Agricultural Productivity and Poverty Alleviation: What Role for Technological Innovation

Abstract

The role of agriculture in economic development remains much debated. This paper takes an empirical perspective and focuses on the relationships between agriculture productivity and poverty reduction. The contribution of agriculture sector to poverty is shown to depend on its own growth performance, its indirect impact on growth in other sectors, the extent to which poor people participate in the sector, and the size of the sector in the overall economy. Bringing together these different effects and taking into consideration the role played by technological innovation, we use an aggregate annual panel data, on a sample composed of 32Sub-SaharanAfrica (SSA) countries, from 1990-2011 to estimate a simultaneous equation model that capture the interrelationship between agriculture productivity, technological innovation and poverty. Findings show first that agricultural productivity contributes significantly to economic growth and poverty in SSA. Second, technological innovation appears to have a positive and significant impact on poverty through its direct and indirect impact through agriculture productivity and growth.