Rural Transformation for Food Security and Poverty Reduction Racha Ramadan Applying Quantitative Analysis to Development Issues Conference Bilbliotheca Alexandrina- 2018
Motivation “ Structural transformation is defined as the shift of an • economy’s structure from low-productivity, labour-intensive activities to higher productivity, capital and skill intensive activities ” (Structural Transformation in Developing countries –UN Habitat). As a result of successful structural change; employment • move from lower to higher productivity sectors and output in lower productivity sectors increases. Under structural transformation, the relative importance of • agriculture sector to the overall economy decreases!! 2
Take Home Messages Rural transformation matters for poverty reduction and • food security. At advanced stages of structural and rural • transformation, agribusiness and agro-industry play an important role. Micro data is needed to better understand rural • transformation and its impact on households’ welfare. 3
Structural Transformation Drawbacks Widening the gap between urban and rural labor • productivity. Women are trapped in low productivity sectors • (Marotta et al, 2015). Low agricultural per capita output and productivity • lead to dreadful effects on food security and social stability. Especially in a context of food crisis. The difficulties in feeding rapidly growing cities. • 4
Rural Transformation Under structural transformation, the relative importance of • agriculture sector to the overall economy decreases, but productivity of agriculture sector should increase. Rural Transformation! • “ Rural transformation involves rising agricultural productivity, • increasing commercialization and marketable surpluses, and diversification of production patterns and livelihoods. It also involves expanded decent off-farm employment and entrepreneurial opportunities, better rural coverage and access to services and infrastructure, and greater access to, and capacity to influence, relevant policy processes ”. (IFAD, 2016). Advantages of rural transformation include transition out of • poverty, women empowerment and ensuring food security. 5
Agricultural Development, Rural development and Rural Transformation are intertwinted with other larges processes 6
Stylized Facts
Distribution of VA by sectors (% of GDP) in different regions Agriculture Industrial Services 44 46 50 54 55 56 58 60 62 63 63 67 30 36 28 25 41 37 38 34 33 31 33 27 24 20 18 17 8 8 6 5 5 6 5 3 2000 2015 2000 2015 2000 2015 2000 2015 2000 2015 2000 2015 Central East Asia & Latin America Middle East & South Asia Sub-Saharan Europe and Pacific & the North Africa Africa the Baltics Caribbean 8 Source: World Development Indicators
Distribution of VA by sectors (% of GDP) in three MENA countries Agriculture Industry Service 50 53 56 57 58 62 33 36 29 30 30 27 17 14 13 11 11 11 2000 2015 2000 2015 2000 2015 Egypt Morocco Tunisia 9 Source: World Development Indicators
Rural Transformation - Poverty Food Security
Agricultural VA per Worker and GDP per capita (2000-2015) 3 2.5 y = 0.4183x + 0.7767 R² = 0.2028 2 GDP per capita Growth 1.5 1 0.5 0 -1 -0.5 0 0.5 1 1.5 2 2.5 -0.5 Rural Transformation 11
Agricultural VA per Worker and Food Security 100 90 80 Pr. of Children suffering fom anemia 70 60 50 y = -0.0005x + 43.718 40 R² = 0.3537 30 20 10 0 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000 -10 Ag VA per worker 12
Egypt
Poverty and Food Security in Egypt Poverty and Food security is an important challenge facing the Egyptian government: o 27.8 percent of the population considered as poor in 2014/2015. o A prevalence of undernourishment of 5 percent 2014/2015.
Urban and Rural Poverty 32 29 27 22 15 11 10 9 2000 2004 2008 2010 Urban poverty headcount ratio at national poverty lines (% of urban population) Rural poverty headcount ratio at national poverty lines (% of rural population) 15
o Egypt suffers from the double burden of malnutrition; under nutrition and over nutrition. o In 2014, the proportion of children under-five-year-olds who suffer from wasting has increased to 9.5%, those suffering from stunting reached 22.3% and the proportion of underweight reached 7%. o Anemia among children under-five-year-olds increased from 42% in 1990 to 45.4% in 2011. o In the same period, the proportion of women (pregnant and non-pregnant) suffering from anemia declined to 30% and 35% compared with 38% and 45% in 1990.
Employment in Industry and in Agriculture (% of total Employment) 32 32 32 31 31 30 30 30 29 29 28 28 28 28 27 26 25 25 25 24 24 24 24 23 22 22 22 21 21 21 20 20 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 17 Employment in industry (% of total employment) Employment in agriculture (% of total employment)
Agriculture Value Added per Worker (Constant 2005 US$) 1677 1749 1771 1817 1855 1907 1967 2025 2091 2158 2237 2305 2384 2470 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 18 Source: World Development Indicators
Distribution of VA by sectors (% of GDP) 11 11 11 11 12 13 14 14 14 14 15 15 15 17 16 16 17 33 36 39 39 39 38 37 38 38 33 36 33 38 38 35 37 36 55 53 50 50 50 50 50 49 49 49 49 49 48 48 48 48 48 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Services, etc., value added (% of GDP) Industry, value added (% of GDP) Agriculture, value added (% of GDP)
Distribution of Villages according to the Economic Activities of its residents in Alexandria 98 69 46 34 Agricltural activities industrial activities Commercial activities Craft 20 Source: Egyptian Villages Survey- 2015 (4655 Villages)- CAPMAS
Distribution of Economic Activities in Villages of Lower Egypt Craft Commercial activities industrial activities Agricltural activities 12 12 Ismailia 49 94 34 60 Beheira 17 99 64 83 Menoufia 46 99 28 96 Gharbia 41 100 48 Kafr EL 63 38 Sheikh 98 46 71 Qalubia 45 94 65 79 Sharkia 25 99 66 84 Dakahlia 35 100 80 77 Damietta 93 91 21 Source: Egyptian Villages Survey- 2015 - CAPMAS
Distribution of Economic Activities in Villages of Upper Egypt Craft Commercial activities industrial activities Agricltural activities 54 52 Luxor 17 96 41 57 Aswan 20 87 33 41 Qena 24 98 5 47 Sohag 20 97 29 44 Assiut 21 99 92 94 Menya 84 100 6 50 Fayoum 33 100 31 75 Beni Suef 33 98 46 58 Giza 34 95 22 Source: Egyptian Villages Survey- 2015 - CAPMAS
Key Messages Rural transformation matters! • Increasing Agricultural productivity is needed to • provide enough food supply to the increasing demand resulted from urbanization. Micro data, in addition to Macro data, is needed to • better understand rural transformation and its impact on households’ welfare. 23
Thank You for your Attention racha.ramadan@feps.edu.eg www.racharamadan.com 24
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