Setting Investment Priorities for Achieving Poverty Reduction and Food Security
Event Information
Ensuring access to nutritious and healthy food for everybody in the world will become increasingly challenging as resources have become more limited and competition for their use has grown. Public investment must increase to boost food production through innovations and more efficient use of natural resources. However, setting the right priorities is equally important given that returns to different types of investments vary greatly.
This presentation reviewed public investment in agriculture and its allocation during the past several decades, and presented evidence on the returns to investments in terms of agricultural growth and poverty reduction.
The results show that investments in agricultural research, rural infrastructure, and rural education have a large impact on both agricultural growth and poverty reduction in many parts of the developing world. Subsidies for fertilizer, water, and electricity may initially have a large impact, but their effects decline rapidly over time. These subsidies need to be phased out, using these investments instead to enhance productivity through innovations and improved human and physical capital. Future studies should also assess the impact of public investment in agriculture on nutrition and health and take into consideration their environmental costs.
Supporting Document
- Fan, S., ed. 2008. Public expenditures, growth, and poverty: Lessons from developing countries. Baltimore, Md., U.S.A.: Johns Hopkins University Press.
- Fan, S., L. Zhang, and X. Zhang. 2002. Growth, inequality, and poverty in rural China: The role of public investment. Research Report 125. Washington D.C.: International Food Policy Research Institute.
- Fan, S., P.B.R. Hazell, and S. Thorat. 1999. Linkages between government spending, growth, and poverty in rural India. Research Report 110. Washington D.C.: International Food Policy Research Institute.
Speakers
Shenggen Fan
International Food Policy Research Institute (IFPRI)
Shenggen Fan has been Director General of the International Food Policy Research Institute (IFPRI) since 2009. Growing up in rural China in the 1960s and 1970s, Fan became deeply committed to reducing poverty and hunger. He is convinced that innovative, country-owned, country-led approaches are required to achieve ambitious development goals. Along those lines, he recently proposed a new “business-as-unusual” approach to ending hunger: (1) invest in two core pillars—agriculture and social protection, (2) bring in new players, (3) adopt a country-led, bottom-up approach, (4) design policies using evidence and experience, and (5) measure whether commitments have been fulfilled.
Fan joined IFPRI in 1995 as a research fellow, conducting extensive research on pro-poor development strategies in Africa, Asia, and the Middle East. He led IFPRI’s program on public investment before becoming the director of the Institute’s Development Strategy and Governance Division in 2005. He also received a PhD in applied economics from the University of Minnesota and bachelor’s and master’s degrees from Nanjing Agricultural University in China. Fan is a member of the World Economic Forum’s Global Agenda Council on Food Security, as well as an Executive Committee member of the International Association of Agricultural Economists.