The state of food and agriculture: social protection and agriculture – breaking the cycle of rural poverty

FAO
2015

Summary

Agriculture and social protection are fundamentally linked in the context of rural livelihoods. Social protection programmes contribute to higher household incomes and increased consumption, enhancing households’ ability to produce food.  This report shows that even relatively small transfers help the poor overcome liquidity and credit constraints, and provide insurance against risks that would otherwise deter them from higher-return activities. It emphasises the effectiveness of building synergies between social protection and agriculture programmes for sustainable poverty reduction and furthering rural development. A national vision – underpinned by policies, planning and programmes, and domestic resource mobilisation – is an essential enabling factor to achieving this.

The share of people living in poverty and extreme poverty have declined over the past three decades, but the numbers remain high, with almost one billion people still considered ‘extremely poor’ and another billion ‘poor’.  Social protection can improve poor households’ investment decisions by helping them manage risk; it increases the predictability of income and financial security and prevents households from falling into deeper poverty when exposed to shocks. It also allows for investment in productive activities and assets and broadening employment opportunities.

Most countries, even the poorest, can afford social protection programmes that could significantly support the elimination of poverty. Spending on such programmes has been low relative to GDP. Donor support is key in the short-to-medium term, but mobilising domestic resources from the outset is necessary. Targeting, the means of transfer, the nature of the local economy, household-level factors and gender all influence programme impacts and should be considered in the design stage.

Stronger coherence between agriculture and social protection interventions can lead to more sustainable livelihoods. Coordinated interventions can support small – scale agriculturalists to manage risk more effectively and improve agricultural productivity. However, there have been relatively few interventions of this kind. Examples of how to do this include: credit to agriculture, institutional procurement programmes and input subsidies.  Effective targeting is also an important determinant of success. For example, single or unified registries have proven effective when several programmes have overlapping objectives and target populations.

The report highlights a number of other key messages including:

  • Gender-sensitive programmes reduce women’s time constraints and strengthen their control over income. This has positive impacts on maternal and child malnutrition, potentially breaking inter-generational poverty.
  •  Social protection:
    • stimulates investments. Regular and predictable transfers can promote savings and investment in farm and non-farm activities, and catalyse engagement in more risk-taking activities with higher returns.
    • strengthens livelihoods by providing beneficiaries greater choices in work. Many shift from casual agricultural wage employment of ‘last resort’ to own-farm work or non-agricultural employment. Evidence shows social protection does not reduce work or foster dependency.
    • has positive impact on local communities and the economy. Public works programmes can provide infrastructure and community assets, through cash transfers, beneficiary households increase local purchases of goods and services, having positive spill-over effects on non-beneficiaries and the wider community.

Source

FAO. (2015). The state of food and agriculture: social protection and agriculture – breaking the cycle of rural poverty. Rome, Italy: FAO.