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Dryland investments pay off in India and China

Conventional wisdom has it that progress in agricultural development will be more rapid in favorable environments: those with ample rainfall, irrigation and good soils.

Fan and Hazell (2000) tested this dogma by analysing the returns on development investments in marginal versus favored districts/regions in India and China over the past three decades. They looked at investments in research and development (limited to crop varietal improvement in the case of India), irrigation, roads, education, electricity, and rural telephones.

Surprisingly, they found that returns to the public's development investment were greater in the marginal areas than in more favored (wetter, more fertile) environments. Both productivity enhancements and poverty alleviation were greater in the marginal areas.

They explain this result by suggesting that the favored areas in India and China have already benefited from major development investments, making additional gains harder to come by (noting that this may not be extrapolable to Africa, though where such gains may still await).

Apparently, the relative past neglect of unfavored areas such as the drylands has left under-exploited opportunities that are now being reflected in high returns to the research-for-development dollar. The benefits to poverty alleviation and equity may be especially important, because otherwise the gap between the 'haves' and the 'have nots' would widen further.

Return to "Dryland success stories"


Fan, S. and Hazell, P. 2000. Returns from public investment: evidence from India and China. Brief 5 of 9 in Promoting Sustainable Development in Less Favored Areas. Focus 4, IFPRI 2020 Vision, November 2000. Washington, D.C.: International Food Policy Research Institute. http://www.ifpri.org/2020/focus/focus04/focus04_05.htm



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