Post on 18-Nov-2014
description
Agricultural Growth and Poverty Reduction in Mozambique: Technical Analysis in
Support of the CAADP Process
Karl Pauw (IFPRI)
James Thurlow (UNU-WIDER)
Rafael Uaiene (MSU)
John Mazunda (Independent)
Objectives of the study
Conduct CGE analysis of the economywide implications of accelerated agricultural growth on national/regional growth, poverty reduction, and caloric availability
Help policymakers understand
− the nature of economic linkages between agriculture and other sectors;
− the socio-economic importance of the agricultural sector;
− implications of regionally-focused policies under PEDSA;
− how to better integrate agricultural development policies into the broader development strategy for Mozambique
Introduction and context
Very rapid GDP growth during 2003-2008 (8%), with strong growth across all sectors.
Agriculture also performed strongly (7%)... at least according to national accounts
What about poverty?
Survey year
Nat-ional
Location Region
Urban Rural North Center South
2002/03 54.1 51.5 55.3 55.3 45.5 66.5
2008/09 54.6 49.5 56.8 46.3 59.7 56.8
Explaining the growth-poverty disconnect (Arndt et al. 2011)
1. Food and fuel price shocks: − Prices peaked in 2008 when survey data was collected
− High import intensity = vulnerable to shocks
2. Drought in 2008 affected central region in particular:
− 16-17% yield shock for key staples
3. National accounts agricultural statistics doubted
− Early Warning System estimates used until 2009
− TIA used since 2010; considered more reliable but paints a much gloomier picture for 2002–2008
Model scenarios
CGE model (base year 2007) used to compare two alternative growth paths during 2009–2019 (PEDSA implementation period)
“Baseline scenario”
− Assume Mozambique continues along the same growth trajectory
− Need to understand what exactly happened
“CAADP scenario” − Broad-based agricultural growth across all subsectors
− PEDSA targets high-potential areas in center and north
− Growth target of 7 percent achieved
Lessons from “yield analysis”
Stagnant crop yields; land expansion just matched population growth; decline in per capita staple crop production.
Regional differences:
− North: high potential, but sharp decline in yields; very rapid land expansion
− Centre: relatively strong yield growth despite drought impact; land expansion rate exceeds population growth
− South: some crops (e.g., cereals) performed adequately, but average yields remain very low and land expansion slow
Institutional factors: 2000s more about restructuring institutions and developing agricultural policies, and not so much about developing agriculture
Example: Cereal crop yields (2002–2008)
National GDP at factor cost
GDP shares (%)
Growth 2009-2019
Base CAADP
Total GDP 100.0 5.7 6.8
Agriculture 26.7 3.4 7.0
Cereals 7.5 3.8 8.5
Root crops 5.3 3.8 6.0
Pulses 3.2 3.3 7.9
Horticulture 2.6 2.0 4.3
Export crops 1.2 3.7 5.3
Livestock 1.9 3.1 6.9
Industry 26.1 5.3 5.3
Services 47.2 7.1 7.5
Regional agricultural GDP at factor cost
Agric. GDP
shares (%)
Growth 2009-2019
Base CAADP
Agricultural GDP* 100.0 3.5 7.1
Northern region 25.9 1.0 7.6
Central region 57.6 4.6 7.6
Southern region 16.5 2.8 4.2
* Crops and livestock only; excludes forestry and fisheries
Yield effects (selected crops)
Initial yield
(2009) (mt/ha)
Yield achieved by 2019
% change 2009-2019
CAADP Base CAADP
Maize 0.9 0.9 1.3 43.7
Sorghum 0.6 0.8 0.8 39.1
Rice 1.0 1.3 1.5 40.4
Cassava 8.4 12.1 14.2 67.9
Pulses 0.7 0.6 1.0 49.2
Groundnuts 0.3 0.3 0.5 46.8
Vegetables 5.0 4.8 6.3 25.3
Sugarcane 12.2 9.8 15.8 29.6
Cotton 0.5 0.4 0.6 36.7
Poverty and calorie deficiency rates
2009 2014 2019
Poverty Base
54.6 51.0 46.8
CAADP 45.2 36.1
Calorie deficiency
Base 49.5
45.5 40.2
CAADP 41.0 32.6
Conclusions
Neglecting the agricultural sector has proven to be damaging to poverty reduction efforts and food security
An agricultural revival is needed if Mozambique is to achieve agricultural growth and poverty reduction goals
Yield targets for achieving 7% growth are reasonable and within reach
Prioritization is important as crops differ in terms of their effectiveness in contributing to growth, poverty reduction, or nutrition
Policies that target only “breadbasket” regions may lead to unequal outcomes
Final remarks: Agriculture and the broader development strategy
Does agriculture run the risk of Dutch disease (the “resource curse”)?
What are the potential spillover effects for agriculture from investments in “development corridors”
Development corridors: east-west versus north-south? − CGE results: even under CAADP scenario we still see
significant gains for households in the south is the
“common national market assumption” valid?