A farmer’s lifesaver? Agricultural pro-poor growth in Rwanda

A farmer’s lifesaver? Agricultural pro-poor growth in Rwanda

 

If a country solely focuses on overall rapid economic growth its inequality could increase and the poorest among the poor could be negatively affected (Kuznets, 1055; Shin, 2012). As an alternative and more balanced growth strategy, contemporary development thinking has introduced the concept of pro-poor growth. Two general definitions for pro-poor growth can be encountered in the recent literature. One is mainly concerned with inequality and requires that the distribution of growth favours the poor more than the rich (Baulch and McCullock, 2000; Kakwani and Pernia, 2000). Concerning this definition, it should be noted that contracting economies could also have “pro-poor” distributional effects; as well, in expanding economies, even if the pro-rich benefit more than the pro-poor, the later could have large absolute gains (Ravallion, 2004). Therefore, Ravallion and Chen (2003) propose a pro-poor growth definition that only focuses on the alleviation of poverty regardless of the distributional effects. This definition states that pro-poor growth occurs if and only if overall growth has positively favoured the poor.

 

Moreover, agriculture is intrinsically related to poverty, as most of the poor have it as a primary activity. Nonetheless, the impact of agriculture in development has been a subject of continuous debate (Andersson and Rohne, 2017). Concerning pro-poor growth and its relation to agriculture, researchers like Christiaensen, Demery, and Kuhl (2010) used cross-country data and found that, in comparison to non-agriculture sectors, agriculture is significantly more effective in reducing poverty among the poorest of the poor. Nevertheless, Dorosh and Thurlow (2016) found that the poverty growth elasticities for services and manufacturing in agro-processing activities are similar to, and can sometimes surpass, those of agriculture. Therefore, agricultural pro-poor growth should not only be analysed through the direct impact of the agricultural sector, but also through the sector’s linkages and multiplier effects. To provide a tangible example, this paper will analyse agricultural pro-poor growth in Rwanda between 1995 and 2019 (the period after Rwanda’s civil war). Moreover, the essay will answer the following research question:

 

Has agricultural transformation generated pro-poor growth in Rwanda?

 

Rwanda is an interesting country to study due to its rapid and unexpected recovery. During the 1994 genocide, at 219.5$ (constant 2010 USD), Rwanda’s GDP per capita became one of the lowest in Sub-Saharan Africa; however, between 1995 and 2019, the country achieved an average annual GDP growth rate of 9.2%, one of the highest in the region (World Bank, n.d.). Although, the agricultural sector’s contribution has dropped from 89.1% in 1995 to 23.5% in 2019, during the same time frame its nominal contribution increased by 357 % (World Bank, n.d.). Additionally, the employment share of the sector remains high at 62.9% (World Bank, n.d.). Considering the dimension of the sector, and the sector’s linkages and multiplier effects (Haggblade, Hazell, and Dorosh, 2007; Schneider and Gugerty, 2011), it is evident that agriculture has played a relevant role in Rwanda’s overall growth. Therefore, to analyse pro-poor growth in Rwanda, the paper will first address the impact of overall economic growth into poverty, and then it will specifically look into pro-poor growth of agricultural households.

 

If pro-poor growth is analysed from the perspective of Ravallion and Chen (2003), it can be stated that Rwanda’s growth has been pro-poor as it has been followed by a reduction in monetary and non-monetary poverty. Between 2000 and 2016, the poverty headcount ratio -at 1.90 $ a day- and the poverty gap respectively dropped from 78% to 20.9% and from 38.9% to 20.9%; furthermore, the multidimensional poverty headcount ratio dropped from 44.4% in 2010 to 28.7% in 2016 (World Bank, n.d.). Nevertheless, regarding Baulch and McCullock (2000) and Kakwani and Pernia (2000) approach, it should be noted that inequality has been persistent, with income share variations of less than 1% for the bottom 50%, middle 40%, top 10%, and top 1% groups (WID, n.d.) (See Figure 1).

