Search

In the context of urbanization and expanding markets for agricultural products, the prospects for smallholder farming systems to contribute to development across sub-Saharan Africa is particularly relevant today. Despite scepticism among some, arguments in the literature point to potential productivity, inclusion and multiplier non-farm growth benefits arising from the development of small-farming systems. This research investigates such viewpoints by categorizing countries according to whether national agriculture is small-farm dominated or large-farm dominated and looking at variables dependent on relevant socio-economic phenomena. Findings indicate small-farming countries have performed better in improving levels of productivity, reducing poverty and advancing structural transformation in the period in question. Findings are robust to the effects of differing levels of rural investment. However, sample sizes and the nature of data collection in a context of scarcity limits the capacity to generalize findings. Although the research finds small-farming countries outperform large-farming countries in progress across these variables, bivariate analysis does not establish that linkages from agricultural development to first, poverty reduction and, second, structural transformation are stronger in small-farming contexts. Overall, findings show that possessing an agricultural sector dominated by smallholdings is no impediment to making progress across key indicators of social and economic development. Consequently, reflection on the merits of public expenditure to support smallholder models and opportunities to leverage private finance in smallholder farming are emphasized. Further, the scope for integration of small- and large-farming models in mutually beneficial arrangements can be a useful complement to mechanisms that support exclusively smallholder farming models.

This paper shows new empirical regularities indicating that the structure of trade connections affects the trade-growth nexus. System generalized method of moments estimations indicate that key structural features associated with the composition of traded products and partners matter for growth. The results show that increases in the degree of intra-industry trade, greater insertion into the middle of global value chains, and increases in the shares of differentiated goods, skilled labor-intensive goods, and high-tech-intensive goods in traded baskets are all associated with higher income growth. An increase in the share of trade with countries at the core of the global trade network is also associated with greater growth effects. However, many of these effects are non-linear and depend on the degree of trade openness and labor force education. The results suggest that technological diffusion and learning spillovers play some role in the growth effects associated with the nature of trade connections.

This paper addresses the possible impact of rising smallholder incomes on local non-agricultural development in a case study area located in the Eastern Cape province of South Africa. It determines how increased rural incomes are spent on a mix of goods and services, and debates the implications of these spending patterns for growth in rural areas through the alleviation of demand constraints. These results make it possible to identify areas of intervention necessary for sustaining growth originating from stimulus to tradable agriculture from economic reforms. This paper thus contributes to an emerging literature on the possible impact of promoting smallholder agriculture in South Africa on rural livelihoods.

This paper contributes to the literature by empirically examining whether the influence of public debt on economic growth differs between the short and the long run and presents different patterns across euro-area countries. To this end, we use annual data from both central and peripheral countries of the European Economic and Monetary Union (EMU) for the 1960-2012 period and estimate a growth model augmented for public debt using the Autoregressive Distributed Lag (ARDL) bounds testing approach. Our findings tend to support the view that public debt always has a negative impact on the long-run performance of EMU countries, whilst its short-run effect may be positive depending on the country.

The primary concern of the present study is to re-examine the relationship between Foreign Direct Investment (FDI) and Gross Domestic Product (GDP) in Malaysia when savings-investment gap recorded a surplus in the late 90’s. It focuses on the transition period from shortage to surplus in savings, which has not been given attention by many previous studies, especially in Malaysia. Using time series analysis, the quarterly data consisting of FDI, GDP and trade openness from year 2000 until 2010 were carefully analyzed and Autoregressive Distributed Lag (ARDL) model for integration and Granger Causality tests were employed. The results revealed that all the variables used in the study are co-integrated in the long run. Furthermore, the results also show that there exists the unidirectional Granger Causality from FDI to GDP. Thus, this study concludes that Malaysia still relies on FDI to boost its economic growth even though there is a surplus in savings-investment gap. DOI: 10.5901/mjss.2015.v6n4s2p652

Accelerating economic growth and poverty reduction are and continue to be the critical policy challenges in Ethiopia. The sluggish growth in agriculture coupled with lack of broad-based economic growth raises debates over the relevant direction and emphasis of development interventions in the country. In this study, we develop a social accounting matrix (SAM) for a cereal dependent village economy in rural Ethiopia and examine relevant growth options in terms of their impact on output, household income, investments in human and environmental capital in the study village. Apart from providing a quantitative analysis of a village economy, the study considers a sectoral disaggregation that takes into account the diversity of not only economic activities in terms of supply response but also heterogeneity of rural households. This study also incorporates investment in human and environmental capital in the analysis of growth linkages using a village social accounting matrix-based framework. Using constrained and unconstrained SAM multipliers, growth linkages of different sectors are explored and activities that best promote growth and household income are identified. Since the growth linkage model is based on the detailed SAM estimated for the village economy, this helps to gauge the effects of policy reforms and strategies on growth, household livelihoods, and investment in human and environmental capital. Accordingly, some simulations are performed to investigate the trade-offs and complementarities of economic and environmental policies on the village economy. Key development pathways and sectoral investment priorities are also identified that help to move the village economy in the direction of sustainable development.

