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Making Investments in Poor Farmers Pay

A review of evidence and sample of options for marginal areas

This research paper is one of several prepared as background to an Oxfam International briefing paper on public investments in agriculture, written to support the agricultural campaign of Oxfam International and affiliates. The paper is motivated by the concern that despite growth in agricultural productivity over the past century, many of the developing world’s farmers continue to live in poverty, particularly in areas that are marginal in terms of either agricultural potential, access to markets, or both.

For decades, economists have debated whether or not more should be invested in agricultural research and development in marginal areas. The paper begins by summarizing this debate, concluding that it is narrow and off-center of Oxfam’s campaign. Rates of return to investments in agricultural research are good enough in marginal areas, although they may be higher in other sectors such as infrastructure, and they are lower than in more favored areas.

The economic reason for investing in agricultural research and development for marginal areas is that doing so reduces poverty, contributes to sustaining the environment, and benefits not only these farmers but the rest of the world—in a number of ways. There are also moral arguments, well-known to Oxfam.

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