Social Protection Can Raise Agricultural Growth

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Social protection is now a fast-moving story (see our recent post on Brazil’s Bolsa Família). The rural poor are especially vulnerable to income-shortfalls — reflecting their shortage of assets, dependence on rain-fed agriculture, and a lack of insurance mechanisms. Farm workers with nothing but their wage (in cash and kind) are at high risk, making them often chronically poor (see the Chronic Poverty Report). By reducing risk, well-designed cash transfer programmes can encourage poor people to venture into new (and better) livelihoods. Injecting cash into the local economy also stimulates demand, much of which is spent on local goods and services. The multiplier effects then further encourage the growth of output and employment. A recent ODI briefing paper on ‘Linking Social Protection and the Productive Sectors’ from their social protection team argues that agricultural policy is in disarray in many countries and that a revitalized agriculture needs new approaches; social protection and its ability to reduce vulnerability and promote growth should be a major part of any new national policy. At the same time, some social protection programmes are better than others. The Chars Livelihoods Programme in Bangladesh gets high marks from the ODI briefing paper as does Mexico’s Oportunidades but India’s National Rural Employment Guarantee Act (NREGA) suffers from not providing enough skill enhancement (thereby diminishing its potential growth-enhancing effects) and some dishonest local practices.

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One Response to “Social Protection Can Raise Agricultural Growth”

  1. escapefromindia Says:

    I do agree on that. Some one from India should listen to this.

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