1. Agricultural Growth and Poverty Reduction
in Mozambique: Technical Analysis in
Support of the CAADP Process
Karl Pauw (IFPRI)
James Thurlow (UNU-WIDER)
Rafael Uaiene (MSU)
John Mazunda (Independent)
2. Objectives of the study
Conduct CGE analysis of the economywide
implications of accelerated agricultural growth on
national/regional growth, poverty reduction, and
caloric availability
Help policymakers understand
− the nature of economic linkages between agriculture and
other sectors;
− the socio-economic importance of the agricultural sector;
− implications of regionally-focused policies under PEDSA;
− how to better integrate agricultural development policies
into the broader development strategy for Mozambique
3. Introduction and context
Very rapid GDP growth during 2003-2008 (8%),
with strong growth across all sectors.
Agriculture also performed strongly (7%)... at
least according to national accounts
What about poverty?
Survey Nat- Location Region
year ional Urban Rural North Center South
2002/03 54.1 51.5 55.3 55.3 45.5 66.5
2008/09 54.6 49.5 56.8 46.3 59.7 56.8
4. Explaining the growth-poverty disconnect
(Arndt et al. 2011)
1. Food and fuel price shocks:
− Prices peaked in 2008 when survey data was collected
− High import intensity = vulnerable to shocks
2. Drought in 2008 affected central region in
particular:
− 16-17% yield shock for key staples
3. National accounts agricultural statistics
doubted
− Early Warning System estimates used until 2009
− TIA used since 2010; considered more reliable but
paints a much gloomier picture for 2002–2008
5. Model scenarios
CGE model (base year 2007) used to compare two
alternative growth paths during 2009–2019 (PEDSA
implementation period)
“Baseline scenario”
− Assume Mozambique continues along the same growth
trajectory
− Need to understand what exactly happened
“CAADP scenario”
− Broad-based agricultural growth across all subsectors
− PEDSA targets high-potential areas in center and north
− Growth target of 7 percent achieved
6. Lessons from “yield analysis”
Stagnant crop yields; land expansion just matched
population growth; decline in per capita staple crop
production.
Regional differences:
− North: high potential, but sharp decline in yields; very rapid land
expansion
− Centre: relatively strong yield growth despite drought impact; land
expansion rate exceeds population growth
− South: some crops (e.g., cereals) performed adequately, but
average yields remain very low and land expansion slow
Institutional factors: 2000s more about restructuring
institutions and developing agricultural policies, and not so
much about developing agriculture
8. National GDP at factor cost
GDP Growth 2009-2019
shares
(%) Base CAADP
Total GDP 100.0 5.7 6.8
Agriculture 26.7 3.4 7.0
Cereals 7.5 3.8 8.5
Root crops 5.3 3.8 6.0
Pulses 3.2 3.3 7.9
Horticulture 2.6 2.0 4.3
Export crops 1.2 3.7 5.3
Livestock 1.9 3.1 6.9
Industry 26.1 5.3 5.3
Services 47.2 7.1 7.5
9. Regional agricultural GDP at factor cost
Agric. Growth 2009-2019
GDP
shares
(%) Base CAADP
Agricultural GDP* 100.0 3.5 7.1
Northern region 25.9 1.0 7.6
Central region 57.6 4.6 7.6
Southern region 16.5 2.8 4.2
* Crops and livestock only; excludes forestry and fisheries
11. Poverty and calorie deficiency rates
2009 2014 2019
Base 51.0 46.8
Poverty 54.6
CAADP 45.2 36.1
Calorie Base 45.5 40.2
49.5
deficiency CAADP 41.0 32.6
12. Conclusions
Neglecting the agricultural sector has proven to be
damaging to poverty reduction efforts and food security
An agricultural revival is needed if Mozambique is to
achieve agricultural growth and poverty reduction goals
Yield targets for achieving 7% growth are reasonable
and within reach
Prioritization is important as crops differ in terms of
their effectiveness in contributing to growth, poverty
reduction, or nutrition
Policies that target only “breadbasket” regions may lead
to unequal outcomes
13. Final remarks:
Agriculture and the broader development strategy
Does agriculture run the risk of Dutch disease
(the “resource curse”)?
What are the potential spillover effects for
agriculture from investments in “development
corridors”
Development corridors: east-west versus north-
south?
− CGE results: even under CAADP scenario we still see
significant gains for households in the south is the
“common national market assumption” valid?