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7ER
Discussion Paper 82
Pathways of Rural Development in Madagascar: An Empirical
Investigation of the Critical Triangle of Environmental
Sustainability, Economic Growth, and Poverty Alleviation
Manfred Zeller, C6cile Lapenu, Bart Minten, Eliane Ralison,
Ddsir6 Randrianaivo, and Claude Randrianarisoa
Most of the world's poor depend directly or
indirectly on agriculture for their liveli-
hood. Much-needed increases in agricul-
tural production can, in principal, come about through
two pathways of rural development: expanding the area
under cultivation or increasing the yield of areas
already under cultivation. The first-agricultural
extensification-does not require increases in agricul-
tural productivity. The second is called agricultural
intensification. What causes rural communities to
choose between the two, and how can policy help
communities achieve environmentally sustainable
pathways of development while at the same time
improving incomes and alleviating poverty? This paper
seeks to shed some light on these complex questions
using a descriptive and econometric analysis of
community-level data from Madagascar.
The point of departure for the
analysis is a theoretical frame- "Access to
work that postulates a critical tri-
angle between economic growth, institutions,
poverty alleviation, and environ- village banks
mental sustainability. The de- cooperate
scriptive analysis of community- significa
level data from 200 villages in
rural Madagascar shows that the agricultut
yields of irrigated rice (the major Mad
food crop) and agricultural wages
declined from 1987 to 1997,
while the villages expanded their upland area at the
expense of forestlands and the fertility of their upland
soils. This paper presents an econometric anal-ysis of
the determinants of sustainable rural devel-opment that
seeks to explain three types of observed development
paths: (1) agricultural extensification with
corresponding deforestation and soil mining,
emb
such
, or
ve so
nt ro
'al in
lagas
(2) agricultural intensification, and (3) rural migration.
The results show that improved access to commodity
and financial markets and to public services as well as
a higher level of social capital in the village can act as
determinants that favor more sustainable development
paths for use of natural resources.
The analysis in this paper points to a number of
implications for policy and further research. Access to
member-based financial institutions, such as credit
groups, village banks, or savings and credit coop-
erative societies, plays a significant role in enabling
agricultural intensification in Madagascar and the
promotion of microfinance institutions for rural house-
holds could have beneficial effects on agricultural
productivity, poverty, and the conservation of natural
resources.
The research further suggests a positive effect of
improved access to
markets for rice and
er-basedfinancial agricultural inputs on rice
as credit groups, yields, upland soil fertility,
savings and credit and the reduction of newly
cities, plays a cultivated hillsides. Yet,
le in enabling improved access to output
markets for nonrice crops
tensification in that are grown on upland
car ... seems to lead to an expan-
sion of cultivated upland
in the short run. As such
market access increases, farmgate prices increase while
farmers' transaction costs for selling and buying crops
decrease, ultimately pushing up the value of land.
Investments in soil conservation will conse-quently
become more economical. Neglecting the build-up of
rural infrastructure and markets would only condemn
rural villages and households to con-tinue the low-
Food Consumption and Nutrition Division of the International Food Policy Research Institute
input, low-output, land-mining agricultural strategy.
A major incentive for migration is to seek out
villages with further possibility for expanding the
agricultural frontier. Insofar as migrants search for
better living conditions, poverty in the villages and
regions sending migrants is a driving force for natural
resource degradation elsewhere. Thus, alleviation of
poverty through improving access to public services,
such as schools and health services, enhancement of
domestic trade, and generation of off-farm income
opportunities has beneficial effects on the conserva-tion
of soils and natural resources. Our analysis sug-gests
that as land becomes scarcer, conflicts about common
property may reduce investments in soil con-servation
because of tenure insecurity. On the other hand, social
capital is found to significantly enhance soil fertility,
presumably by enabling villagers to agree on more
sustainable property rights regimes.
Finally, while the potential of generating employ-
ment and income opportunities in Madagascar's rural
nonfarm sector should not be underrated, most rural
households will probably continue to depend either
directly or indirectly on agriculture and related animal
production. Agricultural intensification in the major
food crops, i.e., rice, cassava, potatoes, and maize, is
therefore called for. The results suggest, therefore, the
need for a greater role of public policy in improving
agricultural productivity through increased invest-
ments in agricultural research and extension.
Madagascar is a country where the Green Revolution
still needs to take place.
Keywords: Madagascar, rural development,
agriculture, poverty, income
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Food
IF PoI lcy
Research
Institute
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Washington, D.C. 20006 U.SA.
"Access to mtber-based financial Instfutons, such as credit
groups vlage bank or swings and credit cooperal1v socleies,
plays a signicant role in enabling agricultural Innnslficfalon In
Madagascar.. ."-DP82
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