Executive Director – CARDI FANRPAN Regional Policy Dialogue & Annual General Meeting Maputo, Mozambique 31 August – 4 September 2009 CARDI - Improving

Executive Director – CARDIExecutive Director – CARDI

FANRPAN Regional Policy Dialogue & Annual General MeetingFANRPAN Regional Policy Dialogue & Annual General MeetingMaputo, MozambiqueMaputo, Mozambique

31 August – 4 September 200931 August – 4 September 2009

CARDI - Improving Lives Through Agricultural ResearchCARDI - Improving Lives Through Agricultural Research

THE REAL CONTRIBUTION OF THE REAL CONTRIBUTION OF AGRICULTURE:AGRICULTURE:

ITS IMPACT ON PLANNING THE DEVELOPMENTITS IMPACT ON PLANNING THE DEVELOPMENT OF SUSTAINABLE AGRICULTUREOF SUSTAINABLE AGRICULTURE

Presented byPresented by

Francis AsieduFrancis AsieduManager, Technical ServicesManager, Technical Services

PRESENTATION OUTLINEPRESENTATION OUTLINE

• IntroductionIntroduction• World Bank report on agriculture for development• Popular view of agriculture• Objectives of paper

• Real value in agriculture – Study by IICAReal value in agriculture – Study by IICA• GDP contribution – Agriculture and Agri-food vs.

Primary agriculture• Agricultural linkages• Agriculture’s multiplier effects

• Impact on planning for sustainable Impact on planning for sustainable development of agriculturedevelopment of agriculture

The World Bank in its World Development Report, 2008, Agriculture for Development states:

“In the 21st century, agriculture continues to be a fundamental instrument for sustainable development and poverty reduction

To achieve this there is the need for the:•Introduction of more sustainable production systems•Innovative policy initiatives and strong political commitment•Improvement in local, national and global governance”

World Bank report on agriculture for developmentINTRODUCTIONINTRODUCTION

Popular view of AgricultureINTRODUCTIONINTRODUCTION

This paper:

o Highlights 2004 study by Inter-American Institute

for Cooperation on Agriculture (IICA) that indicates

the “real value” of agriculture

oSuggests ways in which the results could

influence the planning for the repositioning of

the sector into the “New” Agriculture

Objectives of PaperINTRODUCTIONINTRODUCTION

IICA notes:

o Agriculture’s contribution to economic development undervalued since traditional method used measures only primary production; ignoring backward and forward linkages with rest of the economy

o Traditional methodology also ignores the growing demand for environmental goods and services from urban centres

o To evaluate its impact on poverty alleviation strategies, account must be taken of agriculture’s effects on income distribution among rural and urban dwellers

IICA Study: BackgroundREAL VALUE IN AGRICULTUREREAL VALUE IN AGRICULTURE

Used Social Accounting Matrices (SAMs):

o SAMs make it possible to examine the structural links between production, consumption, trade and the accumulation and distribution of income

Eleven countries in original study:

o Argentina, Brazil, Canada, Chile, Colombia, Costa Rica, Mexico, Peru, United States, Uruguay and Venezuela

o Subsequently similar study done for Trinidad and Tobago

IICA Study: MethodologyREAL VALUE IN AGRICULTUREREAL VALUE IN AGRICULTURE

Selected Countries

AgGDP(%GDP)

Agriculture & Agri-food GDP (%GDP)

Ratio Agriculture

Argentina 4.6 32.2 7.0

Brazil 4.3 26.2 6.1

Canada 1.8 15.3 8.4

Chile 5.6 32.1 5.7

Columbia 8.0 32.1 4.0

Costa Rica 11.3 32.5 2.9

IICA Study: Results 1: Contribution to GDP

Selected Countries

AgGDP(%GDP)

Agriculture & Agri-food GDP (%GDP)

Ratio Agriculture

Mexico 4.6 24.5 5.3

Peru 6.6 31.8 4.8

United States 0.7 8.1 11.6

Uruguay 6.2 34.8 5.6

Venezuela 4.0 20.5 5.1

Trinidad & Tobago 1.7 3.3 1.9

IICA Study: Results 1: Contribution to GDP (cont’d)

Agriculture - source of inputs for other industries, a source of foreign exchange, an important generator of value added and of wealth which remains in rural areas:o Seventy-four per cent of primary production goes into

other production

o Fifty-three cents of every dollar produced by agriculture is in the form of value added

o The food and agro-industrial sectors generate 42 cents of value added for each dollar produced, and they pay 58 cents for inputs for every dollar in production

o Most of this remuneration stays in the region, with at least, 53 cents of every dollar from primary agriculture remaining in rural areas

IICA Study: Results 2: Agricultural Linkages

REAL VALUE IN AGRICULTUREREAL VALUE IN AGRICULTURE

Each additional unit demanded from the primary sector has a strong effect on other sectors. For example:

o In Canada, 3.1 additional units derived output are generated

o In Argentina, as many as 5.5 additional units

IICA Study: Results 3: Agriculture’s Multiplier Effects


The use of SAMs showed that: o An increase in the GDP of agriculture to its real value

o As an economy develops and diversifies, the primary agricultural sector loses weight in terms of GDP but develops strong linkages with the rest of the economy

o Agriculture exhibits very strong backward and forward linkages within and outside of the sector

o Agriculture supports and promotes the development of rural areas and hence the quality of rural life

o The sector exhibits strong multiplier effects with other economic sectors

IICA Study: Summary


The results have provided agricultural stakeholders with empirical evidence of the industry as a key driver of development. Therefore, stakeholders must approach the planning for repositioning of agriculture : o With confidence

o Must discard the role of mendicants

o Must portray themselves as the efficient and effective Directors and Managers of a first class industry

o Must be champions of Advocacy for public goodwill, but more so for political will. The Lilliendal Declaration (Caribbean, 2009) and the Maputo Declaration (Southern Africa, 2002) are examples of outcomes of such advocacy

IICA Study as Tools for Positive Thought Processes

IMPACT ON PLANNING FOR SUSTAINABLE IMPACT ON PLANNING FOR SUSTAINABLE AGRICULTURAL DEVELOPMENTAGRICULTURAL DEVELOPMENT

Concepts in Planning the Repositioning: 1. Value Chain


This approach is necessary to take advantage of the backward and forward linkages that are key elements in the realization of the real value of agriculture

Concepts in Planning the Repositioning: 2. Working Together


The utilization of the Value chain dictates Working Together, especially as Clusters (Building Trust)

In the area of R&D, where CARDI is involved, Working Together is implemented through Research, Development and Application Chain

Concepts in Planning the Repositioning: 4. Accountability and Transparency


To facilitate Building Trust there must be Accountability & Transparency

This requires Multisectoral approach where partners agree on plans, objectives, and expected results and responsibilities

Concepts in Planning the Repositioning: 5. “New” Agriculture


To facilitate this multisectoral involvement leads to the final concept, the development of the “New” Agriculture.

oThis is Cabinet responsibility, requiring support to Minister of Agriculture by entire Cabinet, especially the President / Prime Minister

oThis Cabinet Responsibility paradigm is represented by the saying “Agriculture is Too Important to be Left in the Hands of Agriculturalists alone”: A truism for the achievement of the Real Value of Agriculture and the realization of the “New” Agriculture

THANK YOU AND GOD BLESS!THANK YOU AND GOD BLESS!

www.cardi.org

Documents

Executive Director – CARDI FANRPAN Regional Policy Dialogue & Annual General Meeting Maputo, Mozambique 31 August – 4 September 2009 CARDI - Improving