The New Green Revolution

From Farm Revolution to Poverty Alleviation

Surging food prices have spurred a renewed interest in improving global agriculture. But world leaders are now turning to agricultural development not only to promote food security but alleviate poverty too.

The Perils of 1970s’ Green Revolution

A major food crisis in early 2008 prompted a rethink of policies and programs in improving agriculture. In 2009, some USD20 billion was pledged in a G-8 summit in Italy to help develop agriculture. The U.S. government also shifted its foreign aid program from proving American grain surpluses to investing in farm productivity.

• The Food and Agriculture Organization says that food production should double by 2050 to keep pace with increasing demand. Some USD30 billion in investments are needed each year to attain this target.

 The last time the agriculture sector heaped such resources and interest was during the Green Revolution in the 1970s. Apart from farm investments made by governments and international aid agencies, agricultural innovations such as the development of high-yield strains of important food crops also helped increase production.

But an increase in farm production also meant a rise in supplies, which triggered plummeting of prices.

• Food prices dropped by some 60 percent, accounting for deflation, by the late 1980s from their peak in the mid-1970s.

Moreover, agriculture lost its place in the international development arena, with donors focusing their resources on other social problems such as health and education services.

• Only 3.5 percent of global official development assistance was allocated for agriculture in 2004, down from 18 percent in 1979.

While food production declined, demand for food increased. Land that was previously used to cultivate grains was used to raise livestock as consumers in emerging nations such China and India became richer and demanded more meat. Some land and resources were also diverted to the production of biofuels.

New Green Revolution

Now governments and development agencies are seeking to revive agriculture in the hopes of alleviating poverty. Feeble agricultural systems have been identified as a poverty trap.

• Some 75 percent of the world's remaining poor live in rural areas, where farming is the primary source of income.

Inspired by the success of East Asia, policymakers are calling for the alleviation of poverty by helping farmers leave their farms for jobs in factories and urban centers. But FAO estimates indicate that the strategy is insufficient, as income levels in rural areas still lag behind those in urban areas in many countries.

• More than 1 billion poor people were going hungry in 2009, a record level, according to FAO.

 The Indian Case

In India, Prime Minister Manmohan Singh urged "another Green Revolution" in 2009. Between fiscal years 2003-04 and 2008-09, India’s central government quadrupled its allocation for agriculture. The government built farm-to-market roads, cancelled some of the debts of farmers, and increased minimum purchase prices on cotton, rice and other crops.

Indian policymakers also unveiled welfare programs targeting farmers. The 2005 Bharat Nirman program sought to provide electricity, housing and irrigation systems to farmers, while the National Rural Employment Guarantee Scheme launched in 2006 pledged at least 100 days of work annually for poor farming households, usually on public-works and infrastructure projects.

In 2009, federal financing for the rural jobs initiative was jacked up 144 percent to more than USD8 billion, while funding for Bharat Nirman was scaled up by 45 percent.

Indian farmers, however, complain that the government’s agricultural interventions were mis-targeted. They are calling for better farming infrastructure primarily to ensure reliable water supply for their crops. Some even urge the government to adopt trade protectionist policies by providing more subsidies, protection from imports, increased access to finance and price supports.

But international organizations such as the World Bank oppose such protectionist policy, saying that trade liberalization in the farm sector would augment prices – in India’s case,  up to 20 percent for cotton and 7 percent for food grains, according to Christopher Delgado, policy adviser on agriculture and rural development at the Washington-based lender.  Such price increases would create more incentives for farmers to increase their production, subsequently raising farmers’ incomes and generating a new source for global demand.

Source:

Michael Schuman, “The New Green Revolution,” Time Magazine, October 26, 2009, pp. 14-19.