Structural Change of Rural Economies and Globalization

1. Structural Change of Rural Economies and Globalization

2. Main hypotheses Rural households do adapt through diversified activity and income strategies which are reshaping rural economies Global agro-food markets restructuring reinforcerural economies’ differentiation Marginalization trends resulting from these processes of structural change could lead to risks of transitional dead-ends

3. General Design • Not an assessment / forecast / foresight: “only an update”!! • A 3-year comparative program implemented in 7 countries • Mexico • Kenya, Madagascar, Mali, Senegal • Morocco, Nicaragua • Two main phases: • Phase 1 : general country overviews • Phase 2 : Regional case studies + value chains reviews + rural household surveys • 26 regions, near 9,000 surveyed HH • A focus on rural incomes • National teams: Institutional & Operational partners • Contribution to the local policy debate

4. 2008 World Development Report Agriculture for Development

5. The WDR08 and the three worlds of agriculture

6. The Evolutionary Path

7. The policy diamond and the 3 exit pathways

8. Exple: Agriculture-based Countries

9. What do these 3 exit pathways mean? • Between the Ag. Specialization, rural diversification, and migration options what are the realistic / acceptable / viable /sustainable ones? What are the right shares? 10/20/70 or 40/40/20? => What is the room for maneuver of the policy makers?

10. What do we learn from the past? • The structural transformation of Western Europe and its offshots is embedded in Western imperialism [Bairoch, Braudel, Pomeranz, Chang, etc.] • The capture of America and domination of Western Europe during 5 centuries helped its structural transformation: specialization and migrations • The transformation of the so-called “emerging” countries occurred during the “nation state led period” [between the 2 WW => the 2nd globalization]

11. Where are the Ag. Based countries, what do they face, what can they do? • The Ag. based countries [mainly SSA] face huge challenges: • An incipient economic transition

12. Structural Change: East Asia vs SSA Manufacturing % GDP Agriculture % GDP

13. Where are the Ag. Based countries, what do they face, what can they do? • The Ag. based countries [mainly SSA] face huge challenges: • An incipient economic transition • An incomplete demographic transition

14. Yearly Cohorts

16. Where are the Ag. Based countries, what do they face? • The Ag. based countries [mainly SSA] face huge challenges: • An incipient economic transition • An incomplete demographic transition • The constraints of climate change • In the context of globalization: • High international competition • One size political framework • These challenges are insufficiently considered: =>it represents a historically unique configuration

17. What can they do? • Back to the 3 exit pathways… • And back to rural realities of the Ag.based countries… • Here some RuralStruc results can help: • The overall conclusions: • Huge heterogeneity • But… “sobering results”

18. Annual Income per Capita in the Surveyed Regions ($PPP 2007)

19. $PPP 1 Income Classes

20. Quintiles of Households by Region ($PPP 2007)

22. Structure of Households’ Global Income

24. What does it mean? • “If we want to eradicate hunger…” • “We” to need to deal with “the many”: family farms /smallholders because exits are limited… • The are no “market solutions only”: • Under $2 a day: no investment capacity • Need of public support: public goods - of course - but not only

25. What does it mean? • A need to focus first on food crops: • Food insecurity remains and rural households are risk adverse • Food crops are the most inclusive… • Then upgrade the added value: ag. diversification… transformation… • And keep in mind that rural diversification starts with the growing rural demand => Ag. Income remains a key