 

Figure 1. Income Shares in Rwanda

Source: Author’s Elaboration with World Inequality Database (n.d.) data

 

In addition to traditional economic analysis, several tools have been developed to analyse pro-poor growth. Some of the most relevant are the Growth Incidence Curve (GIC) developed by Ravallion and Chen (2003), the Non-Income Growth Incidence Curve (NIGIC) developed by Grosse, Harttgen and Klasen (2008), and the Opportunity Curve (OC) developed by Ali and Son (2007). The GIC, NIGIC, and OC tools map growth rates of households against household percentiles, but the GIC looks at household income, the NIGIC addresses non-income dimensions of poverty such as education and health, and the OC looks at the level of access to social services.

 

Klasen and Reimers (2017), used the mentioned tools to analyse Rwandan pro-poor growth in agricultural households. Exploring different dimensions of poverty -including household expenditures, literacy, years of schooling, health problems, and access to water- they found that poor agricultural households had grown at higher rates than their counterparts (See Table 1). Moreover, as a central part of their study, they proposed to examine pro-poor growth from a productivity perspective. Thus, they estimated labour and land productivity increments in each Rwandan household and found that, when compared to their productivity-rich counterparts, productivity increased at a faster rate in productivity-poor households(Note 1). In the case of Rwanda, where over 70% of its population have subsistence farming as one of their predominant activities (NISR, 2020); continuous pro-poor productivity growth is vital to help people escape poverty as -through exceeding production- it would allow farmers to transition from self-subsistence agriculture into commercial agriculture.

 

Table 1. Rwanda pro-poor growth rates and growth rates in the mean.

Source: Adapted from Klasen and Reimers (2017)

Furthermore, another relevant aspect of pro-poor growth is the implementation of development policies. As Page (2006) states, one of the most efficient ways to achieve pro-poor growth is through policies that promote engagement of the poor and guarantee that they are actively participating and benefiting from the growth.  In this regard, AGRA (2017) emphasizes that Rwanda has carefully planned a national agenda that prioritizes agricultural transformation by targeting specific value chains and providing platforms to channel investments for smallholder farms. Similarly, ACET (2017) highlights that the Rwanda government has implemented policies that have 1) improved land’s tenure security through titling and mapping technologies, 2) enhanced land information systems 3) reformed property law and 4) promoted women farmer-to-farmer learning programs. Through these actions they have respectively increased credit availability, facilitated land access, allowed women to legally own land, and provided farming management education.

 

Financial and market access opportunities are especially relevant for Rwandan smallholder households, as only 16% of them have achieved food security and 60% are not able to produce food of enough quality and quantity (ICCO Cooperation, 2019). More capital would allow smallholders to invest in purchasing better seeds, fertilizers, technology, and consequently increase productivity and generate more income. Moreover, Carranza and Niles (2019) examined four countries in SSA and found that in low-income countries smallholder households do not only invest obtained credits in farming, but also spend them in food, health, and education. Using credits to satisfy basic needs is not necessarily an expense but could also be seen as a short-term and long-term investment. A farmer that is well fed and with good health will in turn be more productive, and a farmer that has better education will be more capable of administering his own land.

 

To conclude, agriculture remains one of the main value-added sectors in Rwanda’s economy as well as the sector that employs most of the population. Agriculture is also the main economic activity for the poor in Rwanda. Despite income shares for the bottom 50%, middle 40%, top 10%, and top 1% groups have remained almost stagnant, overall monetary and non-monetary poverty declines demonstrate that Rwanda’s economic growth has substantially benefited the poor. As well, higher growth rates of the poorest agriculture households, in comparison to average households, provide further evidence of a pro-poor agricultural transformation in Rwanda. As previously explained, this higher growth rates have not only been experienced in household income, but also in other dimensions of poverty such as education, health, and access to services.

