Agriculture is a key component in the economic activity of developing economies, providing employment for a significant proportion of rural poor. This paper examines whether agriculture growth through public expenditure, aid or investment will significantly improve the prospects of achieving MDG 1 - halving poverty in Asia and the Pacific Region.
Approximately 70 percent of the MDGs target group lives in rural areas (IFPRI, 2006) particularly in Asia. For the rural poor, agriculture is the major source of household income. As such, the reduction of poverty, and achievement of MDG #1 by 2015, is dependent on a strong agriculture sector. Agriculture contributes to reduced poverty and hunger through agricultural led economic-growth and improved yields in agricultural production.
This paper uses simulations to examine whether public expenditure, investment and aid can contribute to agricultural-led economic growth and reduce poverty. The report finds that by increasing annual ODA between 2007-2013 by 56 percent, agricultural expenditure by 28 percent, fertilizer use by 23 percent (or agricultural investment by 24 percent), the proportion of people living at or below US$2 could be halved.