Increasing Agricultural Productivity:
Encouraging Foreign Direct Investments in the COMCEC Region
4
1. The Current State of Agricultural Sector in the World
and the COMCEC Member Countries
Agriculture as the source of human food, animal feed, fibre, and fuel plays a key role in efforts to
achieve global sustainable development, further specified in the Millennium Development Goals
(MDG). It is a major occupational sector in developing countries, with the poorest countries
being those with predominantly agricultural economies and societies. 5 Approximately 2.6 billion
people rely on agricultural production systems, be it farming, livestock production, forestry or
fishery. Great achievements in terms of technical advancements improving food production
were welcomed; nonetheless, food security for a growing world population is positioned to
remain a challenge in the next few decades. Therefore it is urgent to conduct further research in
the driving factors behind agricultural sector growth and consequently uplifting prosperity and
living standards of so many individuals.
Suitability of ecological conditions, sophisticated infrastructure, availability of natural resources,
use of equipment and human capacity to carry out agricultural activity (i.e. agricultural
potential) are the key determinants describing the current and future agriculture state.6
According to available data sources7, total population in the COMCEC region equals
approximately 1,6 billion. Although its ratio in total population decreased from year to year, 52
percent of the population is still living in rural areas. More specifically, 69 percent of the people
living in rural areas are engaged in agriculture. This means a total agricultural labour force of
566 million people in the COMCEC region.8
It is important to give information about the agricultural situation in the COMCEC Region before
analysing the FDI. For this reason, current state of the agricultural sector in the COMCEC Region
is assessed and elaborated in this chapter.
1.1 Employment in Agriculture
At relatively low levels of development, agriculture’s share of employment far exceeds its share
of GDP, which is a fundamental cause of the great divergence in productivity per worker and
income per capita between the rural population and the population in the rest of the economy.
Since poverty is mostly concentrated in rural areas, this is particularly serious for poor rural
people.
In 2011, the agricultural population of the COMCEC Member Countries, 566 million, constituted
35,5 percent of the total COMCEC population. Overall, the share of agricultural population in
total population is decreasing in the COMCEC as well as in all sub-regions examined. In the
COMCEC sub-regions which is given Annex 1, although agricultural population accounted for
almost half of the total in 1990 with 46,8 percent, its share decreased to 42,2 percent in 2000,
39,2 percent in 2005 and 35,5 percent in 2011. Within the examined sub-regions, the share
5 IAAST, 2009.
6 COMCEC, 2013.
7 Food and Agriculture Organization (FAO)
8 SESRIC, 2013. BASEIND