|Mineral Fertilizer Use and the Environment (IFA - UNEP, 1998, 52 p.)|
There is today a wide agreement that a necessary condition for economic growth in most developing countries is a productive agriculture - there are some exceptions, but they are few. This was not always the case. In the 1950s the emphasis in development policy was on urban industrial growth, with the agricultural sector being regarded as a source of inputs, mainly labour, for the manufacturing sector. It was only in the 1960s that the positive role of agriculture as an engine of development became accepted. Subsequent events in the 1970s and 1980s reinforced the need for more attention to be paid to agricultural development policies. But even today, some developing countries stall do not attach sufficient importance to agricultural development. If agriculture is to be productive, it is evident that the crops should receive, from one source or another, the nutrients they require.
A June 1996 IFPRI study concerning Latin America confirmed how agricultural growth helps the whole economy. When agricultural producers' incomes rise, they spend money on non-agricultural items, creating jobs for others throughout the whole economy. The study found that for every US$ 1 increase in agricultural output in developing countries, the overall economy grows by US$ 2.3.
Apart from being good for the national economy, productive agriculture helps to alleviate rural poverty. Most of the world's poor are rural-based and, even when they are not engaged in their own agricultural activities, they rely on non-farm employment and income that depend directly or indirectly on agriculture. The rural poor make up more than 75% of the poor in many sub-Saharan and Asian countries. Economic growth is strongly linked to poverty reduction. Poverty is itself a form of pollution and, in addition, the poor are often forced to overuse or misuse the natural resource base, in order to meet their basic needs.
Another, February 1994, IFPRI report described the results of a study in seven Asian countries, with widely diverse production environments and agrarian and policy structures, of the effect of technological change in favourable rice-growing areas, on the income of people in unfavourable ones - those by-passed by the new technology. The contributors found that when indirect effects of labour, land and product market adjustments are taken into account, differential adoption of high yielding varieties, HYVs, across environments does not significantly worsen income distribution. As HYV adoption increased the demand for labour in the favourable areas, more inter-regional migration from unfavorable areas took place, which mitigated potentially negative effects by equalizing regional wages. Shifts to alternative crops or non-farm employment in the unfavorable areas also contributed to equity.
A 1997 report by the Indian National Council of Applied Economic Research states that India could virtually eliminate urban poverty in a decade if it could sustain an annual economic growth averaging 6.4% But the report also foresees growing disparities between Indian cities and the countryside where 74% of people live. Agricultural growth is stagnant. The report suggests that the urban 26% of the population will increase to 30% in 2007 but this does not take account of possible accelerated urbanization prompted by the rising income disparities.