318 JAMES THURLOW ET AL.


tions in rural areas (Zambia, CSO 2010). An unbalanced growth path, particularly the stagnation of agriculture, explains the weak relationship between poverty reduc- tion and economic growth in Zambia (Thurlow and Wobst 2006). Moreover, recent growth trends suggest that the situation is worsening, with agriculture growth falling even further in 2006–09. Without a pronounced acceleration of agricultural growth, it is unlikely that Zambia will reduce national poverty in any meaningful way. Raising agricultural growth in Zambia poses a signifi cant challenge, not least because of long-standing underinvestment in the sector (Govereh et al. 2006). This is confi rmed by empirical studies, which identify the constraints facing farm- ers. These impediments include a lack of rural infrastructure, particularly feeder roads (Coulter and Onumah, 2002; Jayne et al. 2003); an inadequate research and development (R&D) and extension system (Bezuneha, Amesb, and Mabbs- Zenoc 1995; Elliot and Perrault 2006); and low or unprofi table use of fertilizers and improved seeds (Phiri et al. 2004; Jayne et al. 2007). This situation is admit- tedly compounded by external factors, such as high climate variability and weather shocks (Thurlow, Zhu, and Diao 2009), widespread HIV/AIDS, especially in rural areas (Barnett et al. 1995; Wiegers et al. 2006); and a “Dutch disease” that limits diversifi cation away from copper exports (Breisinger and Thurlow 2008). Implementing policies and investments to address these constraints is necessary to reverse the declining trends in agricultural growth and enhance the country’s ability to reduce poverty. In this chapter we develop a recursive dynamic computable general equilibrium (DCGE) model for Zambia (based on the one described in Chapter 2 of this vol- ume). We use the model to evaluate the national growth and poverty implications of alternative agricultural growth scenarios. More specifi cally, we consider what would be required to reach the 6 percent agricultural growth target that Zambia committed to under the Comprehensive Africa Agriculture Development Programme (CAADP). We also contrast the effectiveness of growth in different agricultural subsectors in reducing poverty and generating economywide growth. This study allows us to prioritize subsectors for investment. Finally, we estimate the cost to the public sector of accelerating agricultural growth and compare it to Zambia’s commitment under the CAADP to allocate at least 10 percent of public resources to agriculture. The chapter proceeds as follows. We fi rst review the structure of the agricultural sector using a farm typology. We then describe the DCGE model and the data used to calibrate it. Results are presented for the baseline and accelerated agricultural growth scenarios, and for the agricultural investment analysis. The fi nal section summarizes our fi ndings and their implications for future agricultural growth strate- gies in Zambia.


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