Did rapid smallholder-led agricultural growth fail to reduce rural poverty?

Type Working Paper - UNU-WIDER
Title Did rapid smallholder-led agricultural growth fail to reduce rural poverty?
Author(s)
Publication (Day/Month/Year) 2014
URL http://www.wider.unu.edu/publications/working-papers/2014/en_GB/wp2014-123/_files/92575849872949891/​default/wp2014-123.pdf
Abstract
Disappointment was widespread when rapid economic growth since 2005, coupled with a smallholder-targeted fertilizer subsidy program, failed to significantly reduce poverty in Malawi. Official estimates for 2011 showed a 1.7 percentage point decline in national poverty between 2005 and 2011, while rural poverty increased marginally. In this study we estimate an alternative set of regional poverty lines using a cost of basic needs method that allows the consumption bundle to vary spatially and temporally while ensuring utility consistency. Our poverty figures suggest a substantial 7.3 percentage point decrease in national poverty over the analysis period, driven largely by a sharp reduction in rural poverty. These results are more consistent with the observed level of economic growth and improvements in several non-monetary dimensions of well-being. However, we find that extreme poverty did increase, suggesting that the most vulnerable people continue to be excluded from the benefits of economic policy and growth.

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