|
AGRICULTURE AND THE BASIN
ECONOMIES
Agriculture contributes to the economies of the basin
states with cash crops accounting for at least 60 percent
of export earnings. It is expected that agriculture
is likely to maintain its strategic role in the economies
of the basin countries given its forward and backward
linkages to the non-agricultural sectors. The following
are some of the ways in which agriculture contributes
to the basin’s economies:
- Increase in foreign currency earnings through
export of agricultural products;
- Contributes towards food supply for domestic
consumption;
- Supplies local industry with raw materials, thus
reduces cost of production; and
- Promotes growth in manufacturing.
Agriculture has been a major source of capital and
revenue for non-agriculture sectors, and surpluses
are consistently transferred out of agriculture
through fiscal, crop pricing and trade policies. The
indirect growth stimulated by agricultural growth
leads to an increase in the demand for agricultural
products, in turn stimulating further expansion of
food crops and livestock production.
However, despite playing a dominant role in the
economies by addressing poverty, food security
and environmental problems, agriculture is facing
lack of development and stagnation due to limited
resource mobilization and access to credit. The
food-population imbalance requires that food supplies
grow at between four and five percent per
year, a rate most countries have been unable to
achieve. Civil conflicts and drought have exacerbated
the levels of food insecurity in some countries.
The poor macroeconomic environment, debt crisis
and deteriorating terms of trade, land ownership,
poor infrastructural development, poor ruralurban
links are taxing the sector and making it
more difficult to move faster and commercialise
smallholder agriculture.
|