Moreover, the reflected pro-poor growth tendency would have not been possible without institutional support for development policies. In Rwanda, the government has strategically prioritized agriculture with programs that have targeted specific value chains, provided financial access to smallholder farmers, improved land tenure security, reformed property rights for women, and provided farming management training for the disadvantaged. Even though there is still room for improvement, Rwanda’s experience is a good example of how traditional economic growth can be accompanied by effective agricultural pro-poor growth strategies.

by Cesar Gonzalo Davila Novoa

                                                   Paper Presentation at Lund University (2021)

Notes

 

1. The faster increase in labour productivity-poor households was produced in relative but not absolute terms, while the land productivity-poor households had a faster increase in both aspects.

*The paper focuses in the positive aspects of agricultural pro-poor growth in Rwanda. There is a extensive debate about how effective the implemented policies have been. The author believes that, overall, the positive aspects outweigh the negative ones. However, he recognizes that there is room for discussion.

*Essay written for the "EKHT 41 – Agricultural Transformation in the Development Process" course at Lund University

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MULASTIZO

    During the colonization of Latin America socioracial categorizations/divisions were imposed to address the origins of the newborns. Mulato was the assigned term to describe the descendants of Africans and Europeans. Mestizo was the assigned term to describe the descendants of Indigenous and Europeans. MULASTIZO is the term I have chosen to raise a voice of pride of both my African and Indigenous ancestries and to name this blog.

    It is not uncommon for a Peruvian to know where their European blood comes from. Since I was a kid, I heard my maternal grandparent proudly talking about the Novoa from Galicia, Spain. Not with the same passion, on my dad’s side, I heard some stories about the Davila that had arrived to Peru. As stated in our last name, the Davila ("De Avila" ) came "from Avila", Spain . Even though I knew I had African blood, I never heard stories about my African ancestors. At least not until now, at my 30s, when I started asking.

    I do not believe I have African ancestry on my dad’s side. Nevertheless, I certainly do in my mom’s, from both her dad and mom. I called my uncles and aunts and then I called my great aunt. I heard two stories, both of them lead to Natalia Ugaz Zeña, the grandmother of my grandmother, or my great-great grandmother. Natalia was the first Mulata in my maternal grandmother's side. Natalia is the daughter of an African and a Spaniard.

    The first story I heard was incredibly romantic. Natalia’s father was forcefully brought from Africa to work in the northern Peruvian fields and a Spaniard women fell in love with him. As a consequence, Natalia's mother cut off her family ties and escaped with her lover. The second story is more plausible. Natalia’s mother was a fully African blooded Peruvian born to African parents that were forcefully brought to work in the northern fields of Peru. Her father was a white Spaniard from whom, at the moment, we do not know much about.

    With this starting point I will continue my quest. Below a picture of Natalia Ugaz Zeña. As previously mentioned, I also have African ancestry in my maternal grandfather's side. However I have not obtained much information yet. I hope I can also trace this side of the family, and proudly share the story of my African ancestry.

 

 

Natalia Ugaz Zeña. My great-great grandmother and the first Mulata in my maternal grandmother's side.

 

Farewell picture. My grandmother, my mother, and me (Natalia’s granddaughter, great granddaughter, and great-great grandson).

The blog's purpose

    I left Peru and my family in an extremely hard situation during COVID 19. I wrote a poem to my homeland before leaving and the poem is now in my first-year thesis acknowledgements. I also wrote a letter to both of my parents in which a piece of it said:

“Sueño con viajar a África y comprender su realidad”

“I dream with traveling to Africa and understanding their reality”

    The dream is now partially becoming true. At the beginning of January, I will be traveling to Ghana and I will stay there for four months. I will research the relationship between agricultural transformation and economic development. The previous year, I have also researched different topics about different countries including Kenya, Ghana, Rwanda, Uganda, and others. The idea of creating this blog has been in my mind for some time. I would like to share with my friends and network what I have learned so far and what I will learn in Ghana. 

    As many other Peruvians, I have known I have African ascendency. Nevertheless, I never knew exactly from where. Thus, before posting my research and academic experiences, I decided to research the continent from within myself.

With pride I can say that I have confirmed some of the traces. The story can be found in the next post 😊

Rwanda's Agricultural Pro-poor Growth presentation at Lund University-Sweden