 We're basically coming to this sort of from the poverty background and a couple of years ago we did a report on poverty arising in Africa. That time the idea was to sort of take an overview of what has happened to poverty. We have had basically good growth in Africa up during the mid to starting mid-90s, 2000s has slowed down a bit over the past couple of years, but sort of to what extent that poverty come down. I think one key message which came from that report is that while the rates have come down there are actually quite a few more poor people today as there were before because population growth has still been strong. So you basically go from 278 million poor people, poverty rate about 54% in 1990 to the very latest numbers which just have come out or are about to come out rising to still 430 million poor people. This is extreme poverty dollar 90. So clearly there's still a big agenda on how to accelerate poverty reduction which is then basically the topic of the second report we are engaging on that is what to do. And that sort of brings us to the topic of today, here just give you a brief outline of what sort of is going to be in the report which will come out in the spring. But clearly agriculture will have to be part and parcel if not at the front of this agenda. So how to earn more on the farm is sort of what we would like to discuss. So clearly I think Will Martin and I just brought out a world development issue where we had a number of people looking at the role of agriculture in poverty reduction in development sort of revisiting the latest evidence and one of the key points which comes out there is agriculture still has that potential. Growth in agriculture is still more poverty-reducing than growth outside agriculture but there are a couple of important caveats to that. That basically power or that comparative advantage declines as countries develop. So it doesn't mean that it doesn't contribute to poverty reduction any longer but sort of it loses its edge a bit. And this is sort of what this graph by Ivanich and Martin shows. This is based on CG modeling but the results by Elizabeth Sodula and Ethan Ligand point in the same direction. Basically that as countries develop that comparative advantage comes down. But given where we are in Africa this message of agriculture is more important is still extremely relevant today. So and there's sort of five messages we would like to sort of convey looking at the agriculture sector today in Africa. So on the one hand overall the conditions are quite favorable still for agriculture to play this role in accelerating poverty reduction. So food demand is growing rapidly still largely driven by population growth but also strengthened or getting additional impetus rather from income growth and urbanization. So it estimates that agriculture and agriculture so it's not just on the farm but also the value chains further down the line being basically a one trillion dollar business potentially by 2030. Now this food demand has been growing but agriculture in Africa has not kept up with that demand and actually a lot of it is staple import growth. So the food import bill has been rising to about 30 billion dollars. Has come down a little bit lately. But so on the one hand there is demand so that's good. So that means there's going to be price incentives to produce more. But clearly the supply hasn't evolved rapidly enough to keep up with that. At the same time there's also a better more favorable policy environment more favorable price environment we could say. So basically world prices are still quite a bit higher than just before the world food price crisis into early 2000s. So about 70 percent in nominal terms about 40 percent 45 percent in real terms. So world price is still higher so still favorable price environment for for a supply response and recent evidence also shows that there is actually that farmers do respond to higher prices. So looking at the latest evidence so because one of the concerns always be near the price may be higher but is the system able to respond. So there is some price response. At the same time we also see that kind of in terms of policy so the real rate of assistance so this agricultural bias which was in the world development report 2008 we discussed as one of the reasons why agriculture haven't been performing so well that has to a large extent disappeared as well. So this real rate of assistance now these are from 1980 to 2010. But you can see basically this bias disappearing for this is of course agrit for South Africa as a whole and basically most of this early on is because of changes in the cash crop policies basically reduction of export taxation. So farmers doing cash crops can learn more but also more recently. So these are these are nominal rate of protection or basically the blue line. You see it slightly edging up. So basically there has never been much bias against food crops. So much but recently this blue line would even suggest that there's even a positive price support and this is especially in crops like rice. Now import tariffs for rice in West Africa are only 10% but in East Africa they're actually quite high to go up to 75%. So the red line so it's not so much in cash support cash crops which is the red line which may even get a little bit more bias. So basically clear demand largely driven by population growth and also income growth and organization which brings diversification also demand for other crops but still these tables are very much at the heart of it. Better price and price environment, better trade trading policies. And at the beginning I think one would say there's still a favorable policy environment in the sense that saying now that agriculture agriculture growth is good for poverty reduction is widely accepted is no longer debated that has at the beginning also let following the food price crisis has led to support so more spending on it. No much of that spending has been on private goods input subsidies and actually lately we see that start to slack off a