Contributed by Forhad Shilpi and Uwe Deichmann
Will investments in agricultural technology by themselves be sufficient to ensure long-term productivity growth in the farm sector and, more importantly, for rural poverty reduction? As rapidly rising food prices threaten food security and the poverty gains made by developing countries, many have blamed declining funding for agricultural technology development for this state of affairs (for example, the New York Times).
This question is highly relevant for South Asia. Shanta Devarajan has commented on the recent rice export ban by India and its implication for its neighbor, Bangladesh, which has become a net rice importer this year due to floods and cyclone impacts. But Bangladesh also provides evidence that agricultural technology by itself is unlikely to lead to adequate growth in agricultural output if factors such as physical and economic geography and infrastructure needs are not considered.
In a recent study, we examine these issues for Bangladesh. During the early 1990s, Bangladesh experienced widespread diffusion of green revolution technology in rice, its main crop. As a result, rice production has more than doubled since the early 1970s. The spread of green revolution technology is usually expected to boost wages for farm workers. But we found regional differences in rural wages that run counter to the traditional argument.
The North-West region of Bangladesh (Rajshahi Division) has some of the highest agroecological endowments in the country (Figure 1).
Figure 1: Crop suitability index
(Source: Bangladesh Agricultural Research Council, BARC)
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But, surprisingly, real agricultural wages were much lower in the Rajshahi Division (Figure 2). Similarly, the probability of employment in the high-wage, non-farm sector was also lower in the North-West (Figure 3). This is puzzling in light of the traditional argument that productivity growth in agriculture raises agricultural wages and also boosts non-farm employment through various production, consumption and labor market linkages. These linkages between the farm and non-farm sectors are assumed to create a virtuous cycle of growth and development in rural areas.
| Figure 2: Hourly Rate in Agriculture Farm | Figure 3: Probability of employment in the high-wage farm sector |
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(Source: Average values for household clusters from teh Household Income and Expenditure Survey 2000) |
(Predicted and spatially interpolated values from HIES analysis; high wage means above the median agricultural wage of the region) |
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Our study found that access to large urban markets (as in Dhaka and Chittagong) is by far the most important determinant of high-return, non-farm activities: people are more likely to be employed in better paid wage employment and self employment in the non-farm sector if they are closer to urban centers. The impact of agricultural potential depends on how far the village is from the main urban centers: those who are further away from these centers are even less likely to be in well-paying non-farm jobs even if they are living in areas with greater agricultural potential. This suggests that poor connectivity to major urban markets greatly weakens farm-non-farm linkages. And lack of expansion of better paid non-farm jobs in turn slows down the movement of workers from agriculture to other activities, depressing agricultural wages and impeding long-term growth in agricultural productivity itself.
Greater investment in improving agricultural technology certainly needs to be part of the solution to meet the rising demand for food. But if spatially connective infrastructure (roads and bridges in particular) and complementary services such as agricultural extension are ignored, these findings from Bangladesh suggest that few farmers in lagging but potentially productive regions will benefit, thwarting the goal of raising agricultural productivity.
Mariam Claeson
Sun, 06/15/2008 - 14:01 Raising 50% food production by 2030 (U.N. chief Ban Ki-moon told world leaders) but the issue is how? Present economic pattern of the globe only helps promoting urban economics. Major Asian countries which were producing and exporting food grain to the world now intend producing and supplying computer and electronic goods. Most countries do not pay attention to promote agricultural product through research to add on value thus become profitable. Consequence of urban economics is excessive urbanization. Urban related economic growth thrusts agricultural land conversion to cities and building to accommodate urban population and industries. Over 20% of farm lands of developing countries have been converted to cities and buildings for the past decades and Over 50% of farmlands of villages (close to cities) got merged with cities. Food shortage is as war on world, could be disastrous to collapse world economics. Food is first priority for each consumer, expensive food would prune consumption of other product’s and services. • World absolutely need to pay attention the importance of rural economics and emphasize on agriculture and add on value to it. • Present education pattern only facilitates urbanization to grow urban population. Change in education pattern so to improve student’s taste towards agriculture and its research that includes animal farming. • Agriculture need to be profitable for the farmers. • More allocation of fund and land to agricultural sector. • Tough international legislation to arrest speculative gambling on essential commodities. • Bring back the incentives to farmers to produce more without incurring losses. • World population will grow and land will be less for us so maximum endeavor to scientific research so can use most land and water available on earth that includes desert land and sea. • Main cause of food shortage is growth pattern of developing countries. So bio fuel alone is not responsible. The real culprits are shortage and speculation hoarding. However, growing crop for fuel in land for food is not justified scientists and research professionals can work on sourcing from sea, river, desert or unused land plants or other means.