Considering the heterogeneity of the countries of southern Africa and the presence of South Africa and other middle-income countries in the region, southern Africa has a unique opportunity to exploit agricultural potential and regional trade opportunities through regional dynamics and integration. We analyze the implications of such opportunities for the growth of the low-income countries, using a regional general equilibrium model that captures growth linkages. We find that growth in the middle-income southern African countries, such as South Africa, benefits the region’s low-income countries through increased demand for their agricultural exports. Agricultural productivity growth, however, is necessary for low-income countries to take advantage of South Africa’s growth. Productivity growth in the low-income countries’ grain and livestock sectors generates more growth in GDP and food consumption than growth in nontraditional export crops. Unlike other regions where growth in grain production is likely to be constrained by domestic demand, expanding middle-income economies in southern Africa provide additional demand for grains and livestock, slowing the decline in grain prices in the region.

This paper measures linkages between farm and non-farm activities in rural Mexico using a multiplier model based on social accounting matrices (SAMs) from survey data for five villages at differing income levels and in different agro-ecological and market zones. We extend this analysis to a "mini-region" that includes three villages and their larger administrative center. By applying a constrained SAM multiplier model, the paper examines how economic shocks in rural areas affect non-farm incomes in rural villages, in neighboring rural towns and in larger regional cities. Two exogenous shocks on non-farm activity are examined: pure income transfers; and increased agricultural productivity. Experiments assume a perfectly inelastic supply of agricultural goods, as in "semi inputoutput" and "economic base" models. Results show that most farm-nonfarm diversification is between villages and regional urban centers. The largest linkages are with markets outside, rather than within, villages: an experimental $100 increase in exogenous income is linked with a $2 increase in non-farm production but a $51 increase in demand for imported goods. This is evidence of "agriculture-demand-ledindustrialization" and explains growth of regional urban centers, which now accounts for most of Mexico's urban growth. Our analysis highlights the complex economic interactions between villages and towns in what probably is a mutually beneficial relationship broadly consistent with comparative advantage. Results suggest that increasing the income of village households can stimulate growth of the rural non-farm commercial activity in towns and small cities. Comparisons across villages suggest that investments in rural infrastructure can facilitate these commercial linkages between villages and towns.

This study analyses survey data gathered from small and large poultry producers in the rural areas of KwaZulu-Natal, and highlights factors constraining the impact of commercial poultry production on the local economy. It was found that small-scale poultry production has the ability to initiate economic growth through the "export" of its products and to draw under-utilised resources such as labour into production. The impact of the subsequent multiplier effect is most likely strongest in the non-tradable, non-agricultural sector. Alleviating constraints for a large number of small enterprises is expected to impact more positively on the rural economy than if a few larger enterprises were encouraged to grow bigger. The descriptive results suggest that small producers face much higher transaction costs than larger producers. Government policies should focus on absorbing some of these transaction costs to nurture economic growth in the rural areas of KwaZulu-Natal, i.e. by improving education, physical infrastructure and technology transfer through extension. Other important interventions include the provision of mentoring and training services for new managers including institution, legal and financial management instruction.

This study analyses survey data gathered from small and large-scale poultry producers in the rural areas of KwaZulu-Natal, and highlights factors constraining the impact of commercial poultry production on the local economy. It was found that small-scale poultry production has the ability to initiate economic growth by "exporting" its products and can draw under-utilised resources such as labour into production. The impact of the subsequent multiplier effect is generally strongest in the non-tradable, non-agricultural sector. Alleviating constraints for a large number of small enterprises is expected to impact more positively on the rural economy than if a few larger enterprises were encouraged to grow bigger. The descriptive results suggest that small producers face higher transaction costs. Government policies should focus on absorbing some of these transaction costs by improving education, physical infrastructure and technology transfer. Other important interventions include the provision of mentoring and training services for new managers including institution, legal and financial management instruction.

