Agricultural Policies for Poverty Reduction by OECD Publishing

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Indeed, amongst the poor, there are both net buyers and net sellers of food, and many (perhaps the majority of) farm households may in fact be net buyers. On the other hand price stabilisation has been proposed as way of containing the impact of adverse shocks on producers and consumers. The difficulties of designing price stabilisation programmes are well known. Formal (ex ante) price stabilisation induces moral hazard, with agents failing to mitigate risk, and price stabilisation can easily turn into systemic price support or suppression, depending on political pressures.

Indirectly, the benefits of smallholder growth are also likely to be propoor, because of potentially strong linkage effects to the rest of the economy. , 2001; de Janvry and Sadoulet, 2009). 8 Moreover, in the long-term manufactures and services are capable of generating annual growth rates of 10% or more, whereas growth rates in agriculture seldom exceed 5%. How then should governments strike the balance between boosting incomes in the context of existing structures, where there is more immediate scope for poverty reduction, and facilitating the transition to a more diversified economy which has the potential to generate much higher average incomes?

AGRICULTURAL POLICIES FOR POVERTY REDUCTION g OECD 2012 43 1. 4. A strategic framework for strengthening rural incomes and facilitating smallholder adjustment In proposing a strategic framework for strengthening rural incomes it is helpful to make a distinction between the short to medium term issue of how best to support incomes, reduce poverty and tackle food insecurity (beyond immediate questions of humanitarian relief), and deeper long-term questions regarding how best to consolidate those gains via broader economic development.

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