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Book (stand-alone)The effects of global value chain (GVC) participation on the economic growth of the agricultural and food sectors
Background paper for The State of Agricultural Commodity Markets (SOCO) 2020
2020Also available in:
No results found.Trade liberalization has long been advocated as a means to foster growth and welfare. In developing countries, the expansion of global value chain (GVC) participation of agriculture and food sectors could support transformation from a subsistence-oriented and farm-centered system to a commercialized, productive and off-farm centered one. While empirical evidence examining the linkages between GVC participation and economic performance in the agricultural sector has traditionally relied on case studies at the product level, the availability of new aggregate data on trade in value added, now provides an unprecedented opportunity to carry out a global empirical assessment of the linkages. The present paper examines new measures of GVCs participation and positioning from the EORA panel data for the period 1995–2015 (Nenci, 2020) and tests their effects on changes in agriculture value added per worker. The results show that changes in GVC participation are, on average and ceteris paribus, positively associated with changes in agriculture value added per worker, net to time-invariant confounders, whereas mixed results are found on the effects of countries’ positioning along the value chain. In the conclusive remarks, the authors argue that import tariff and non-tariff barriers – including barriers to service trade – should be seen as the first obstacle to increase GVC participation and improve domestic value-added. The presence of signs of heterogeneity by geographical location confirms that general universal recipes do not exist. -
Brochure, flyer, fact-sheetThe contribution of public investment in the agricultural sector to economic growth and rural poverty reduction
A high-level dialogue in Nicaragua based on a prospective analysis
2020Also available in:
In 2018, the government of Nicaragua requested technical assistance from FAO to carry out a prospective analysis of the Nicaraguan economy and the evolution of rural poverty, in the context of the restrictive economic conditions experienced in the country that year. Thus, the FAO Agricultural Development Economics Division (ESA) in Rome, together with the FAO Country Office in Nicaragua (FAONI) and in close coordination and support with the country’s Ministry of Finance and Public Credit (MHCP), the Central Bank of Nicaragua (BCN) and the Ministry of Agriculture (MAG), developed the study “Analysis of alternative ways of public investment and its impact on economic growth, agriculture and poverty reduction in Nicaragua.” This analysis generated quantitative evidence on the impact of agriculture on economic growth and poverty reduction. The results are clear: in all simulated scenarios, it was verified that an increase – by a value of 0.5 or 1 percent of the Gross Domestic Product (GDP) – of public investment in the agricultural sector generates economic growth, which is reflected, among other things, in GDP growth that varies between 0.8 and 3.5 percent annually through 2030 depending on the scenario. Moreover, it is observed that the difference in the total poverty rate in rural areas with respect to the base scenario would range between 0.5 and 2.25 percentage points in the same period, depending on the agricultural investment scenario. With regard to extreme poverty, the difference is projected to be between 0.16 and 0.31 points. The ongoing high-level dialogue and collaboration between FAO and Nicaragua’s economic and fiscal policy-making authorities is an excellent example, which should be replicated elsewhere, of how FAO can influence a country’s public policies. -
DocumentLinkages between CAADP and Sector Approaches in Agriculture 2011
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