Investments in agriculture boost local economic growth. 
Photo: © Ray Witlin / World Bank

Investments in agriculture boost local economic growth. Photo: © Ray Witlin / World Bank

Economic opportunities

Agriculture provides both food and development

Published: Friday, April 23, 2010

Changed: Thursday, December 22, 2011

Investment in agriculture is not only the most effective way of securing access to provisions in regions with widespread poverty; it can also contribute to general economic development for the local population – for example, through improvements to capital income and employment.

Growing populations, changing eating habits with more meat and dairy products being consumed, an increased need for bio fuel and a lack of investments in agriculture have led to rising grain prices and greater uncertainty over provisions in many countries with widespread poverty.

Estimates suggest that up to 1 billion people get too little nutritional food to enjoy a satisfactory life. In recent years, it has been shown that the most effective way of solving the problem of an uncertain food supply in rural areas is to develop local farming and forestry.

One important reason for this is that local investments in agriculture trigger the provision of food where the need is greatest. However, there are also other reasons. Investments in agriculture have proved to be an excellent way of boosting local economic growth.

It has become evident that agricultural investments increase the income of the local population to a far greater extent than investments in other sectors. And farming not only brings in capital; it can also employ a large number of people. In many areas, this is also the only realistic source of income.

For this to work, investments in agriculture must support efforts that are sustainable in the long term. Farming practices that require plentiful natural resources, reduce biodiversity, release large amounts of greenhouse gases or speed up climate changes in other ways are no longer sustainable.

In many regions around the world, it might also be necessary to adjust farming methods to climate changes in order to better withstand conditions such as droughts and extreme heat. This could include introducing better adapted seeds or developing alternative cultivation methods.

Agriculture helps alleviate poverty

Sweden and Sida contribute to promoting local, small-scale farming in several ways. A considerable amount of the work is about supplying our partner countries with knowledge and experience, as well as actively working with capacity development.

In effect, development assistance work can contribute towards securing smallholders access to natural resources in the form of land, water and forests with the help of democratic and legally secure systems. Development assistance efforts can also include enabling smallholders to receive payment for their goods, by building better roads and other infrastructure, dismantling trade barriers and enabling better access to knowledge and information about markets, laws and taxes.

Sida can also contribute to its partner countries being able to secure equal rights for women, and the opportunity for them to work the land.

A large proportion of the development co-operation work is carried out through partners in the form of interest groups, trade and industry and state authorities. An increasing share of the development assistance is supplied with the help of so-called programme support, which backs an organization’s own defined priorities and activities, and is often carried out in collaboration with other donors.

Current programmes include:

Nicaragua
In the provinces of Jinotega and Matagalpa, the Fondeagro agricultural programme will increase the incomes of small and medium-sized coffee and milk producers. Fondeagro works with the entire chain, from the individual farmer to the importer of the refined goods.

Mozambique
Sida is supporting private sector development in one of the poorest provinces, Niassa, where farming is regarded as a growth engine.

Ethiopia
Sida is supporting an integrated programme in the Amhara region. This means that the programme covers several sectors including agriculture, water, education and infrastructure, as well as registering rights of usage.

Macedonia
Sida is also contributing its support to the agricultural sector in Macedonia to make it easier for the country to fulfil the conditions required to join the EU through the reform and modernization of the agricultural sector. Sida is also supporting farmers in creating their own unions themselves so they can have an influence on laws and agricultural policy.

Moldova
In Moldova, Sida is supporting small-scale farmers with advice, credit, purchasing equipment and better seeds so they can modernize farming and animal husbandry and make these more efficient.

Facts
In 2008, Sweden and Sida contributed almost SEK 875 million to improving agriculture in several partner countries, which equates to about 6 per cent of the authority’s combined development assistance. The receiver countries include Kenya, Nicaragua, Mozambique, Ethiopia, Zambia, Tadzhikistan, Macedonia, Guatemala, Honduras and Moldova.
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