An alternative representation of poverty-growth linkages is shown in Figure 11.5, which compares each sectoral scenario’s contribution to agricultural growth and poverty reduction. The higher than average poverty–growth elasticities of maize- and root-led growth can be seen in the fact that these sectors contribute more to poverty reduction than does agricultural growth in the Agriculture scenario. However, Zambia should not overly rely on poverty–growth elasticities when design- ing its growth strategy, because the size of a sector and its growth potential determine by how much poverty will be reduced. For example, even though root crops have a higher poverty–growth elasticity than that for cereals, its growth may be constrained by domestic demand (that is, its demand is less income elastic). Although export crops have a modest poverty–growth elasticity, this sector’s growth can increase rapidly without necessarily being constrained by domestic demand. Thus, the con- tribution of growth in export crops to overall growth and poverty reduction can be larger than growth led by root crops. It is important to take into account a subsector’s linkages to the rest of the economy, because these are often said to be larger for agriculture than for other sec-
Figure 11.5—Share of additional growth and poverty reduction under the Agriculture scenario
30 25 20 15 10 5 0
Poverty reduction Growth
Source: The Zambian dynamic computable general equilibrium model results. Notes: Additional growth is relative to the baseline scenario. The sector indicated is the one driving growth in the scenario.