Rural Development Report 2016Fostering inclusive rural transformation

Stockholm, 12 December 2016

Paul Winters Officer-in-Charge, Strategy and Knowledge Department & Director, Research and Impact Assessment Division

International Fund for Agricultural Development

2

Agenda 2030 creates a dramatic challenge

Report questions

Analysis of the speed of structural and rural transformations and poverty reduction in 60 countries from 5 developing regions.

Period: 1995-2015

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What are the consequences of transformations for rural poverty reduction and inclusion?

What can the principal actors do to promote an inclusive rural transformation?

What are the different pathways of structural and rural transformation across the developing world?

1)

2)

3)

Structural Transformation• Increasing importance of industry

and service sector • Productivity gains

• Rural-urban migration• Urbanization• Demographic transition

Measured variables

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Rural Transformation • Technologically advanced, efficient

and competitive agriculture • Increasing commercialization

• Rising agro-processing• Increasing importance of nonfarm

activities in rural household income

Rural Inclusion• Extent to which different rural sectors can enjoy available rights and

opportunities (women, Indigenous People and ethnic minorities, and youth)

Proxy: change in the share of non-agricultural activity (industry and services) in GDP (%)

Proxy: change in agricultural value added per worker (%)

Proxy: changes in the rural poverty rate (%)

5

0

10

20

30

40

50

60

1980 1990 2000 2010

Services

Industry

Agriculture

Sector Share (%)

All Regions

Economic growth tends to lead to structural transformation thereby changing, but not diminishing, the role of agriculture

Decrease in agric. share increases in agric. and agro-industrial productivity

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Rural sector has become more diverse

Structural transformation in the economy is accompanied by rural transformation

Agrifood Industry Output per Capita (US$)

Share of Agriculture in GDP (%)

100

150

200

1991-95 1996-00 2001-05 2006-1010

20

25

15

Non-farm Share of Rural Household Incomes (%)

37%

47%

51%6050403020100

Africa Latin America Asia

But…

To what extent have these transformations been inclusive?

7

How have these changes affected small-scale rural farmers?

Structural transformation, rural transformation and inclusion

Rapid structural or rural transformation do not automatically lead to rapid rural poverty reduction

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Total Countries

StructuralTransformation

RuralTransformation

Rural PovertyReduction

FAST

SLOW

32 countries 19 countries

1 country 8 countries

Rural Inclusion

Fast Slow

Tran

sfor

mat

ion

Slow

Fast

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Rural development strategies for inclusive rural transformation are context-specific but structured

Amplify &

AccelerateAccelerate

AmplifyAdapt

Rural Development Objectives

Rural transformation happens as part of a broader process of structural transformation altering the role of agriculture and broadening rural investment opportunities.

Is rural development passé in an urbanizing world?

Inclusive rural transformation does not happen automatically, it must be made to happen.

Promoting inclusive rural transformation means making the right strategic decisions in each of the different contexts.

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RDR key messages

Investing in the development and wide adoption of agricultural technology and innovation to boost smallholder productivity

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Structural and rural transformation hinge on boosting the productivity of the agrifood system, including smallholders, which requires innovation

12

Rural transformation is linked to changing domestic food markets requiring actions to facilitate the inclusion of smallholders and the rural poor

Investing in better, more transparent, more efficient, and more inclusive domestic food markets

Investing in land and natural resource governance and institutions to ensure inclusiveness

13

With transformation, land and natural resource governance and institutions that shape performance must evolve and be made inclusive

Four DecadesInvesting in Rural PeopleFostering Rural Transformation

Thank you