Globalization, in the sense of rapid transmission of the impact of technology to all areas of the globe with highly developed infrastructure, will continue to accelerate. Low-income countries that do not spend heavily on research and technology dissemination and do not upgrade their rural infrastructure and reduce transaction costs will experience continually declining prices for agricultural commodities, but without offsetting decreases in costs of production.

In contrast, where costs are reduced by research and improved infrastructure, agriculture can attain growth rates of at least 50 percent higher than in the past. That would have powerful multipliers to the rural non-farm sector, thereby reducing poverty, increasing employment, and increasing food security.

High-income countries can assist this process though continuing to open trade in agricultural commodities; preventing domestic farm support programmes from dumping commodities on world markets; and, in the case of cereals, massively increasing demand through financing rural public works programmes to reduce transaction costs in rural areas and bring them more fully into the global market. Low-income countries, especially in Africa, must redirect public expenditure to agricultural production, especially research and rural infrastructure. They should reduce constraints to trade, including over valued exchange rates, and consider cutting customs barriers.

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3 years ago