1. Rethinking the role of agriculture: an overview Gerdien Meijerink, Derek Eaton, Swaibu Mbowa, Mary Mosugu

2. Overview: “The role of agriculture in sustainable economic development ” Need for improved understanding of processes that result in strengthened economic structures of rural areas 2006-2007 LEI, WI, PRI, Alterra Schools of thought: Emphasis on agricultural productivity increase through technology Emphasis on institutions technology Role of agriculture in development institutions

3. Overview: “Sachs Report” Review of main documents on role of agriculture in development Second half of 2006 PRI, WI, WUR institutions R&DAccess to resources and services Market access Institutional arrangements

4. Role of agriculture Land and labour productivity 1960-2003 Cereal yields (kg/ha) Multiplier effects: agricultural development  economic development Safety net Cultural significance Environmental services

5. Role of technology (R&D) Raising agricultural productivity Participation of farmers in research Reduced spill-overs North  South Input and outputs markets

6. Role of institutions Relatively recent thinking -- common conceptual framework still developing: Different levels of institutions are often confused (organisations vs. rules and norms) Terms & concepts used are abstract (institutions, transaction costs, markets, etc.)  institutional arrangements  access to resource and services  market access

7. Optimal ignorance? Surprising finding: little knowledge to guide initiatives to improve efficiency or equity of economic transactions How do markets work? How can supporting institutions be strengthened or even designed? Which organisational forms have best chance of success? Need to deepen learning process

8. Market in action

9. Reality of markets High costs in time and money: Inspecting goods Late delivery Late or no payment Risk of delegating tasks Trust as a risk reducing institution But costly (takes time and money)!

10. Conclusion (1) “Getting the institutions right” “Making markets work” Empty recommendations when there is so little known on how institutions work and especially how institutional change can be promoted Need to give practical relevance to abstract terms Need to analyse the role various elements of ‘institutions’ play in specific situations, especially as change takes place

11. Conclusions (2) In promoting agricultural development, a three- tiered approach should be followed: Continued efforts to raise agricultural productivity through technology + institutional change Focus on strengthening the interlinkages between agriculture and the rest of the economy Generate a better understanding of institutions Focus on what but especially on how

12. Thank you © Wageningen UR