Structural Change of Rural Economies

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• Structural Change of Rural Economies
• and Globalization

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Main hypotheses
Rural households do adapt through diversified
activity and income strategies which are
reshaping rural economies
Global agro-food markets restructuring
reinforcerural economies differentiation
Marginalization trends resulting from these
processes of structural change could lead to
risks of transitional dead-ends
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General Design

• Not an assessment / forecast / foresight only
  an update!!
• A 3-year comparative program implemented in 7
  countries
• Mexico
• Kenya, Madagascar, Mali, Senegal
• Morocco, Nicaragua
• Two main phases
• Phase 1 general country overviews
• Phase 2 Regional case studies value chains
  reviews rural household surveys
• 26 regions, near 9,000 surveyed HH
• A focus on rural incomes
• National teams Institutional Operational
  partners
• Contribution to the local policy debate

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Agriculture for Development
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The WDR08 and the three worlds of agriculture
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The Evolutionary Path
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The policy diamond and the 3 exit pathways
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Exple Agriculture-based Countries
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What do these 3 exit pathways mean?

• Between the Ag. Specialization, rural
  diversification, and migration options what are
  the realistic / acceptable / viable /sustainable
  ones? What are the right shares?
• 10/20/70 or 40/40/20?
• gt What is the room for maneuver of the policy
  makers?

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What do we learn from the past?

• The structural transformation of Western Europe
  and its offshots is embedded in Western
  imperialism Bairoch, Braudel, Pomeranz, Chang,
  etc.
• The capture of America and domination of Western
  Europe during 5 centuries helped its structural
  transformation specialization and migrations
• The transformation of the so-called emerging
  countries occurred during the nation state led
  period between the 2 WW gt the 2nd
  globalization

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Where are the Ag. Based countries, what do they
face, what can they do?

• The Ag. based countries mainly SSA face huge
  challenges
• An incipient economic transition

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Structural Change East Asia vs SSA
Manufacturing GDP
Agriculture GDP
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Where are the Ag. Based countries, what do they
face, what can they do?

• The Ag. based countries mainly SSA face huge
  challenges
• An incipient economic transition
• An incomplete demographic transition

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Yearly Cohorts
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Where are the Ag. Based countries, what do they
face?

• The Ag. based countries mainly SSA face huge
  challenges
• An incipient economic transition
• An incomplete demographic transition
• The constraints of climate change
• In the context of globalization
• High international competition
• One size political framework
• These challenges are insufficiently considered
• gtit represents a historically unique
  configuration

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What can they do?

• Back to the 3 exit pathways
• And back to rural realities of the Ag.based
  countries
• Here some RuralStruc results can help
• The overall conclusions
• Huge heterogeneity
• But sobering results

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Annual Income per Capita in the Surveyed Regions
(PPP 2007)
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PPP 1 Income Classes
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Quintiles of Households by Region (PPP 2007)
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Structure of Households Global Income
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What does it mean?

• If we want to eradicate hunger
• We to need to deal with the many family
  farms /smallholders because exits are limited
• The are no market solutions only
• Under 2 a day no investment capacity
• Need of public support public goods - of course
  - but not only

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What does it mean?

• A need to focus first on food crops
• Food insecurity remains and rural households are
  risk adverse
• Food crops are the most inclusive
• Then upgrade the added value ag.
  diversification transformation
• And keep in mind that rural diversification
  starts with the growing rural demand
• gt Ag. Income remains a key