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Governments must refocus their energies on rural communities. Deploying broadband technologies is a cost-effective way to reduce the digital divide and inequality
Maximo Torero Cullen is the Chief Economist of the Food and Agriculture Organization (FAO)
In a zeal to repair the pandemic's economic and social damage, governments have made dramatic spending pledges. And yet, a crucial segment of the population who have struggled the most during the pandemic are being left out.
Eighty percent of the world’s poorest people, or 600 million people, live in rural areas, work in agriculture and, ironically, go to bed hungry. They have fewer opportunities for education and jobs than their urban counterparts. They also lack access to markets, healthcare and financial services.
Worse, farmers across the globe are struggling with poor harvest, expensive seeds and fertilizers, and low market prices for their produce. The distress in rural areas, compounded by the impact of COVID and climate change, is astonishing. In India, where 60 percent of the population works in agriculture, at least 10,280 farmers committed suicide in 2019 — and that was before COVID.
International institutions are calling for a “fair and green” recovery. So it’s alarming when the International Monetary Fund, whose financing is crucial for developing nations’ economies, warns of the danger of poorer nations being left behind in post-pandemic recovery, yet neglects to mention the role of rural development and agriculture in it.
The pandemic has unearthed systemic inequality in societies, leaving many women, young people and informal workers scrambling for survival. A generation of hard work that lifted 400 million people out of poverty is gone due to the coronavirus pandemic. As many as 132 million people joined the ranks of the hungry in 2020.
Governments must refocus their energies more on rural areas. In rural areas, agriculture is the best weapon against poverty, undernourishment and unwanted migration.
The decline of agriculture happened over decades. Countries’ growth strategies and cuts in public services systematically undermined the sector until agricultural growth stalled. Funding for agricultural research increasingly came from the private sector, making researchers shift away from smallholder farmers and leaving a data gap.
All this happened despite the fact that agriculture has always been the main livelihood of poor people. Three quarters of the labor force in poor countries are employed in agriculture. Agriculture is twice as effective in reducing poverty than other sectors are. When agriculture was at the top of the agenda, poverty decreased rapidly. For example, Indonesia cut extreme poverty from 50 to 14 percent between 1981 and 1995 by investing in agriculture. The sector remains the country's engine of growth.
Countries must rethink agriculture, as traditional farming activities can be transformed into a competitive industry. Nigeria took a big economic hit when the price of oil collapsed during the pandemic. Investing in the quality of its cocoa beans to supply international chocolate markets would create a stable source of income.
According to the IMF, low-income countries will need some $200 billion over five years just to fight the pandemic. They will then need another $250 billion to catch up with the rest of the world. To put these figures into perspective, the Fed’s 2008 rescue package was almost $500 billion.
But cutting poverty and hunger doesn’t have to be prohibitively expensive. Industrialized countries already spend $12 billion annually to do this. In a recent modelling study, my colleagues and I found that if they double their investment for 10 years and if poorer countries keep up with their investment to promote a series of low-cost interventions, it could help 500 million people escape from hunger. The deployment of broadband technologies in rural areas is an example of cost-effective investment with tremendous returns, reducing digital divide and inequality. Governments can cover the initial cost and private companies can expand access.
Of course, the answer is not to hand out harmful agricultural subsidies driven by politics. Governments give $540 billion to farmers every year; more than half of it end up distorting markets and harming the environment. Those subsidies should be repurposed toward agricultural R&D, biosecurity and infrastructure programs, which would create on- and off-farm employment and diversify sources of income for rural populations.
Crippling rural poverty could leave large swaths of the post-pandemic world unvaccinated and unemployed — a recipe for future economic downturns.
For a fair and green recovery, we cannot give farmers the shaft.
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