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.
International Food Policy Research Institute (IFPRI)