The agricultural sector and the natural resources on which it depends are critical to sustainable rural prosperity. Agriculture is the driving force behind many economies in the developing world. Three-fourths of the world’s poor live and farm in rural areas and farmers frequently make up 30 to 85 percent of a developing country’s workforce. But current agricultural practices—often economically and environmentally unsustainable, and frequently compounded by unhelpful government policies—prevent farmers from achieving increased incomes.

Recent policy reforms in resource allocation, investment, product identification, and poverty alleviation have focused on responding to market signals in the hope that market-oriented economic reform would “lift all boats” by increasing rural household incomes, urban employment, and effective consumer demand for products from rural enterprises. In practice, however, in most countries rural household income gains have been hindered by a lack of complementary investments in rural infrastructure, technical and business skills, and new technologies. Rural families and enterprises often adjust to the new market-driven environment by increasing extractive behavior, which results in deforestation, soil erosion, declining soil quality, and water pollution and availability problems. Nearly two-fifths of the world’s agricultural land is now seriously degraded and much of it is found in the poorest countries.

Against a background of inadequate agricultural extension and marketing services, limited access to new technologies and credit, and outdated skills, farmers and rural enterprises struggle with low productivity in an increasingly competitive economic environment.