SANAA, 24 January 2008 (IRIN) - A new report by the World Bank says agriculture needs to be overhauled if income disparities are to be reduced, and poverty and hunger Millennium Development Goals (MDGs) are to be achieved.

Entitled Agriculture for Development, the report, the 30th in a series, was released on 23 January by the World Bank office in Sanaa. In "transforming countries", which include those in the Middle East, it said rapidly rising rural-urban income disparities and continuing extreme rural poverty were major sources of social and political tensions.

"Addressing income disparities in transforming countries requires a comprehensive approach that pursues multiple pathways out of poverty - shifting to high-value agriculture, decentralising non-farm economic activity to rural areas and providing assistance to help move people out of agriculture," the report said.

The Sanaa launch was attended by high-ranking Yemeni officials, including the ministers of planning, water and environment, and agriculture and irrigation.

Low agricultural production

Abdul-Karim al-Arhabi, minister of planning, said the agriculture sector still had weaknesses, the main one being low production.

"Agriculture is a very important sector, but it faces problems like water scarcity and climate change," he said.

He said 31 percent of Yemeni's workforce are farmers who contribute 20 percent to the country's gross domestic product. The total cultivated land is 1,188,888 hectares, according to Ministry of Agriculture statistics for 2004. Crops cultivated include cereals, fruits, vegetables, pulses, fodder, and 'qat' [a mild narcotic leaf].

Cereals were cultivated on 685,491 hectares, producing 487,944 tonnes a year, while the cultivation of 'qat' covers 122,844 hectares, with an annual production of 118,207 tonnes, according to the ministry's statistics for 2004.

'Qat' at expense of wheat?

Minister of Water and Environment Abdul-Rahman al-Eryani said Yemen was unable to produce wheat due to its limited resources. "Water tanks built on mountainous areas irrigate 'qat', the cultivation of which increases by 10 percent a year at the cost of grain cultivation," he said.

According to an international report released in December 2007, and prepared by the World Bank, the UN Development Programme (UNDP), and Yemen's government, poverty in rural areas was 40.1 percent, compared to 20.7 percent in urban areas. Minister of Agriculture and Irrigation Mansour al-Hawshabi said 75 percent of Yemen's population live in rural areas, where 40.1 percent subsist below the poverty line. The population of urban areas will increase by 12 million within 20 years, and unless unemployment is reduced, the number of the poor will get out of control, he said.

High prices, social unrest

The World Bank's Global Economic Prospects 2008, released in January, said world food prices had risen nearly 75 percent within a decade and would continue to do so in 2008. The report said countries like Yemen, Bangladesh and Egypt had liberalised or partially liberalised their domestic food markets and no longer had policy instruments to control food prices.

High prices in Yemen have led to social unrest since the presidential and local council elections in late September 2006. Several protests have been held nationwide as a result, and the latest was on 13 January in the port city of Aden, south Yemen, when five people were reportedly killed and dozens injured after clashing with security forces.

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