Executive Director – CARDI

1. THE REAL CONTRIBUTION OF AGRICULTURE: ITS IMPACT ON PLANNING THE DEVELOPMENT OF SUSTAINABLE AGRICULTURE Executive Director – CARDI Presented by Francis Asiedu Manager, Technical Services FANRPAN Regional Policy Dialogue & Annual General Meeting Maputo, Mozambique 31 August – 4 September 2009 CARDI - Improving Lives Through Agricultural Research

2. Presentation Outline • Introduction • World Bank report on agriculture for development • Popular view of agriculture • Objectives of paper • Real value in agriculture – Study by IICA • GDP contribution – Agriculture and Agri-food vs. Primary agriculture • Agricultural linkages • Agriculture’s multiplier effects • Impact on planning for sustainable development of agriculture

3. Introduction World Bank report on agriculture for development • The World Bank in its World Development Report, 2008, Agriculture for Development states: • “In the 21st century, agriculture continues to be a fundamental instrument for sustainable development and poverty reduction • To achieve this there is the need for the: • Introduction of more sustainable production systems • Innovative policy initiatives and strong political commitment • Improvement in local, national and global governance”

4. Introduction Popular view of Agriculture • Importance attached to agriculture, generally, is weak in most developing countries • This apathy may be due to or may have contributed to the decline in agricultural production • Contribution of agriculture to nation building is measured by an agricultural GDP that is generally low • Result: Difficulty for agricultural practitioners, including Ministers, to successfully seek the necessary resources and /or political will and support

5. Introduction Objectives of Paper • This paper: • Highlights 2004 study by Inter-American Institute for Cooperation on Agriculture (IICA) that indicates the “real value” of agriculture • Suggests ways in which the results could influence the planning for the repositioning of the sector into the “New” Agriculture

6. Real Value in Agriculture IICA Study: Background • IICA notes: • Agriculture’s contribution to economic development undervalued since traditional method used measures only primary production; ignoring backward and forward linkages with rest of the economy • Traditional methodology also ignores the growing demand for environmental goods and services from urban centres • To evaluate its impact on poverty alleviation strategies, account must be taken of agriculture’s effects on income distribution among rural and urban dwellers

7. Real Value in Agriculture IICA Study: Methodology • Used Social Accounting Matrices (SAMs): • SAMs make it possible to examine the structural links between production, consumption, trade and the accumulation and distribution of income • Eleven countries in original study: • Argentina, Brazil, Canada, Chile, Colombia, Costa Rica, Mexico, Peru, United States, Uruguay and Venezuela • Subsequently similar study done for Trinidad and Tobago

8. IICA Study: Results 1: Contribution to GDP

9. IICA Study: Results 1: Contribution to GDP (cont’d)

10. Real Value in Agriculture IICA Study: Results 2: Agricultural Linkages • Agriculture - source of inputs for other industries, a source of foreign exchange, an important generator of value added and of wealth which remains in rural areas: • Seventy-four per cent of primary production goes into other production • Fifty-three cents of every dollar produced by agriculture is in the form of value added • The food and agro-industrial sectors generate 42 cents of value added for each dollar produced, and they pay 58 cents for inputs for every dollar in production • Most of this remuneration stays in the region, with at least, 53 cents of every dollar from primary agriculture remaining in rural areas

11. Real Value in Agriculture IICA Study: Results 3: Agriculture’s Multiplier Effects • Each additional unit demanded from the primary sector has a strong effect on other sectors. For example: • In Canada, 3.1 additional units derived output are generated • In Argentina, as many as 5.5 additional units

12. Real Value in Agriculture IICA Study: Summary • The use of SAMs showed that: • An increase in the GDP of agriculture to its real value • As an economy develops and diversifies, the primary agricultural sector loses weight in terms of GDP but develops strong linkages with the rest of the economy • Agriculture exhibits very strong backward and forward linkages within and outside of the sector • Agriculture supports and promotes the development of rural areas and hence the quality of rural life • The sector exhibits strong multiplier effects with other economic sectors

13. Impact on Planning for Sustainable Agricultural Development IICA Study as Tools for Positive Thought Processes • The results have provided agricultural stakeholders with empirical evidence of the industry as a key driver of development. Therefore, stakeholders must approach the planning for repositioning of agriculture : • With confidence • Must discard the role of mendicants • Must portray themselves as the efficient and effective Directors and Managers of a first class industry • Must be champions of Advocacy for public goodwill, but more so for political will. The Lilliendal Declaration (Caribbean, 2009) and the Maputo Declaration (Southern Africa, 2002) are examples of outcomes of such advocacy

14. Impact on Planning for Sustainable Agricultural Development Concepts in Planning the Repositioning: 1. Value Chain • This approach is necessary to take advantage of the backward and forward linkages that are key elements in the realization of the real value of agriculture

15. Impact on Planning for Sustainable Agricultural Development Concepts in Planning the Repositioning: 2. Working Together • The utilization of the Value chain dictates Working Together, especially as Clusters (Building Trust) • In the area of R&D, where CARDI is involved, Working Together is implemented through Research, Development and Application Chain

17. Impact on Planning for Sustainable Agricultural Development Concepts in Planning the Repositioning: 4. Accountability and Transparency • To facilitate Building Trust there must be Accountability & Transparency • This requires Multisectoral approach where partners agree on plans, objectives, and expected results and responsibilities

18. Impact on Planning for Sustainable Agricultural Development Concepts in Planning the Repositioning: 5. “New” Agriculture • To facilitate this multisectoral involvement leads to the final concept, the development of the “New” Agriculture. • This is Cabinet responsibility, requiring support to Minister of Agriculture by entire Cabinet, especially the President / Prime Minister • This Cabinet Responsibility paradigm is represented by the saying “Agriculture is Too Important to be Left in the Hands of Agriculturalists alone”: A truism for the achievement of the Real Value of Agriculture and the realization of the “New” Agriculture

19. Thank You and God Bless! www.cardi.org