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Rural development
Economic promotion
In low-income countries agriculture is often the sector with greatest scope for development, and which ensures the livelihood of a majority of the population. Promoting agricultural production and the processing of agricultural produce is thus a major part of German development cooperation in the field of rural development.
Our partner countries too are called on to invest in this area, especially in small farming. African states have undertaken to allocate a minimum of 10 per cent of their budgets to this sector.
Promoting the rural economy, however, means more than investing in and promoting agriculture, forestry and fishing. It embraces all economic activities in rural regions, which includes promoting small and medium-sized businesses, developing rural finance systems, promoting local research facilities and building infrastructure. Education too is an important precondition for economic growth. World Bank studies indicate that even four years of schooling can raise the productivity of small farmers. Access to education and vocational training must then be improved for the people living in rural areas.
The success of economic promotion activities will depend on the economic framework at national and international level. Governments can take steps to ensure greater transparency, legal certainty and improved conditions for investment. Overly intensive interventions in market mechanisms can, however, have a negative impact on prices, and thus reduce the incentive to produce.
Economic promotion must go hand in hand with producer- and market-oriented agricultural policy at national level. At international level, fair terms of trade must be ensured in global trade in agricultural produce.
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