Macroeconomics, agriculture & food security : a guide to policy analysis in developing countries, 1st. ed.

• Main Author: Eugenio Díaz-Bonilla.
• Format: Book
• Language: English
• Published: International Food Policy Research Institute 2020
• Subjects: 1. Agriculture—Economic aspects— Developing countries. 2. Macroeconomics. 3. Food security—Developing countries.
• Online Access: http://dspace.uniten.edu.my/jspui/handle/123456789/15321

Why write a book on macroeconomic policies and their links to agriculture and food security in developing countries? The food price spikes of the years just prior to 2010 and the economic, political, and social dislocations they generated refocused the attention of policymakers and development practitioners on the agricultural sector and food security concerns. But even without those traumatic events, the importance of agriculture for developing countries—and for an adequate functioning of the world economy— cannot be denied. First, although declining over time, primary agriculture still represents important percentages of developing countries’ overall domestic production, exports, and employment. If agro-industrial, transportation, commercial, and other related activities are also counted, then the economic and social importance of agriculture-based sectors increases significantly. Furthermore, large numbers of the world’s poor still live in rural areas and work in agriculture. Through the links via production, trade, employment, and prices, agricultural production is also crucial for national food security. Second, it has been shown that agriculture in developing countries has important growth and employment multipliers for the rest of the economy, and agriculture seems to have larger positive effects in reducing poverty than growth in other sectors. Third, agriculture is not only important for individual developing countries, but it has global significance, considering the large presence of developing countries in world agricultural production and the increasing participation in international trade of those products (these three points will be covered in greater detail in Chapter 1). Why the focus on macroeconomics? Certainly, an adequate policy environment for agriculture in developing countries includes more than just macroeconomic policies. However, the latter provide the general framework for the sectoral policies, and appropriate macroeconomic conditions are crucial for the operation of the agricultural sector. At the same time, developments in the agricultural sector have repercussions in the whole economy, particularly in developing countries. Chapters 1 and 2 aim to place macroeconomic policies in the context of the overall policy program for agricultural production and food security. Why present a separate discussion of macroeconomic issues in developing countries? An obvious observation is that developing countries are different from industrialized countries. This fact has been invoked, since the early debates about development strategies, as an argument for the need of specific policies for those countries, both for long-term growth and for the management of shorter-term macroeconomic policies.1 The argument has been that, although in abstract, general economic principles apply to both developing and industrialized countries, the specific structural characteristics of the former where those principles operate are sufficiently different as to merit adjustments in policy design and implementation.2 Another obvious fact is that the category “developing countries” is very heterogeneous as well. The World Bank (WB), for instance, classifies those countries into low income, lower middle income, middle income, and upper middle income (nondeveloping countries are called “high income”). The International Monetary Fund (IMF) utilizes economic indicators to divide the world into Advanced Economies, Emerging Markets, and Developing Economies (the last two would be roughly similar to the traditional notion of “developing countries” used in this book). With metrics that combined economic and social aspects, the United Nations Development Programme (UNDP) classifies countries into Low, Medium, High, and Very High Human Development (with “developing countries” basically appearing in the first three groups). This book uses in general the notion of “developing countries,” which includes the category of “emerging markets,” while at the same time emphasizing the differences within that heterogeneous group.