With the publication of the final version of its 2008 World Development Report in Washington on October 191 ,the World Bank has finally returned agriculture to the center of its development strategy. However, it continues to reduce the harmonization of international agricultural trade regulations to the complete and non-regulated liberalization of trade.
Robert Zoellick, the new World Bank President, said that "Agriculture is a vital development tool for achieving the Millennium Development Goal that calls for halving by 2015 the share of people suffering from extreme poverty and hunger."
The famous 1973 speech delivered in Nairobi by Robert S. McNamara2, who was President at the time, established fighting poverty, meeting basic needs and increasing rural productivity as priorities for the Bank. For quite some time since, however, and despite its strategic importance for improving food security and living conditions, agriculture has been left out of the World Bank's development strategies.
The latest report states that the agricultural and rural sectors have been neglected and have not received sufficient investment in the past 20 years. Indeed, the past few decades have been characterized by the implementation of "structural adjustment policies" imposed by the World Bank in return for its investments, which are directed primarily at energy and mining production, education and healthcare programs. The lack of both theoretical and practical knowledge of the agricultural sector created a real "urban bias" in the Bank's development policies.
Whereas 75 percent of the world's poor live in rural areas, only four percent of official development assistance is allocated to agriculture in developing countries. In Sub-Saharan Africa, a region in which growth relies heavily on agriculture, the sector currently accounts for only four percent of total public expenditures, while the tax burden on agriculture is relatively heavy.
The World Bank is therefore proposing a "new dynamic agriculture-for-development agenda." According to Robert Zoellick, this agenda could "benefit the estimated 900 million rural people in the developing world who live on less than one dollar a day, most of whom are engaged in agriculture." The agenda calls for allocating an infinitely greater amount of resources to agricultural policies seeking to increase the productivity of subsistence farming, as well as to market organization and diversification of production. Civil society organizations, particularly agricultural producers' associations, will need to be more involved in designing these strategies. And the Bank, whose loans to agriculture and rural development decreased in volume in the 1980s and 1990s, is committed to increasing support for these areas.
This does not mean reproducing the production model of developed countries without taking into account past errors: today, managing the relationships between agriculture, conservation of natural resources and the environment must be an integral part of agriculture-for-development in order to implement "more sustainable agricultural production systems." In order to reduce the negative effects of climate change, the Bank is also promoting the implementation of adaptation strategies as part of a concerted international effort to mobilize global financing.
Why such a change of strategy?
> Is it because the number of poor people continues to rise, particularly in Sub-Saharan Africa (300 million in more than 20 years) and Southeast Asia, and that recent studies conclude that an increase in the agriculture gross domestic product is four times more effective in reducing poverty than an increase in any other sector?
> Is it that soaring demand for food and energy (biofuels) is causing food prices to skyrocket?
> Or is it also related to other, more political factors? Indeed, the World Bank, which is in the middle of a "legitimacy crisis," wishes to once again become an authority on development issues. So it is taking a stance on an issue as strategic as agriculture, a top issue in international current events and for which think tanks and NGOs – and not the international financial institution – are sought out for expert opinions.
While the World Bank should be congratulated for this change of course, we can only lament the fact that it has not completed its "revolution." For after finally admitting that agriculture is essential in the fight against poverty – an idea that has been championed by FAO Director-General Jacques Diouf for years and has until now gone unheeded – at the same time the Bank continues to call for complete, unregulated market liberalization. Theoretically, such liberalization would lead to an increase in real commodity prices and allow developing countries to claim a larger share of international agricultural trade.
However, the reality is very often quite different from the theory. According to the World Bank’s own admissions, poverty reduction resulting from such liberalization would not be universal: there would, of course, be some winners but also, and even more so, a large number of losers. The distribution of potential gains would be unequal, depending on the products, countries and types of populations within each country.
And yet, the Bank is not contemplating regulatory mechanisms that would make it possible to overcome the weaknesses and imperfections of the market, better distribute the benefits expected from international agricultural trade and help small-scale agriculture to develop.
The only solutions being offered to these problems are palliative and non-preventive: "complementary actions and programs to compensate the losers and enable a rapid and equitable adaptation to the comparative advantages that emerge."
WOAgri is pleased to see that, following the audit of its methods and procedures in late 2006, the World Bank is continuing to move in the right direction. A new form of international cooperation remains to be created, and this, in particular, has been at the center of WOAgri’s efforts.
1 Read our article entitled "For the first time the World Bank recognizes the importance of agriculture in development," published April 30, 2007 in the "A look at the news" section.
2 McNamara was President of the World Bank from 1968 to 1981 and gave the speech before the Board of Governors in Nairobi in September 1973.
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