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Last Updated: Saturday, 20 October 2007, 00:45 GMT 01:45 UK
World Bank gives farming renewed role
By Andrew Walker
Economics Correspondent, BBC World Service

Maize being held in Ghana
Just 4% of development aid goes to agriculture in developing nations

The World Bank has rediscovered agriculture.

Perhaps that's an exaggeration, but clearly the farming sector is gaining a renewed significance in the Bank's work.

Last week its own assessors produced a report criticising the Bank for not taking the sector seriously enough. The Bank duly accepted some - though not all - of the strictures.

And now the new edition of its annual World Development Report is all about agriculture, a kind of recognition that the Bank, and many other agencies, must do better in future.

The importance of agriculture and the lack of focus on it among aid donors, not just the Bank, comes through very starkly in these figures supplied by the report.

Some 75% of the world's poor live in rural areas, but only 4% of all development aid goes to agriculture in the developing world.

Poverty reduction

The Bank's chief economist Francois Bourguignon says that for the poorest countries, most of which are in Africa, growth in agriculture is four times as effective in reducing poverty as growth in other areas of the economy.

He accepts that, when so many of the poor do work on the land, it should be obvious that agriculture needs to be a priority.

But he says for a long time the Bank had the idea that progress in other area of the economy would automatically take care of agriculture.

After all, he points out, when economies grow it is almost always the case that the share of agriculture in the economy declines - as industry and services grow faster.

Efficiency

He says things have changed since the 1980s. Then, agriculture wasn't just neglected, he says, it was actively discriminated against. It was more heavily taxed in many developing countries.

When these issues were tackled in subsequent years, it was assumed that with conditions for farmers more like a textbook market economy, growth would automatically get going.

But it didn't. More active government policies are still needed he says.

There is a need for more emphasis on improving efficiency in small farms, and giving better access to technology and perhaps subsidised fertiliser.

Markets alone are not enough he says. And so the Bank is now promising to devote more effort and resources to these areas, and it is calling on other aid donors to do the same.

The poorest countries are places were markets don't work very well, Mr Bourguignon says, so the markets need a bit of help.

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