1

Rural

Transformation &

Implications for

Agricultural & Rural

Development

Outline

Transformation & Transitions

Social Differences

Policy implications

Principles, perspectives … & .. Asia

Transformation & Rural Transition

With economic growth, relative decline of agriculture

Urbanisation

Main challenge for agriculture in transition

Raise

Productivity

Different paths, diuffernt transitions

England

France

Thailand

Asian success: Rising Rural Wages in Asia

Vietnam

5

10

15

20

25

30

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Red River delta North East

North West North Central Coast

South Central Coast Central Highlands

South East Mekong River delta

Despite Asian success, much gloom

TheoryAgriculture: limited scope for productivity gains, few links, low & falling prices

Manufacturing = Innovation

Agglomeration economies in urban

areas

Empirical

Africa’s limited transformation

Asian examples unrepeatable??

SOCIALDIFFERENCES

0.2

0.3

0.4

0.5

0.6

0.7

Mal

i To

min

ian

Mal

i Dié

ma

Mal

i Ko

uti

ala

Mal

i Mac

ina

Sen

egal

Cas

aman

ce

Sen

egal

Mek

hé

1

Sen

egal

Nio

ro

Sen

egal

Hau

t D

elta

Sen

egal

Mek

hé

2

Sen

egal

Bas

Del

ta

Mad

agas

car…

Mad

agas

car

Ala

otr

a 1

Mad

agas

car…

Mad

agas

car

Itas

y

Mad

agas

car…

Mad

agas

car

Ala

otr

a 2

Ken

ya B

un

gom

a

Ken

ya N

yan

do

Ken

ya N

aku

ru N

ort

h

Mo

rocc

o C

hao

uia

Mo

rocc

o S

aïss

Mo

rocc

o S

ou

ss

Nic

arag

ua

Mu

y M

uy

Nic

arag

ua

Terr

abo

na

Nic

arag

ua

La L

iber

tad

Nic

arag

ua

El V

iejo

Nic

arag

ua

El C

uà

Mex

ico

Sie

rra

SM.

Mex

ico

Tie

rras

Baj

asGin

i Co

eff

icie

nt,

inco

me

sb

y h

ou

seh

old

Dorward et al: SOAS/Wye

Step Up: Potential FT commercial SF

Step Out: diversified RNFE

Hang In: Marginal SF

Latin America [RIMISP]

Perspective: Latin America: 12 Cs

3%9%

20%

43%

25%

Commercial Farms

Class A family farms

Class B family farms

Class C family farms

Rural landless

Policy implications

& conclusions

No secrets: consensus on basics (1)

Rural Investment Climate

• Doesn’t have to be perfect! [Rodrik]

Consensus on basics (2)

• Bullet slide 22pt Verdana

16

Rural Public Goods

• Roads, power, irrigation, etc.

• Education, Health, Water

• Research & Extension

Debate: Failings in rural (factor)

markets: solutions?

State intervention? e.g. Fert Sub

Institutional Innovation e.g.

Contracts, Co-ops, etc.

17

Matters most for B, C smallholders & women

Factor markets matter

for benign transitions

Land transfers

Capital movements

Social Protection for

SF on low incomesChallenge of graduation: linking from SP to Productive Investments

Priorities for development partners?

Encourage Basics: evidence strong

Fund Rural Public Goods

Market Failures: fund trials [challenge funds?] & learning

Pilot Graduation from SP

Concluding reflection

Beware gloom: check [SE] AsiaHenley & van Donge 2012

Sound macro-economy: avoid inflation > 20%

Economic freedom for peasants & small entrepreneurs

Pro-poor, pro-rural public spending: >20% budget

No need for industrial policy!

Patience: T & T takes 30 years +