Is agric quickest way out of poverty?

Least developed, low developed or developing countries, which is which? The choice of diction here is the privilege of the report authors, the subjects usually have no pick; the same can possibly be said of the United Nations 2015 “Least Developed Countries” (LDCs) report launched at a quiet event in Kigali last week. Authored by the UN Conference on Trade and Development (UNCTAD), the report tracks the so-called ‘least developed countries’ and its updated list has 48 countries; in the wider eastern Africa region, all but Kenya, made the list, a not quite prestigious list. These include Tanzania, Uganda, DR Congo, South Sudan, Burundi and Rwanda. The Minister for Finance and Economic Planning, Claver Gatete, said it is more accurate to say Rwanda is a developing rather than least developed country – not just for political correctness. In a way, it could be almost inaccurate to say a country is ‘least developed’ as it could loosely mean its development process has come to an end and compared to all others, it’s the least developed. Yet, as a matter of fact, some of the countries on UNCTAD’s least developed list have also been cited by other reports as being among the fastest growing and developing economies around the world, Rwanda is one of them. The Human Development Index (HDI), a publication of yet another UN agency, released this week, found that Rwanda has the fastest rate of development compared to 140 other countries. Quality of life of a country’s citizens is, perhaps, one of the best indicators of a developed or developing nation and, according to the UNDP’s latest yardstick, Rwandans can now live 32 years longer than in 1990, and spend twice as long in school. China, the world’s second largest economy, comes in second behind Rwanda. Therein lies the paradox. Rural transformation But its disputable diction aside, the UNCTAD report, launched in collaboration with the United Nations Economic Commission for Africa (UNECA) Sub-regional Office for Eastern Africa), contained useful content on ‘transforming rural economies’. The report notes that LDCs have a huge number of their people living in rural areas and are the most affected by poverty; in its recommendations, the authors called on policy makers in these countries to focus on policies geared towards rural transformation. “Achieving the Sustainable Development Goals by 20130 will be particularly demanding in rural areas of LDCs, where shortfalls in human development are much greater than in urban areas,” said the report. The proportion of people below the national poverty line in rural areas is around double that in urban areas and the average income shortfall relative to the poverty line is around 20 per cent greater, noted the report. “Eradicating poverty will, thus, require much greater increases in incomes in rural than in urban areas,” it said. The population of working adults in rural areas is projected to grow by large proportions in years to come and the report suggests that policymakers must focus on increasing economic opportunities with incomes above the poverty line to fight poverty in these areas. Agriculture, poverty & change During an interview with UNECA economist Andrew Mold, he made a case for agriculture as the single most important sector with higher potential, if modernised and made more commercially oriented, to help countries respond to what the report says. “For Rwanda to sustain its current strong economic growth and poverty reduction, you need a robust agricultural sector and I am glad to note that at 5 percent growth against a government target of 8 percent, the sector is doing fairly well,” Mold said. Under the second Economic Development and Poverty Reduction Strategy (EDPRSII), the government groups its priorities in four thematic areas, including economic transformation, rural development, productivity and youth employment, as well as good governance. In the current National Budget, the four thematic areas were allocated 52 per cent of the total resource envelop, emphasising the government’s determination. By placing economic transformation at the fore of its development pillars, Rwanda’s policymakers are aiming at ultimately achieving a change in the country’s dominant economic activity toward newer and more productive sectors that can boost job creation. Economist Mold said this transformation is already evident in Rwanda, where the agriculture contribution to GDP has gradually dropped from 45 per cent in 2000 to slightly over 30 per cent today and the population employed in the sector has fallen to below 80 per cent, according to the Fourth Integrated Household Living Conditions. This shift, Mold noted, is in a response to government policy, a good sign. However, he said, the shift to other sectors such as services, which now contributes more to GDP, is an opportunity to invest more in commercial agriculture to boost productivity and incomes of rural populations. “As government creates more off-farm jobs in other sectors, this creates space for more commercially oriented agriculture production,” Mold said, adding that Rwanda’s dropping birthrates in recent years should also be sustained to serve this purpose. Farming cooperatives The Minister of State for Agriculture, Tony Nsanganira, said Rwanda’s agriculture sector is already moving in the direction being prescribed by experts; that is, creating space for more commercial practice and boosting productivity through fertiliser use and other extension services. Rwanda currently has around 1.5 million hectares of arable land, most of which, the minister said, is either in use for commercial or subsistence farming. “We particularly put most of the consolidated land under commercial category and it is around 700, 000 hectares,” Nsanganira said. There are currently about 7,000 registered cooperative farmer groups engaged in commercial farming activities around the country although there are other farmer groups, not registered as cooperatives, added the minister. With 7,000 commercial farming groups, it means each group has about 100 hectares available for their activities; but what is their productivity? The agricultural ministry is currently in the process of developing a comprehensive agricultural land information system which will have more accurate data on land use and agricultural productivity, expected to be launched by April 2016, according to Nsanganira. At the moment, available data on production is measured based on specific crop productivity; for instance, maize productivity is estimated at an average of four metric tonnes per hectare and in season A of 2015, overall production of the crop across the country was one million metric tonnes. editorial@newtimes.co.rw

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Is agric quickest way out of poverty?