little bit. So while this favorable policy environment, favorable vibe if you want political vibe is not necessarily always translating into support public spending on agriculture. And that may even start to slack off a little bit. Nobody kind of the food price crisis already 10 years ago. So these things start to fade away. So I think it's important to see this slightly downward trend at the end in terms of support to keep that in mind. And there are new challenges of climate change and conflict but also on climate change. Some areas actually also get more rain I think in the Sahel. So this is a question on adapting to that will need to be taken into account in technological response or technological adoption and sort of the supply response. So that's the first message kind of say look agriculture can play this role and actually the environment is more favorable now for agriculture to play that role to accelerate poverty reduction. I think the second message is that not all agriculture is equally poverty reducing and over the past five, 10 years, a lot of attention has gone to value chains but also sort of jobs outside agriculture and for the new crops dietary diversification, fruits and vegetables, meat, et cetera. And I think a key point I would like to drive home here is that there is still a huge agenda on increasing staple crop productivity. But basically May is this two ton per hectare on average cereal yields are one and a half ton per hectare just to give you a point of reference. At the time that the reforms in Vietnam start in 1986 as well as the household responsibility system in China so the liberalization of the markets yields well already a two and a half to three ton. And then the liberalization really gave the first boost in poverty reduction in Vietnam and China has come from rising staple crop yields. There's still quite a bit of hunger in Africa and just getting the staple crop productivity up remains a key challenge. And note that a lot of the imports are also on staples. Now on the on staples, the imports are basically rice and wheat. Wheat is not so much produced in Africa but rice is and there is actually a lot of rising rice import and also rice import substitution. So the governments are responding to that but basically still only half of the rising demand in rice is met by increasing domestic production. So there are no other reasons why staple, so that's sort of a direct case but there are other reasons why staple crop can be are important in raising productivity. And I would like to sort of share some very recent results by David Shirley and his colleagues but it did I thought a very interesting thought experiment. So they look at Tanzania, they the household survey data from Tanzania estimate what sort of the income elasticity of demand for several crops agriculture products are and then say, look, let's look one year ahead and sort of this is the demand to lay the land lay the land of the demand that we see emerge from that given income growth. Then this is sort of the production. This is the current productivity, current productivity numbers. So they from the household survey data, they look at the labor input per crop and then also look at labor input per crop across different total, different farm sizes. So what we have here is basically this is just the productivity. So the two tables here, this is the share of production by farm size and here you have the labor base of labor per dollar output. So lower numbers mean less labor per output so higher labor productivity. So basically what you see here is a lot of the staples are on the smaller farms. Also the vegetables, mainly these are the shares in the total production of vegetables. Oil seeds are on the slightly larger farms but you also see is low productivity in these tables rises sort of higher in between this is on the small farm, these are the total. So you see that and you also see that this raises the labor productivity rises or goes up as farmers as the farms increase. Basically as farm becomes more capital intensive on larger farm your output per labor is different. This is not yields we know about it that the larger farms at times have lower yields but this in terms of labor productivity. So he uses this data to then predict what that means for the sort of labor absorption capacity if you want of different crops. Assuming that the technology remains constant that the current import shares remains constant. There's sort of some interesting things which come out. So on the one hand the additional amount of dollars you can get per labor from vegetables is very high. But the total amount of labor days this is you get is about one third of what you get from wheat and rice in this case it's gonna be mainly rice. So basically on the one hand you have this notion that the staples together will still absorb most of the labor for rice given that it's kind of adds a lot per per labor. This also helps you increase your income in addition to absorbing labor for vegetables that's sort of the best gain but for few people. And it's sort of that trade off between the number you can get a lot it's sort of this growth and size trade off if many people gain a little bit in the total in the aggregate you could still gain a lot and get a lot of poverty reduction. If you get those who grow very fast who can gain a lot like in vegetables very profitable good activity but that only will benefit so many. And it sort of drives home this point of the continuous importance of staple crop from a labor perspective, a labor absorption perspective. So this sort of what I say here is staples offering most employment growth opportunities especially in rice because many of the others don't necessarily add so much income. Vegetables offering great income opportunities but only for a small slice. And then I think you get this, what if we start to do this on big farms? So one theory out there is why are we growing all these staples on smallholder farms? We can just do that on big farms. And basically they kind of