The new dynamics of poverty and the role of science in poverty alleviation

1. The new dynamics of poverty and the role of sciencein poverty alleviation Javier M. Ekboir ILAC coordinator November 2010

2. Content of the presentation What is poverty alleviation? The dynamics of poverty today The role of research in poverty alleviation

3. What is poverty alleviation?

4. Measuring poverty alleviation Poverty alleviation has two benchmarks: Achieving food security and affording a healthy life • Food security can be improved by higher yields of staples, lower food prices or higher incomes Affording a healthy life can only be achieved with higher incomes

5. Where can these additional incomes come from? People living with 2.5 US dollars/day are still poor but have more food security • Extreme poverty is now defined as living with less than 1.25 US dollars/day If yields of staples increased threefold, small farmers would still be poor

6. Where can these additional incomes come from? (2) This is being increasingly recognized in the field of development Higher yields of staples can reduce labor requirements and allow farmers to undertake new income generating activities

7. Then Does poverty alleviation mean increasing food security or affording a healthy life? Can agricultural research help achieve food security? Can agricultural research help poor households to afford a healthy life?

8. The dynamics of poverty today

9. Five trends are shaping the dynamics of poverty today Globalization Urbanization Migration and remittances Increasing number of poor live in middle income countries Faster rate of technical change in agriculture

10. Globalization is changing the markets for staples Local and global markets for staples became more integrated after 1982 Price of staples in areas that were close to import markets fell • Profitability of small farms fell as well

11. Globalization is changing the markets for staples (2) Contrary to most expert forecasts, production of staples in small farms did not disappear The price elasticity of food production in small farms is low and decreasing

12. Globalization is opening high value (HV) opportunities International markets for HV products expanded Easier access to technical and commercial information Easier access to equipment and inputs But only a few farmers could take advantage of the new opportunities

13. Urbanization More than half of the world population now lives in urban areas • Consumption patterns are changing • The “supermarket revolution” • Domestic markets for agricultural products (staples and HV) are expanding

14. How do small farmers participate in HV agricultural markets? • HV export markets are mostly supplied by large farmers • HV domestic markets are mostly supplied by larger, better endowed small farmers • Few small farmers can sell in these markets • Many small farmers participate as laborers

15. Technical change and HV markets Most of the technologies used in HV markets were developed by private firms and NGOs • International and public research institutes contributed little to the process • Some international research institutes participated in the development of niche markets

16. Technical change and HV markets (2) But their effect on poverty was limited Are these institutes still relevant?

17. Migration and remittances Local and distant labor markets also became more integrated Easier travel and improved financial services meant that people from rural areas could work in distant locations and send remittances back home In 2006, 150 million international migrants sent home US$ 300 billion The average remittance in LA was 300 US$/month

18. How are remittances used? (IFAD, IADB) • Education and health (i.e., human capital that can be used in off-farm employment) • Housing • Only a small proportion goes to productive activities, including agriculture

19. What is the role of agriculture in diversified rural livelihood strategies? In some areas (LA), the proportion of income rural households derive from agriculture is less than 30% In other areas (Africa, China) it is still more than 70% But the trend is clear: the importance of agriculture as a source of income is falling for most poor rural households

20. Where do the poor live? • In 1990 two thirds of the poor lived in low income countries • In 2007 three quarters of the poor lived in middle income countries (especially China, India, Indonesia, Nigeria and Pakistan) • The other quarter lives mostly in Africa • The change occurred because several large countries grew very fast, increasing income disparities • These countries are supposed to be able to take care of their poor • Some are building their research capabilities but mostly outside agriculture

21. The role of research in poverty alleviation

22. What is an innovation? • Anything new successfully introduced into an economic or social process • The vast majority of researchers do not innovate • They invent Inventions only become innovations when they are used in social or economic processes

23. The importance of innovation capabilities • Not all people can innovate • Innovation and entrepreneurial capabilities are strongly determined by innate factors • They are not related to education • There is a limit to how much they can be strengthened

24. Poor households are heterogeneous • Households with innovation capabilities who are operating commercially • Households with innovation capabilities who are not operating commercially • Households without innovation capabilities

25. Households with innovationcapabilities who are operating commercially (5%) • They are integrated into innovation or market networks • Most of their technologies are imported by private firms, NGOs or farmer associations • Private standards are increasingly important and influence technical change

26. Households with innovationcapabilities who are operating commercially (5%) (2) • International and public research institutes are marginal suppliers of scientific information for these markets • Public institutes should develop capabilities to research local issues that cannot be solved with foreign information

27. Households with innovationcapabilities who are not operatingcommercially (5 to 10%) • Their most pressing need is not production techniques • They need social and human capital to integrate into innovation and commercial networks • Also need access to efficient output and input markets

28. Households with innovationcapabilities who are not operatingcommercially (5 to 10%)(2) • Innovation brokers and NGOs are needed to help these farmers integrate into more dynamic markets • Because there are no universal recipes on how to do it, new social science research is needed Researchers should help to understand how these households can be identified and how they can be integrated into innovation and commercial networks

29. Households without entrepreneurial capabilities (80 to 90%) • These households have diversified livelihood strategies • Improved seeds and management techniques can increase food security • They need skills to make a living not as farmers • Researchers can provide new techniques for orphan crops, help to manage on-farm conservation, increase food security

30. Recent trends in the organization of science • Research teams are increasingly inter-disciplinary, inter-institutional, short-lived • Research is increasingly conducted by networks of actors, often including non-researchers • Research is often not conducted in research laboratories, but in private firms and fields

31. Conclusions • Increased productivity of staples will increase food security • But will have a limited impact on poverty • High value markets will reduce poverty mainly by creating employment in rural areas and mobilizing the rural economy • The major impact on poverty will come from migration and remittances

32. Conclusions (2) • Agricultural development requires new types of research • With new partnerships • International and public research institutes are not prepared for this type of research Changing international and public research institutes is very difficult Agricultural and research policies have to be targeted to specific groups of rural actors

33. Thanks