included a new grassland support payment accompanied by management obligations that had unexpectedly high redistributive consequences as it greatly increased common agricultural policy payments to municipalities with large areas of grassland. In some municipalities, total payments more than doubled. Thus, since the reform seems exogenous to the behaviour of farmers and the regional economy, the reform can be used to identify a subsidy effect. We find that a permanent increase in agricultural employment can be attributed to the new grassland support. Our results indicate that the grassland support generates an additional job at a cost of SEK 250,000, relative to the average agricultural wage of SEK 333,000. However, the subsidy effect is largely keeping jobs in agriculture, i.e. the grassland support may be slowing down the process of structural change in grassland regions.     

A Note: Reducing Cropland Abandonment in China – Do Agricultural Cooperatives Play a Role?

Cropland abandonment occurring both nationally and globally threatens food security and environmental sustainability. We explore whether agricultural cooperatives help reduce cropland abandonment, using data collected from 5,593 households in 229 villages in China. By estimating a two-stage residual inclusion approach, we provide evidence that the existence of agricultural cooperatives in rural villages reduces the probability of cropland abandonment and the abandonment ratio. Further analysis shows that cooperative effects on cropland abandonment and the abandonment ratio are heterogeneous across geographic locations.     

Did China Hurt the Textiles and Clothing Exports of Other Asian Economies, 1990–2005?

Employing a gravity model, this article examines the impact of the rise of China's textile and clothing (T&C) sector on the exports of its Asian counterparts. It was established that China's textile exports posed a greater competitive threat than its clothing exports to the T&C exports of other Asian economies. It was also found that higher-income Asian economies fared better than their lower-income counterparts. This is because the higher-income Asian economies tended to be specialized in segments of the T&C sector less exposed to Chinese competition.     

‘Integrated’ Rural Development Policy in the EU: a Team Too Faar?

‘Integrate’ Rural Development Policy in the EU: a Term Too Far? Since its introduction in the early 1980s for Mediterranean and some other regions, an ‘integrated’ approach to EU rural development policy has come to-be increasingly advocated. However, the precise meaning of the term is seldom made clear in official and other documents, which appear to have applied it in a variety of contexts and in a number of different ways, This article discusses and analyses some alternative interpretations of ‘integrated’ rural development policy, including considerations of finance (funding from more than one source), administration (policy design, approval, monitoring and evaluation being undertaken by a single agency), institutions (responsibility and coordination being shared between different departments and agencies) and the economics of efficiency (better balancing of costs and benefits, and the encouragement of desired complementarities). These different meanings may explain some of the confusion in the long-running debate over rural policy in the EU, and suggest the need for more careful language. However, the arguments do endorse the apparent direction of thinking at the November 2003 Salzburg conference on rural development, i.e. that improved policy will result from better defined objectives, a single EU fund for rural development, and territorial programming at a local or regional level. Les politiques européennes de développement rural ‘intégré’:un mot de trop? Depuis l'introduction de ce vocable, au début des années 80, à propos, entre autres, des régions méditerranéennes, il est de plus en plus courant d'entendre vanter les mérites d'une approche ‘intégrée’ des politiques de développement rural. Pourtant, la signification précise de ce terme n'est que rarement explicitée, que ce soit dans les documents officiels ou dans d'autres. Le mot semble avoir été appliquéà de nombreuses situations différentes et de toutes sortes de façons. On essaie id d'analyser les différentes interprétations qu'il est possible de donner à la notion d'intégration des politiques de développement rural, que ce soit en termes de financement (utilisation de plus d'une seule source de financement), d'administration (l'élaboration des politiques, la décision, le suivi, et l'évaluation se trouvant sous la responsabilité d'une agence unique), destitutions (partage des responsabilités et des tâches de coordination entre différents départements ministériels ou agences d'exécution), ou d'efficacitééconomique (meilleur équilibre entre les bénéfices et les coûts, souci de créer des complérnentarités). La polysémie du mot semble expliquer la confusion qui entoure depuis longtemps le débat sur la politique rurale dans l'Union européenne et cela implique la nécessité d'employer un langage plus précis. Aussi bien, ce point correspond à la ligne générale de pensée qui s'est manifestéà la conférence de Salzbourg en novembre 2003 sur le développement rural: pour améliorer la politique, il faut que ses objectifs soient mieux définis, qu'il existe un seul fonds européen pour le développement rural, et que la planification territoriale se fasse au niveau local ou régional. ‘Integrierte’ Politik zur Entwicklung des ländlichen Raums in der EU: Ein zu weit gefasster Begriff? Seitdem der integerierte Ansatz für die Politik zur Entwicklung des ländlichen Raums der EU in den frühen 1980er Jahren für den Mittelmeerraum und andere Regionen eingeführt wurde, wird er zunehmend befürwortet. Die Definition dieses Begriffs geht jedoch selten eindeutig aus amtlichen und anderen Dokumenten hervor, welche diesen Begriff scheinbar auf die verschiedensten Arten und in vielfaltigen Kontexten verwenden. In diesem Beitrag werden einige Alternativen hinsichtlich der Auslegung des Begriffs der “integrierten” Politik zur Entwicklung des ländlichen Raums diskutiert und analysiert. Hierbei werden Finanzierung (Finanzierung aus mehreren Quellen), Verwaltung (Politikentwurf, Zustimmung, Überwachung und Evaluierung durch eine einzige Agentur), Institutionen (gemeinschaftliche Verantwortung und Koordination von verschiedenen Abteilungen und Geschäftsstellen) und Effizienz (verbessertes Abwägen von Kosten und Nutzen sowie Förderung erwünschter Komplementaritäten) behandelt. Diese unterschiedlichen Begriffsinhalte sind möglicherweise ein Grund für die Verwirrung in der seit langem geführten Debatte zur ländlichen Politik in der EU und lassen eine umsichtigere Sprachwahl sinnvoll erscheinen. Die Argumente untermauern jedoch die vorherrschende Meinung auf der Salzburger Konferenz zur Entwicklung des ländlichen Raums im November 2003, d.h. dass klarer definierte Ziele, ein einziger EU-Fonds für die Entwicklung des ländlichen Raums sowie territoriale Programmentwicklung auf lokaler oder regionaler Ebene zu einer verbesserten Politik führen.     

Does it Matter that we do not Agree on the Definition of Poverty? A Comparison of Four Approaches

While there is world-wide agreement on poverty reduction as an overriding goal of development policy, there is little agreement on the definition of poverty. Four approaches to the definition and measurement of poverty are reviewed in this paper: the monetary, capability, social exclusion and participatory approaches. The theoretical underpinnings of the various measures and problems of operationalizing them are pointed out. It is argued that each is a construction of reality, involving numerous judgements, which are often not transparent. The different methods have different implications for policy, and also, to the extent that they point to different people as being poor, for targeting. Empirical work in Peru and India shows that there is significant lack of overlap between the methods with, for example, nearly half the population identified as in poverty according to monetary poverty but not in capability poverty, and conversely. This confirms similar findings elsewhere. Hence, the definition of poverty does matter for poverty eradication strategies.