6. april 2021

When agriculture drives development

Lessons from the Green Revolution

Casper Worm Hansen and Asger Mose Wingender have studied the economic effects of agricultural productivity growth in the context of the Green Revolution across the developing world. They find positive but unevenly distributed effects of agricultural productivity on food crop yields, GDP per capita, schooling, and life expectancy across different countries.

Their work has now been published in the Journal of Political Economy

The Green Revolution was a crucial episode of agricultural innovation based on the application of modern crop-breeding techniques and high-yielding crop varieties. The development of the Green Revolution is associated with the construction of internationally funded agricultural research centres (IARCs) that brought new plant-breeding techniques to the problems of agriculture in low-income countries in the 1960s and 1970s. Since then, the rate of adoption and the number of new high-yielding crop varieties increased in the 1980s, 1990s, and 2000s.

Casper and Asger (and the co-author Douglas Gollin) find that agricultural productivity growth can in some circumstances provide an important stimulus to non-agricultural growth (Marden 2014). In general, however, the growth effect of increasing agricultural productivity naturally declines with the size of the agricultural sector relative to GDP. The contribution to aggregate income growth from further investments in agricultural research will therefore be smaller in the future, as agriculture shrinks as a share of the global economy. Yet agriculture still accounts for about 40% of employment in the average developing country, and the technological frontier continues to shift outward – not only for yield increases but also for environmental benefits and resilience to climate change.

The results suggest that investments in the development and diffusion of agricultural technology have substantially improved material living standards in the poorest places on our planet over the past half century. In the face of climate change and other challenges further investments in agricultural science targeting the developing world may have the potential to sustain these gains in the decades ahead.

Read also Casper’s and Asger’s column in VoxEU