You Reap What You Spend: The Relation between Public Agriculture Expenditure and Food Security

Public investment in agriculture is regarded as an important tool for addressing hunger and nutrition concerns. Empirical evidence of this relation, however, remains scant. The few studies that do assess the impact of aggregate government spending on agriculture, find little evidence of statistically significant effects. This seminar presents results that contribute towards filling that lacuna in literature. For a panel of 59 low-income and lower-middle income countries, it is found that public agriculture spending helped improve food security between 1991 to 2012. The public agriculture spending data used does not include agricultural research and development (R&D) expenditure, which is agreed to have substantial rates of return. Thus, the results are not driven by R&D investments and suggest that there may be intrinsic value to governments spending on the agriculture sector. These results are important given that they pertain to low and lower-middle income nations, where food insecurity is particularly pronounced. From a public policy perspective, they acquire greater significance at a time when governments seem to be prioritising less on the agriculture sector. Finally, the results highlight the cross-sectoral gains that can be achieved through considered policy action, one that is cognisant of complementarities associated with a policy decision.