IFPRI INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE Prioritizing agricultural subsector growth and investments at the country level: Methodology to assess economy-wide impacts James Thurlow and Paul Dorosh International Food Policy Research Institute USAID/World Bank Workshop on “Agricultural investment priorities and financing gaps for achieving growth and poverty reduction targets: Review of evidence and methodology” January 7, 2010
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Prioritizing agricultural subsector growth and investments at the country level: Methodology to assess economy-wide impacts
"Prioritizing agricultural subsector growth and investments at the country level: Methodology to assess economy-wide impacts", presentation by James Thurlow and Paul Dorosh at the USAID, IFPRI Financial Gap Analysis Workshop held at the World Bank, January 7, 2010.
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IFPRI
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Prioritizing agricultural subsector growth and
investments at the country level:
Methodology to assess economy-wide impacts
James Thurlow and Paul Dorosh
International Food Policy Research Institute
USAID/World Bank Workshop on
“Agricultural investment priorities and financing gaps for achieving growth and
poverty reduction targets: Review of evidence and methodology”
January 7, 2010
IFPRI
Broad Strategic Questions
Is a 6% agricultural growth rate enough to reach national poverty targets? If not what is the required agricultural growth rate?
How can different agricultural sectors contribute to accelerating growth?
How do outcomes vary across sub-national regions?
How will different types of farmers be affected, and what is the impact on rural employment and the non-farm economy?
What are the potential product market constraints caused by expanding agricultural productivity?
IFPRI
Overview
1. Economywide growth and poverty analysis Overview and key features of the methodology
2. Modeling future growth scenarios Results from the Uganda case study
3. Prioritizing sectors for investment Criteria for ranking crops and sub-sectors
Results from selected country studies
IFPRI
IFPRI Estimates of Impacts of Agricultural Investments:
Two Analytical Approaches
1. Costing of MDG and Development Objectives using a reduced
form approach (“spreadsheet” calculations of growth and poverty
reduction effects)
» Fan, Johnson, Saurkar and Makobe (2009), “Investing in African
Agriculture to Halve Poverty by 2015”, ReSAKSS Working Paper
No. 25 (February).
» Costing studies for Ghana and Uganda
2. Individual country studies for CAADP using economy-wide
models
» Ghana, Kenya, Nigeria, Rwanda, Uganda, Zambia
» Ethiopia, Mozambique, Tanzania (CGE analysis not including
investment costs)
IFPRI
Approach 2: Impacts of Agricultural Investments
using Economy-Wide Models (CAADP analysis)
Individual country studies for CAADP using
economy-wide models
» Output-investment elasticities for individual agricultural
sub-sectors (derived from econometric analysis)
» CGE model simulations of the agricultural productivity
shocks showing
Changes in real prices
Sectoral and total GDP growth
Household income and consumption
Poverty rates
IFPRI
1. Growth and poverty analysisEconomywide (“CGE”) modeling framework
Factor markets
Commodity markets
Foreign markets/
countries
Public sector/
government
Human/physical capital
Productivity/technology
Urban/Rural
Farm/
Nonfarm
Agriculture
Industry
Services
Economic production Incomes and poverty
Production Consumption
Wages, rents,
profits
Foreign trade
Foreign aid
TaxesSpending
and market
policies
Foreign
investment
Taxes and
social policies
Public investment
and macro
policiesPrivate
investment
IFPRI
1. Growth and poverty analysis: Agriculture-nonagriculture linkages
Models include detailed agricultural and nonagricultural sectors
Capture upstream and downstream linkages (e.g., maize cultivation and
grain milling)
Considers all different income sources (e.g., off-farm, remittances)
Captures labor mobility and rural-urban migration
Includes the government (e.g., public spending, transfers, taxes)