The poverty alleviation and food security role of agriculture

Module 3

Contribution of agricultural growth to poverty reduction: Extract from South

African case study

Does agricultural growth reduce poverty?;

Agricultural growth linkages in communal areas;

Growth and income multipliers associated with growth in processed and unprocessed commodity exports.

Poverty profile of SA

50th wealthiest country Poor social indicators: 107th out of 173 50th worst life expectancy Gini coeffiecient of 0.68 Poverty estimates:52% below income poverty line Perceptions of poverty: isolation; lack of security,

mainly rural ..

Does agricultural growth reduce poverty?

• Poverty transitions and mobility. Testing the role played by agricultural activities in alleviating poverty or facilitating mobility.

• Revisits to 1993 PSLSD households, in 1998.• Transition matrix reveals high levels of mobility• 1993 to 1998 – 199 000 households entered agricultural

production – thus 49% of HHs in KZN involved in agriculture

• 81% of HHs involved in agric in 1993 still practicing in 1998• Only 17% in informal small business sector

Does agricultural growth reduce poverty? (2)

• Agricultural production emerges as a better option for poverty reduction to 50% of informal entrepreneurs

• HHs involved in agriculture less likely to be poor.• 40% of HHs involved in agric were above threshold. • Severity of poverty is also lower.• HHs never involved in agric were ‘structurally poor’

and ‘structurally downward’. • 37% of agric HHs were never poor.

Agricultural growth multipliers

• Agricultural growth linkages: Case study in KZN Growth mulitplier of 1.28 and 1.32 (others: 1.35: 1.98) increase in small-farm income could stimulate

economic growth but maybe lower than expectations SAM analysis in Western Cape (income

multipliers) Scenario: 5% increase in agricultural exports Gross output increase by 1.84%; labour income

increase between 1.22% for whites and 1.84% for Africans; elementary occupations benefitted the most.