simulate and say, look, what if we shift the production structure and what if the larger categories take up more of that demand of cater more the larger share of that demand? And basically your employment absorption kept benefits disappear overnight. And I think this is one of the conundrums we will need to deal with sort of what technology are we gonna go quickly to mechanized agriculture, mechanized farming and to what extent with the labor which isn't absorbed where does that go? And that's sort of an argument which has been made many times and that's also one of the reasons why we have been arguing and have been finding that overall growth in agriculture and this especially smallholder staple crop agriculture productivity growth I think still being very important. This sort of other evidence from IFP looking at the growth multipliers and the growth assistive poverty comparing staple crops and cash crops and sort of also finding that the growth multiplier and the poverty to growth elasticity tending to be larger for staple crops. That's sort of one key point. I think this is not to say that there's no role for vegetable exports to Europe or that there's no role for cash crops growth but I think from a public sector perspective that we need to continue to pay continuing attention to getting the staple crop productivity up. And this is for example a question the Gates Foundation keeps coming back. The Gates Foundation is one of the institutions which has been supporting staple crop productivity quite a bit and sort of I think also being constantly debated whether they should continue to do that. So that's sort of one element. Second element productivity increase or prices sort of how to foster agricultural growth with the argument that productivity increases would get the longer and more sustainable benefits and then where you invest. I'm not gonna go into these two but these are sort of three areas I think where we argue that not all agricultural growth is equally poverty reducing. So it also depends how you do it for to get the maximum poverty reduction out of it. Gonna be less talking about this but so the third message is we find that layer productivity growth has still been low and hasn't been growing so much. We find foreign sizes per capita to be declining and that decline is not offset sufficiently by growth in yields. And at the same time, we also still find the continued underutilization of farm labor. So there's still idle slack labor linked to seasonality and I will talk more about that. So I'll reserve my time here to not elaborate. The key point I would like to make here is that to get that layer productivity up that too often there's sort of single interventions single focus on the single intervention, fertilized subsidies is a good example where basically one tackles one constraint and that only gets you so far and the need for a more integrated approach while tackling different constraints there are a myriad of constraints happening. It's actually we try to tease out what if I were to decrease the risk by so much then the productivity would go up by so much but there are a number of interactions and many of these things played together and sort of just relieving one constraint only gets you so far. So that's the key argument we'd like to make here to need the need for more integrated interventions and then automatically one comes back or one place one come to is value chain development. So how do we get a more integrated approach and there are sort of different institutional solutions. One is producer organizations sort of coordinating at the bottom with actually in Africa I don't think too many success stories. We also see medium and medium farm sizes coming up Tanzania is a good example. I think this what that does for poverty reduction is a space to watch what are the spillovers in terms of, for example, if one has more mechanized farming or more medium sized farm does that increase the availability of mechanized services so that one can hire in. What does it do for poverty reduction in the area around it? Klaus also has done some work on that so maybe we can discuss more Mozambique. And then finally sort of this notion of integrated value chain sort of outgrower schemes. Now that's good but one of the challenges with value chain development is that it works reasonably well if there is enough value added and there's basically enough to pay to bind the people to bind to contract these into the contract. And that's much more difficult with staple crops. So basically the notion that if I give you fertilizer and you pay me back six months later but if this is a crop you can sell everywhere what's the likelihood that you're gonna honor my contract? So that's the site selling. Or the other way around I think in this debate sort of the breaking of the contracts, contract breach is often pulled from the farmer's side quite often it's the miller or it's the buyer who doesn't honor the contract as well. So but in staple crop production value chain development has proved to be more difficult. We are trying I think in a number of places they're trying to experiment with that where we have an experiment going on in Cote d'Ivoire in Tanzania to try value chain development in staple crop production. But in addition to that I would still argue that for getting staple crop productivity up there continues to be this need for public investment in a way that in a way in many ways there's more money there's more value added in many of the other crops which also makes that the private sector is much more interested. So there's a role for the government to play in coordination and bringing people together in interprofessional organizations, et cetera, regulations but maybe arguably much less so in terms of the need of public investment. So I think this public investment where to do put that public investment I would again argue that where we are today in Africa that there's still a lot to be said to invest in staple crop productivity. Let me stop there. Thank you. Thank you.