Justin Sandefur reminds us of the limits of technology to resolving the problems of development and poverty over at CGD’s blog:
Bill Gates released his annual letter to the world, opening with a discussion of how Gates-funded agricultural research can help Tanzanian farmers. . . . Gates’ letter is so optimistic about agricultural innovation lifting Tanzanian farmers out of poverty, it feels almost impolite to point out that the main source of poverty reduction for Tanzania farmers in the past two decades has been essentially the opposite: leaving the farm. . .
Gates’ core idea that agricultural innovation can help small-scale farmers in situ. But this vision is at odds with the recent historical record of poverty reduction for Tanzanian farmers . . .
- First, innovation is not very popular with Tanzanian farmers. The share of farmers using any modern farming technologies — fertilizer, irrigation, improved seed, herbicide, pesticide, mechanization, etc. – is extremely low and stagnating across the board.
- Second, income levels have been stagnant within agriculture. The same is true in the informal, non-farm sector. But the latter offers much higher income levels — implying that farmers . . . could achieve huge income gains just by leaving the farm.
- Slowly but surely, this is exactly what has happened over the past couple decades. Tanzanians are responding to market signals and moving out of agriculture — primarily into self-employment in informal micro-enterprises (see the first chart below).
Putting all these pieces together, the biggest driver of household consumption growth in Tanzania from 1991 to 2007 was not agricultural innovation, productivity growth, or anything to do with agriculture whatsoever. Over 40% of all consumption growth came from people getting out of farming (see the second chart below). .
The Gates Foundation’s work on agricultural innovation is an unmitigated good thing, and the topic is well-suited to the talents and proclivities of a private philanthropic foundation. . . .
But there is a limit to how far the lens of innovation can guide development policy. Not all social ills are susceptible to a technological fix. Science and innovation are cool and politically easy, while economic reform and political compromise are messy and tedious. But governments and donors must confront the messy issues that stand in the way of major structural transformation in economic backwaters like Tanzania. Things like enabling large-scale foreign investment in agriculture without trampling farmers’ rights, or opening borders to easier trade within East Africa.
I don’t agree with all this. There are probably good reasons why income levels have stagnated within the agricultural sector that go beyond the issues he looks at. Are roads even good enough for farmers to get goods to market? What does the logistics of reaching customers look like? Is there some problems with the institutional environment that reduces the gains to farmers (such as a lack of storage facilities or a monopoly of some nature)? But the excessive belief in technology among some in the development community is hard to understand for anyone who has spent long periods of time on the ground in the developing world.
