Agricultural Diversification In Nepal Status Determinants And Its Impact On Rural Poverty

As in many parts of the developing world, the share of high value crops in agricultural gross domestic product (AgGDP) has increased substantially in Nepal. We contribute to the literature on trends in agricultural development in the poorest countries by answering the research question on “Does transition from traditional to high-value agriculture reduce rural poverty in poor developing countries”? We also identified the drivers leading to this transition. The study uses survey data from three rounds of the nationally representative Nepal Living Standard Surveys: NLSS I (1994/1995), NLSS II (2004/2005) and NLSS III (2010/2011). Multi-level model was used to study the determinants of agricultural diversification. To estimate the causal impact of agricultural diversification on welfare measures, propensity score matching and instrumental variable techniques were used. Results indicate that there has been a rightward shift in the distribution of the share (percent) of high-value crops between 1995 and 2004 and between 2004 and 2010, respectively. The area as well as the shared by major cereals (paddy, maize, and wheat) is declining over years. However, it is increasing for high-value crops (potato, vegetables, spices/condiments, and fruits). The percentage increase in share of the high-value crops was higher in or adjacent to urbanized districts between 1995 and 2010. The factors positively associated with the agricultural diversification are female-headed households, caste, mother's education, net-buyer status, urban region, remittance, farm size, kitchen garden, improved seeds, telephone and refrigerator. We found positive impact of agricultural diversification towards high-value crops on rural poverty and monthly per capita consumption expenditure. However, for cereal crops grower, we find the negative impact on poverty and monthly per capita consumption expenditure.

As in many parts of the developing world, the share of high value crops in agricultural gross domestic product (AgGDP) has increased substantially in Nepal. We contribute to the literature on trends in agricultural development in the poorest countries by answering the research question on “Does transition from traditional to high-value agriculture reduce rural poverty in poor developing countries”? We also identified the drivers leading to this transition. The study uses survey data from three rounds of the nationally representative Nepal Living Standard Surveys: NLSS I (1994/1995), NLSS II (2004/2005) and NLSS III (2010/2011). Multi-level model was used to study the determinants of agricultural diversification. To estimate the causal impact of agricultural diversification on welfare measures, propensity score matching and instrumental variable techniques were used. Results indicate that there has been a rightward shift in the distribution of the share (percent) of high-value crops between 1995 and 2004 and between 2004 and 2010, respectively. The area as well as the shared by major cereals (paddy, maize, and wheat) is declining over years. However, it is increasing for high-value crops (potato, vegetables, spices/condiments, and fruits). The percentage increase in share of the high-value crops was higher in or adjacent to urbanized districts between 1995 and 2010. The factors positively associated with the agricultural diversification are female-headed households, caste, mother's education, net-buyer status, urban region, remittance, farm size, kitchen garden, improved seeds, telephone and refrigerator. We found positive impact of agricultural diversification towards high-value crops on rural poverty and monthly per capita consumption expenditure. However, for cereal crops grower, we find the negative impact on poverty and monthly per capita consumption expenditure.

The study analyzes food inflation trends in India over the last decade. Annual trends show that different commodities have contributed to food inflation in different years and that no single commodity shows uniformly high inflation. A decomposition exercise shows that eggs, meat, fish, milk, cereals, and vegetables were generally the main contributors to recent food inflation. The contribution of pulses, except pigeon peas (arhar), and of edible oils remained low. Fruits and vegetables displayed a much higher degree of intrayear volatility, and high-weight commodities in the national consumption basket also showed very high inflation rates, which is a cause for concern. Results of the econometric analysis show that both supply and demand factors are important. Cereal and edible oil prices appear to be mainly driven by supply-side factors such as production, wage rates, and minimum support prices. For pulses, the effects of supply- and demand-side factors appear almost equal. The prices of eggs, meat, fish, milk, and fruits and vegetables appear to be driven mainly by demand-side factors.

A joint FAO and World Bank study which shows how the farming systems approach can be used to identify priorities for the reduction of hunger and poverty in the main farming systems of the six major developing regions of the world.

