Poverty and the globalization of the food and agriculture system

Supporters of globalization argue that the process offers opportunities for poor people in developing countries to improve their livelihoods and grow out of poverty, whereas skeptics claim that globalization poses new risks to the well-being of poor people. The globalization of the food and agriculture system is at the center of this debate, because so many of the poor depend on agriculture as an income source and because the poor spend a large share of their resources on food. Assessments of the relationship between globalization and poverty vary dramatically, ranging from catastrophic to rosy, owing to the different scales at which assessments were made, different temporal perspectives, and different views on how well markets and other institutions (like democracy, transparency, and participation) function for poor people.

In fact, however, as globalization occurs, poverty may or may not decline, and the two phenomena may or may not be linked. After all, many other changes have occurred simultaneously with globalization, such as improved governance in some countries, the start of new conflicts and wars and the end of old ones, the broadening of civil societies’ reach and level of organization, improved infrastructure, and the transformation of domestic retail markets, and these changes may
also affect poverty.

The Globalization of the Agrifood System:

The globalization of the agrifood system can be broadly defined as the integration of the production and processing of agriculture and food
items across national borders, through markets, standardizations, regulations, and technologies. The globalization of the agrifood system increases when

  • internationally traded foods increase as a proportion of production;
  • traded agricultural inputs and transborder investments expand across countries;
  • the science, knowledge, and information contents of the agrifood system cross borders;
  • standardization and related regulatory institutions—corporate organizations such as multinational companies or public organizations such as the World Trade Organization (WTO)—increasingly reach across borders;
  • consumers’ tastes, and the firms and structures attending to them, show growing similarities across countries and regions; and
  • the health and environmental externalities of agrifood systems have transnational or global impacts.

Given the diversity of the processes involved, the globalization of the agrifood system is not easily quantifiable and cannot be aggregated into
one index number. Moreover, these processes do not always occur concurrently or even lead in the same direction, making them even more difficult to quantify.

Poverty Trends during Globalization:

In discussing the effects of globalization on poverty and food security, it is important to keep sight of the reality of poverty that lies behind the statistics—it is a problem that affects people of different ages, genders, and ethnic origins, in different regions, and in city slums and rural areas. Furthermore, poverty is not a static phenomenon. Populations affected by poverty are in a state of flux in many countries. One portion of the population may free itself from poverty, while others are newly affected or threatened by it.

Nevertheless, a first step in understanding the effects of globalization on the poor is to look at the trends for poverty since the 1980s, the period
during which globalization has accelerated. A mixed picture emerges when different sources of data and concepts are used. Indeed, in the
aggregate for all developing countries, the number of people living on less than US$2 a day from 1981 to 2002 actually increased by about 164 million people. The number of people living on less than US$1 a day, however, has fallen by approximately 467 million people. These
aggregate numbers also mask large regional and cross-country disparities; although the number of poor people in East Asia and the Pacific and in South Asia has declined substantially, it has increased in Sub-Saharan Africa and in Europe and Central Asia. Furthermore, China has seen large decreases in the number of poor.

Author: 
von Braun, Joachim
Mengistu, Tewodaj
Published date: 
2007
Publisher: 
International Food Policy Research Institute (IFPRI)
Series number: 
Special Edition
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