Mineral Fertilizer Use and the Environment International Fertilizer Industry Association United Nations Environment Programme

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Mineral Fertilizer Use and the Environment
4. Economics
Economic growth is strongly linked to poverty
reduction. Poverty is itself a form of pollution and,
in addition, the poor are often forced to overuse
or misuse the natural resource base, in order to
meet their basic needs.
Another, February 1994, IFPRI report
described the results of a study in seven Asian
countries, with widely diverse production
environments and agrarian and policy structures,
of the effect of technological change in favourable
rice-growing areas, on the income of people in
unfavourable ones - those by-passed by the new
technology. The contributors found that when
indirect effects of labour, land and product
market adjustments are taken into account,
differential adoption of high yielding varieties,
HYVs, across environments does not significantly
worsen income distribution. As HYV adoption
increased the demand for labour in the
favourable areas, more inter-regional migration
from unfavorable areas took place, which
mitigated potentially negative effects by
equalizing regional wages. Shifts to alternative
crops or non-farm employment in the unfavorable
areas also contributed to equity.
A 1997 report by the Indian National Council
of Applied Economic Research states that India
could virtually eliminate urban poverty in a
decade if it could sustain an annual economic
growth averaging 6.4%. But the report also
foresees growing disparities between Indian cities
and the countryside where 74% of people live.
Agricultural growth is stagnant. The report
suggests that the urban 26% of the population
will increase to 30% in 2007 but this does not
take account of possible accelerated urbanization
prompted by the rising income disparities.
There is today a wide agreement that a
necessary condition for economic growth in most
developing countries is a productive agriculture -
there are some exceptions, but they are few. This
was not always the case. In the 1950s the
emphasis in development policy was on urban
industrial growth, with the agricultural sector
being regarded as a source of inputs, mainly
labour, for the manufacturing sector. It was only
in the 1960s that the positive role of agriculture
as an engine of development became accepted.
Subsequent events in the 1970s and 1980s
reinforced the need for more attention to be paid
to agricultural development policies. But even
today, some developing countries still do not
attach sufficient importance to agricultural
development. If agriculture is to be productive, it
is evident that the crops should receive, from one
source or another, the nutrients they require.
A June 1996 IFPRI study concerning Latin
America confirmed how agricultural growth
helps the whole economy. When agricultural
producers’ incomes rise, they spend money on
non-agricultural items, creating jobs for others
throughout the whole economy. The study found
that for every US$ 1 increase in agricultural
output in developing countries, the overall
economy grows by US$ 2.3.
Apart from being good for the national
economy, productive agriculture helps to
alleviate rural poverty. Most of the world’s poor
are rural-based and, even when they are not
engaged in their own agricultural activities, they
rely on non-farm employment and income that
depend directly or indirectly on agriculture. The
rural poor make up more than 75% of the poor
in many sub-Saharan and Asian countries.

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Mineral Fertilizer Use and the Environment