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Role of Agriculture in the Development of LDCs

THE WORKSHOP FOR THE NATIONAL FOCAL POINTS ON THE IMPLEMENTATION OF THE BRUSSELS PROGRAMME OF ACTION FOR THE LEAST DEVELOPED COUNTRIES New York 17 – 21 May 2004,. Role of Agriculture in the Development of LDCs. Harmon C. Thomas Chief Commodity Policy and Projections Service

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Role of Agriculture in the Development of LDCs

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  1. THE WORKSHOP FOR THE NATIONAL FOCAL POINTS ON THE IMPLEMENTATION OF THE BRUSSELS PROGRAMME OF ACTION FOR THE LEAST DEVELOPED COUNTRIESNew York 17 – 21 May 2004, Role of Agriculture in the Development of LDCs Harmon C. Thomas Chief Commodity Policy and Projections Service Commodities and Trade Division FAO, Rome

  2. Outline of the Presentation I. Development challenges facing LDCs and the role of the agricultural sector • FAO approach to the implementation of the BPoA

  3. Development challenges facing LDCs and the role of the agricultural sector • Challenges: - reducing poverty; and - enhancing food security

  4. Extent of poverty: proportion of the poor in total population(Select LDCs) Source: World Bank , World Development Indicators 2003

  5. Extent of food insecurity: percentage of population undernourished, 1998-2000 (available data for 36 LDCs) Source: FAO, SOFI 2002

  6. Development challenges and the agricultural sector • Importance of the agricultural sector in LDCs • Why is the agricultural potential in LDCs underexploited?

  7. 1. Importance of Agriculture in LDCs • Proportion of population dependent on agricultural activities • Share of agriculture in GDP - Share of agriculture in exports - Agricultural potential

  8. The rural sector: population size, 2001

  9. Share of population dependent on agriculture for livelihood(frequency distribution of LDCs)

  10. Share of agriculture in GDP(frequency distribution of 42 LDCs)

  11. Share of agricultural products in total merchandise exports (frequency distribution of LDCs)

  12. Share ofsingle agricultural commodity in total merchandise exports(frequency distribution of LDCs) Source: FAO (2003)

  13. Agricultural potential (35 LDCs) Source: FAO 2003

  14. 2. Why is the agricultural potential in LDCs underexploited? • Domestic factors • Low investment and utilization of modern technology • Ineffective domestic policy frameworks • External factors - distorted international markets and the challenges arising from integrating into such markets

  15. Domestic factorsLow investment in agriculture Source: FAO (2003)

  16. Government expenditure on agriculture as a share of total expenditure Source: FAO (2003)

  17. External assistance (ODA) to agriculture in all developing countries

  18. Why is the agricultural potential in LDCs underexploited? External factors • Differences in support to agriculture (rich vs. poor countries) • Challenges arising from integrating into distorted international agricultural markets

  19. External factors .... consequences

  20. External factors .... consequences Agricultural trade balance, 1960 to 2000 Least developed countries Source: FAO data

  21. External factors .... consequences • Specific challenges • Displacement effect of import surges • Continuing rise in food imports • Financing the increasing food import bills

  22. Displacement effects of import surgesExamples of import surges and production shortfalls

  23. Rising commercial food import bills – LDCs & NFIDCs

  24. Rising commercial food import bills - LDCs Source: FAO (2003)

  25. Ability to finance food import billsFood imports as a percentage of total exports of goods and services minus debt service, 1999

  26. Conclusions: What needs to be done from a development and food security perspective? • Reform international agricultural markets • by reducing/eliminating distortions in such markets • Improve the policy incentives in LDCs for productivity raising investments in agriculture • Financial and technical assistance • to help LDCs diversify from excessive economic dependence on one or a few agricultural commodities

  27. Outline of the Presentation I. Development challenges facing LDCs and the role of the agricultural sector • FAO approach to the implementation of the BPoA

  28. II. FAO Approach to the implementation of the Brussels PoA • Mainstreaming those aspects of the PoA within FAO’s mandate into its existing Programme of Work. • Addressing the specific problems of LDCs on a case-by-case basis through FAO’s technical assistance programme. • Annual reporting to FAO Council on progress of implementation

  29. II. FAO Approach to the implementation of the Brussels PoA FAO’s technical assistance to LDCs is focussed on: • Strengthening supply-side capacity and production • Responding to emergencies

  30. FAO Contributions to the implementation of Brussels PoA: major areas of assistance

  31. FAO Contributions to the implementation of Brussels PoA: major areas of assistance

  32. FAO and mobilization of resources for LDCs • FAO field programme • In 2003, more than 510 FAO field projects, with a total budget value of US$ 532 million, were active in 45 of the 49 LDCs. • FAO assistance to LDCs in mobilising external assistance to agriculture and rural development projects. • During 2001 – 2003, FAO assisted LDCs by mobilizing external funding commitments for 84 agricultural and rural development projects, amounting to total investments of US$1,428.9 million.

  33. FAO Field Programme Delivery in LDCs by technical sector, 2003

  34. Thank you

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