• Although historically agriculture has generated surpluses of labor, savings and foreign exchange that have facilitated the growth of other sectors, policies that attempt to tax agriculture in order to extract more surpluses, implicitly and explic
30. J. Mellor, 2000, pp. 1,8 and 10 [additional emphasis included].
itly, have proven counterproductive for growth and employment generation.
• Agricultural growth contributes proportionately more to economic development than industrial growth does, because the multiplier effects of agricultural growth on the domestic economy are greater.
• Studies have shown that agriculture is the most effective sector for reducing both rural and urban poverty, although the poor benefit less from agricultural growth in economies whose existing income distribution is very unequal.
• Sustaining adequate real price levels at the farmgate is one of the keys to agricultural growth and hence to poverty reduction. Attempting to pursue a policy of cheap food worsens the poverty problem in the long run.
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