Located at the heart of West Africa, Niger is a landlocked country with three-quarters of its territory covered by the Sahara Desert. Niger’s climate is mostly arid, and it is one of the least developed countries in the world. The vast majority of its population lives in rural areas, and the country is strongly dependent on agriculture. Agriculture is predominantly rainfed and yields rely on one rainy season. Although productivity in Niger has shown a positive trend, agriculture has been strongly affected in recent decades by several crises partly or entirely due to extreme weather events. Farmers pursue a number of strategies in the face of climatic (and nonclimatic) stressors including soil and water conservation methods such as barriers, terracing, and planting pits, and their adaptive capacity is deemed critical for estimating the economic impact of climate change. An understanding of climate change adaptation processes at the farm household level is therefore crucial to the development of well-designed and targeted mitigation policies. In this study, we use new data from Niger and regression analysis to study climate change adaptation through the digging of zaї pits and food production and the role of human capital measures therein. We find that adaptation is influenced by the perception that the frequency of droughts has increased and by the availability of financial resources and household labor. Adaptation is also influenced by educational attainment—both formal and Koranic school education. Adaptation of zaї pits is found to play an important role in food productivity. Our counterfactual analysis reveals that even though all households would benefit from adaptation, the effect is found to be significantly larger for households that actually did adapt relative to those that did not, indicating that the prospects of closing the productivity gap through encouraging adaptation in less well-endowed households are limited.

A monitoring and evaluation (M&E) system is of critical importance for evidence- and outcome-based planning and implementation in agriculture. The availability of and access to timely and reliable data to inform the M&E system is an undeniable asset. Our analysis highlights the use of survey data to generate relevant information and knowledge on the agricultural sector. The Poverty Monitoring Survey carried out in Senegal in 2011 is used to build the economic accounts for agriculture, which identify a value added of 581 billion CFA francs generated by Senegal’s farm households, representing 60 percent of the sector’s value added in 2011. The average farm household generated 646,500 CFA francs from farming in that same year. The information from the economic accounts for agriculture offers valuable inputs for decision-support tools such as the geographical information platforms (e-atlas) and social accounting matrixes used in strategic analyses and agricultural policy planning.

This report offers specific policy and investment options articulated around two broad areas: (1) stimulating growth in agriculture and sustainable management of fisheries and (2) providing public infrastructure and services that strengthen the enabling environment. A plan to stimulate growth in agriculture and fisheries, the first broad area, could be centered around the following set of goals: revitalize the rubber sector, develop high-value fresh products, improve rice productivity, modernize land and input markets, expand access to loans for machinery and seasonal input purchases, strengthen agricultural extension services to ensure dynamism in Mon State’s farm sector, improve management of marine capture fisheries, and facilitate expansion of aquaculture. The first part of the report details the challenges and potential solutions presented by each of these points. The second part of the report details options to create a growth-enabling environment through public infrastructure and services, centered around the following goals: improve the budgetary and fiscal process to enable locally driven public investment, improve access to and reliability of infrastructure, expand the formal credit market, promote productive investment by the private sector, strengthen regulatory frameworks for the construction sector, exploit the potential for the development of tourism, and improve the quality of and access to education and health services.

The fifth Sustainable Development Goal—to “achieve gender equality and empower all women and girls”—reflects a growing consensus that these are key objectives of development policy in their own right, while also contributing to improved productivity and increased efficiency, especially in agriculture and food production. To deliver on this commitment to women’s empowerment in development calls for appropriate measures that can be used to diagnose the scope and major sources of disempowerment and to measure progress. The Women’s Empowerment in Agriculture Index (WEAI) is a survey-based tool codeveloped by the International Food Policy Research Institute (IFPRI), the Oxford Poverty and Human Development Initiative, and the U.S. Agency for International Development (USAID) (Alkire et al. 2013). The index was originally designed as a monitoring and evaluation tool for the U.S. government’s Feed the Future initiative to directly capture women’s empowerment and inclusion levels in the agricultural sector. Since its launch in February 2012, the WEAI has been implemented in the 19 Feed the Future focus countries. As with any new metric, pilot testing in a few selected countries with limited sample sizes is insufficient to demonstrate how the WEAI would perform when rolled out on a wider scale. Concerns expressed by users of the WEAI led to the creation of an abbreviated version—the A-WEAI. This paper begins by presenting a brief overview of the WEAI and its construction. It then proceeds to discuss (1) the background and motivation behind the creation of the A-WEAI; (2) the steps taken to develop the AWEAI— namely, cognitive testing and piloting of different modules, particularly those that were difficult to administer in the field; (3) analysis of the pilot data from Bangladesh and Uganda; (4) domain-specific comparisons of the different pilot versions; and (5) robustness checks and empowerment diagnostics from the A-WEAI as compared with the original WEAI. The paper concludes by summarizing the modifications to the original WEAI and discussing possibilities for further development of empowerment metrics based on the WEAI.