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low-income countries have had few if
any telecommunication links with the
outside world. Markets do not work
well in an information vacuum, and it
creates opportunities for unscrupulous
middlemen to exploit farmers who
have no way to know the prices in other
markets. This has changed rapidly with
the advent of the cellular telephone and
construction of cell towers throughout
many poor countries. Lack of rural electrification
is also a severe impediment
to development of the nonfarm rural
economy—including food processing
to reduce large post-harvest losses and
delivery of rural health care and educational
services.
Investments in Public Goods
Public investments in agricultural
research have been an important source
of the large differences in crop yields
per hectare observed across regions.
Agricultural technologies tend to be
location-specific. The tools of agricultural
research are highly mobile, but
plant varieties need to be optimized for
each local agroecosystem through adaptive
agricultural research.
With global climate change, all
agroecosystems will be shifting. Larger
investments in adaptive research will be
required to sustain present productivity
levels—not to mention that the average
productivity of land already in use will
need to be doubled.
Public investments in agricultural
research and technology transfer played
a large role in the agricultural development
of the presently high-income
countries that enjoy strong agricultural
productivity levels. Research results
were made freely available, and publicly
supported farmer education programs
were created to encourage their diffusion.
These investments benefited farmers
through higher household incomes
and benefited consumers through
lower-cost food.
The social rates of return on the
public sector’s investments in rural
infrastructure, education, health and
agricultural research are extremely
high. In low-income countries, where,
as noted above, almost three-quarters of
people in extreme poverty and hunger
are in rural areas, the agricultural sec-
tor is contributing less to the national
food supply and to world food security
than is economically efficient and environmentally
sustainable. Nevertheless,
investments in agricultural and rural
development by low-income country
governments, official development
assistance and international development
bank lending declined from the
mid-1980s to negligible levels until a
small turnaround occurred after the
food price spike of 2008.
Moreover, with an eye on keeping
food prices as low as possible for urban
consumers, the governments of many
low-income countries turned the terms
of trade against their farmers through
policy interventions in markets, forcing
them to pay more than the world market
price for their inputs and to receive
less than the world market price for
their output. This reduced the incentive
for farmers to implement productivityenhancing
technologies. In recent
decades, this discrimination against
farmers has been remedied in all parts
of the developing world except Sub-
Saharan Africa and Argentina, where it
continues.
Cutting Hunger in Half
In 2000, the heads of state of more than
200 countries meeting at the United
Nations adopted several Millennium
Development Goals, the first of which
is to cut the incidence of hunger and
poverty in the world by half by 2015.
This goal cannot be achieved unless the
rates are reduced in rural areas, where
the majority of hungry and poor people
reside.
Accomplishing this feat will require
a greatly strengthened commitment to
agricultural and rural development.
With a possible doubling of global
demand for agricultural products in the
first half of the 21st century, the world
needs low-income countries with a history
of underperforming agricultural
sectors to contribute more to their own
and the world’s food supply. Failure to
do so could result in adverse geopolitical
consequences. n
Robert L. Thompson is a visiting scholar
at SAIS. He is also a senior fellow at the
Chicago Council on Global Affairs and
a professor emeritus at the University of
Illinois at Urbana-Champaign.
2011–2012 11