Discussion Points For Chapter

• Strategies can provide useful frameworks for policy reforms. A strategy constitutes both a vision of the sector's future and a 'road map' for getting there. Public sector investments are one of the means for implementing strategies, but increasingly strategies concentrate on issues related to institutions, legal frameworks, the functioning of markets, and resource endowments. Both equity and efficiency objectives should be taken into account in a strategy.

• Sometimes, it is asked why an agricultural policy is needed - what sets agriculture apart from other sectors of the economy? A traditional justification for an agricultural strategy is the size of the sector. In most developing countries, it is the largest employer of labor and the largest single earner of foreign exchange, and it is usually larger than the manufacturing sector alone. It also places major demands on a country's natural resource base, especially water and soils. A more fundamental justification for an agricultural policy is that transfers of rural labor out of agriculture represent essentially irreversible flows of resources in the economy, and hence neglect of agriculture can give rise to permanent and not necessarily desirable structural changes in the economy. Another consideration is that economic institutions are generally less well developed in rural areas than in cities, and therefore special policy attention is required to strengthen those institutions.

• The instruments of agricultural policy increasingly are indirect and multi-sectoral in nature. Governments are now less directly involved in production and marketing activities and more concerned to ensure the adequate functioning of factor and product markets in rural areas, and the adequate development of economic institutions. Hence, the regulatory and legislative role of policy has acquired greater importance.

• The basic areas of policy for agricultural growth, including the supporting policies for the macroeconomy and for other sectors, include (1) policies that influence relative prices, (2) policies for natural and human resources, and (3) policies to promote access to inputs, output markets and agricultural technology.

• In order that public sector programs and investments may have their greatest benefits, they should be designed in the context of a strategy or a policy framework. They are means of implementing policies.

• The most fundamental objective of agricultural policy is not increasing production but rather human development, helping to meet basic human needs. Increasing rural household incomes is a key to promoting fulfillment of this objective, and this, in turn, requires emphasis on productivity increases and adequate real farmgate prices.

• The principles that underpin sound agricultural policy include economic sustainability (delivering real benefits), social sustainability (reducing poverty), fiscal sustainability, institutional sus-tainability and environmental sustainability.

• The role of government has evolved considerably in recent decades. It is now a more indirect role than before but it is no less powerful. There is a consensus that a government's responsibilities include provision of public goods, definition and protection of property rights (of many kinds), promotion of competition, improving the functioning of markets in other ways through regulation and institutional development, provision of social insurance, and economic stabilization. Sometimes, the improvement of functioning of markets requires policies that facilitate better risk management. Conflict resolution also is accepted as an important role for government. A more controversial role, but still accepted in some circumstances, is the redistribution of economic assets among economic strata. In many cases, governments are best placed to promote and fund activities, while leaving their implementation and management in the hands of the private sector or NGOs.

• Decision makers in developing agriculture are diverse and include many kinds of local organizations, businesses, NGOs and local governments and decentralized governmental agencies as well as central governments. International development agencies also play decision-making roles in many circumstances.

• At the central government level, policy implementation occurs through five channels: new legislation, administrative decisions and decrees, investment projects (capital account expenditures), programs (current account expenditures) and voluntary implementation by the private sector and civil society. Implementation is a demanding task that requires conviction, consensus and coordination. Implementation plans and monitoring are essential components of successful implementation.

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