Agriculture

Network Paper No. 122 Agricultural Research & Extension Network July 2002

RURAL DIVERSITY, AGRICULTURAL INNOVATION POLICIES AND POVERTY REDUCTION Julio A. Berdegué and Germán Escobar

Abstract

The paper explores the implications of rural livelihood diversity for agricultural innovation policies. It summarises literature on the nature of rural poverty, with particular emphasis on the relative roles of farm and non-farm income. It also reviews the various roles, direct and indirect, that agricultural innovation can play in rural poverty reduction. Finally, it uses an agricultural knowledge and information systems (AKIS) perspective to argue for a differentiated approach to targeting agricultural innovations, based on an analysis of rural assets.

Research findings • The diversification of rural employment and income is an increasingly important fact of life in the developing

world; the agricultural path out of income poverty is relevant for only a portion of the rural poor.

• Technological innovation can make direct contributions to farm household welfare, but the effects vary according

to the level of integration of agricultural markets.

• Technological innovation can also have indirect benefits for the poor through effects on food prices, employment

and backward and forward linkages with other parts of the economy.

• Recent changes in the funding of agricultural research and extension and increasing institutional complexity

necessitate the development of new approaches to prioritising and targeting agricultural innovation.

Policy implications • Policy support for agricultural innovation must differentiate among potential targets. The paper proposes a

tripartite division.

• Where assets are favourable for competitive agricultural development, particular emphasis should be given to

commercial initiatives and private sector contributions.

• Where farmers have the potential to embark on market-oriented agriculture but are constrained by...