Contract farming is a pervasive institutional arrangement in cash cropping economies in Mozambique. Empirical evidence on its nature and, especially, the extent to which policies can generate broad based income growth and poverty reduction is lacking. This study investigates the rationale for persistence, the determinants of farmer participation and performance in cotton and tobacco schemes (Essay One), and the economy-wide effects of expansion and shocks in cotton and tobacco sectors on poverty reduction in concession areas of the Zambezi valley of Mozambique (Essay Two). In the first essay, we find that in both sectors contract farming is an institutional response to widespread failure in input, credit and output markets and the absence of a functional public and market based service provision network. Two stage econometric procedures (testing for the existence of threshold effects in land holdings and educational attainment) indicate that in both areas participation in the schemes is driven by factor endowments, asset ownership and alternative income opportunities, and very little by demographic factors. Also, there are no returns to education in either sector; this result is consistent with previous research in Mozambique but surprising in an agronomically

e the Modern Varieties: labor-intensive, risk-reducing, and productive of cheaper, coarser varieties of food staples". The way this aggregate result came about was, however, a complex phenomenon, and there were not only gainers among the poor. While, overall, the largest poverty reduction effect is likely to have been on consumers through falling prices for staple foods (Pinstrup-Andersen, 1979), there were other benefits for the poor through adoption by smallholders, employment creation for the rural landless, and growth linkage effects with the non-farm economy (Hazell and Ramasamy, 1991). There were also losers among the poor. Small farmers were sometimes displaced by large farmers, tenants by owners, workers by laborsaving innovations, and producers in marginal areas by those in better endowed environments (Scobie and Posada, 1978). Hence, using the technology instrument as part of a strategy for poverty reduction requires careful ex-ante analysis of how the nature of technology, t

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Abstract: A two-sector Ramsey-type model of exogenous growth is used to investigate the relationship between the performance of agriculture and growth. The steady state properties establish conditions for Malthusian-like sustainability in a country with a declining land to labour ratio while the transitional properties of the model show how agriculture contributes to industrialization. In a closed economy, high agricultural productivity is conducive to a fast transition to a regime of modern economic growth due to the linkage between relatively cheap food and savings. A numerical example also suggests that trade liberalization can substantially accelerate the growth of an agriculturally poor country.

www.ifpri.org IFPRI Division Discussion Papers contain preliminary material and research results. They have not been subject to formal external reviews managed by IFPRI’s Publications Review Committee, but have been reviewed by at least one internal or external researcher. They are circulated in order to stimulate discussion and critical comment.

M., and M. Tiffen. 1993. Environmental change and dryland management in Machakos district, Kenya, 1930-1990. Noronha, R. 1985. A review of the literature on land tenure systems in Sub-Saharan Africa. Report no. ARU 43, Agriculture and Rural Development Department. Washington, DC: The World Bank. Pearce, D., E. Barbier, and A. Markhandya. 1990. Sustainable development: Economics and environment in the Third World. London: Earthscan Publications Ltd. Pingali, P. L., Y. Bigot, and H. P. Binswanger. 1987. Agricultural mechanization and the evolution of farming systems in Sub-Saharan Africa. Baltimore, Md.: Johns Hopkins University Press. Pingali, P. L., P. F. Moya, and L. E. Velasco. 1990. The post green revolution blues in Asian rice production: The diminished gap between experiment station and farmer yields. Social Sciences Division Paper No. 90-01. Los Baos, Laguna, Philippines: International Rice Research Institute (IRRI). Place, F., and P. Hazell. 1993. Productivity eff

Green Revolution technologies have not been widely adopted in Africa. What are the chances that they will play a major role in the near future? This paper shows that the enabling infrastructure, especially rural roads and irrigation systems are not likely to be in place in the humid and sub-humid tropics of Africa in the next 20-30 years. Consequently a typology of the more appropriate set of technology that is input and infrastructure efficient, has high returns to seasonal labor and is sustainable is presented. Research institutions should be geared up now to produce them for use in 10-20 years.

ACKNOWLEDGMENTS The authors are grateful to Michael Johnson for his contributions in many discussions that helped formalize the structure of the paper. The authors also thank two

Before the Green Revolution, agriculture was widely seen as a stagnant, low-productivity, and residual sector that could be plundered of its labor and capital for use in industry. 1 But that view was swept aside in the late 1960s by the dynamism of the Green Revolution. Agriculture came to be seen as a growth sector that could generate more food and raw materials at lower prices; free up foreign exchange for the importation of strategic industrial and capital goods; provide growing amounts of capital and labor for industrial development; with rising rural incomes, provide a growing domestic market for nascent national industries; and reduce poverty by increasing labor productivity and employment in rural areas, by generating more remunerative opportunities for rural-urban migration, and by lowering food prices for all. These developments opened up whole new possibilities for agriculture-led development strategies in low-income countries. 2 What did we learn from the subsequent experiences?

15 agricultural research centers that receive principal funding from governments, private foundations, and international and regional organizations, most of which are members of the