Metadata only record After reviewing the literature on agricultural growth linkages in Africa, this report examines the mix of farm and non-farm goods and services that rural Africans purchase, and the implications of these expenditures for rural economic growth in five African countries: Burkina Faso, Niger, Senegal, Zambia, and Zimbabwe. In the West African countries, in addition to farm and non-farm sectors, individual commodities are sorted into tradable and non-tradable categories, and by geographic zones of interest: local, national, and multi-country regional. The same process is followed in Southern Africa for Zambia, but no assumptions are made on regional tradability because of lack of data. Fully comparable data were not available for Zimbabwe, but some similarities in rural consumption patterns could be detected.

This report addresses the impact of rising smallholder incomes on local nonagricultural development in the Eastern Cape of South Africa. It determines how increased rural incomes are spent on a mix of goods and services, and debates the implications of these spending patterns for growth in rural areas through the alleviation of demand constraints. These results make it possible to identify areas of intervention necessary for sustaining growth originating from stimulus to tradable agriculture from economic reforms. This report thus contributes to an emerging literature on the possible impact of promoting smallholder agriculture in South Africa on rural livelihoods.

The comparative effects on GDP and household incomes associated with various pathways of agricultural growth in Zimbabwe are investigated, based on SAM (social accounting matrix) multiplier analysis. Among the five growth paths considered, the "smallholder road to agricultural development" yields the largest increase in national income. It benefits smallholder households the most, but the income gains to the two other low-income household groups are lower compared to those arising from the four other agricultural growth paths. Foodcrop production, in which smallholders have a dominant share, shows a larger GDP multiplier than both the traditional (tobacco and cotton) and nontraditional (horticulture)export crop sectors, which are dominated by large-scale commercial farms., "September 1998." "MERRISA: Macro Economic Reforms and Regional Integration in Southern Africa." "Presented as a contributed paper at the IAAE Inter-conference Symposium, Challenges Facing Agriculture in Southern Africa, held in Badplaas, South Africa, on August 10-16, 1998"--P. 3. Includes bibliographical references (p. 13-14).

The wide spread increase in rural purchasing power under the Green Revolution in Asia during the 1970s was key to increased rural employment and industrialization. Studies suggested that an extra dollar of agricultural income was typically associated with an additional $0.80 of nonagricultural income from local enterprises stimulated by the spending of farm house holds. Studies in Africa, where the Green Revolution was harder to discern, tended to be much more pessimistic. This report revisits these issues using especially detailed panel data sets on rural consumption and incomes, collected by IFPRI and collaborating national institutions for a variety of purposes during the mid to late 1980s in Burkina Faso, Niger, Senegal, Zambia, and Zimbabwe. Results suggest that house hold spending of higher rural incomes from increased exports has the potential to greatly stimulate further rural income increases, on a scale that even surpasses experience in Asia. Central to this is the claim that many of the goods and services that figure heavily in rural consumption patterns in Sub-Saharan Africa are nontradables at current transport costs and prices. These include perishable fruits, vegetables, animal products, and prepared foods, services of all kinds, local handicrafts, and some bulky local starches of too low value to bear the costs of importing or exporting. By focusing on the nontradable nature of large sectors of African rural economies, the report evokes a theme central to many of IFPRI’s fieldwork-based studies: why some development strategies are more effective at achieving both growth and poverty Alleviation than others. Sustained growth in rural incomes that is widely spread across households is shown to be an effective way to furnish the sustained additional local purchasing power necessary to promote aggregate production of non tradable items, while increasing the incomes of large numbers of poor people. The report does not deal with the interventions necessary to start growth in rural areas, other than to illustrate that it must involve bringing new external funds into localities on a recurring basis, such as would be the case from expansion of agricultural exports. The report thus also raises another major theme of IFPRI’s work, the complex role of agricultural and food policy in over all economic development. Jump-starting the production of agricultural tradable is shown to have much higher returns than thought previously, because of growth link ages. Conversely, rising food staple prices are shown to have the potential to choke off growth from demand-side link ages if the conditions for a high supply response to prices are not in place. Success in raising household incomes in rural areas will rapidly lead to greatly increased demand for wage goods such as food, many of which are nontradable in rural Africa. If increased local production is not forth coming, the relative price of these items will rise rapidly, reducing the welfare of large numbers of poor people and eventually raising production costs for the agricultural tradable that provide the engine of growth.