22 pages, Raising agricultural productivity in developing countries is often said to reduce poverty more than comparable growth arising from other sectors. This claim has frequently been based on casual theorising, rather than empirical evidence. Productivity growth generates additional income and must benefit someone, though not necessarily the poor. It is conceivable that most, or even all of the benefits might go to others. Using region-level data from Thailand, we study the relationship between agricultural productivity growth and rural poverty incidence. The dependent variable for our regression analysis is the annual rate of change in rural poverty incidence at the regional level between the years for which poverty data are available. Agricultural productivity is measured as the annual rate of change in regional total agricultural productivity, covering the same time intervals as the poverty observations, but lagged one calendar year. Other control variables include regional non-agricultural incomes and the real price of food. The estimated coefficient on the change in agricultural productivity is negative and highly significant, implying that agricultural productivity growth does reduce rural poverty, holding other variables constant, though not more so than non-agricultural sources of income growth. The poverty-reducing contribution of recent agricultural productivity growth has been small. The poverty-reducing effects of long-term drivers of agricultural productivity growth are also analysed, using simulations based on the estimated model.
This study presents an efficient version of test for the hypothesis that education plays a key role in influencing agricultural productivity based on a switching regression model. In the present setting, farmers’ ability to deal with disequilibria is allowed to change with education, which thereby provides a concrete evidence of the effect of education on selected East Asian production agriculture. The results suggest that there exists a threshold for education to be influential to agricultural productivity change when the selected East-Asian economies are categoried by their degree of economic development. Moreover, for the group of economies where education constitutes a major determinant of productivity growth in both the technological progression and/or stagnation/recession regimes, the effect of education is found to vary from economy to economy and from regime to regime. Generally speaking, however, those East-Asian economies tend to reach their turning point in short time despite of the mentioned differences. This result therefore leads to important policy implications concerning giving an impetus to human capital investment in the agriculture sector.