Investigating the performance of agricultural sector on well-being: New evidence from Burkina Faso

Burkina Faso’s economy is based mostly on agriculture. Despite this sector’s substantial contribution to economic development, the majority of the population continues to live below the poverty line, and poverty is even more pronounced in rural areas where subsistence farming is the main source of income. The present research intends to assess the effects of the agriculture sector on the wellbeing of society in Burkina Faso from 1970 to 2017 using a Vector Autoregressive technique. The results reveal that agriculture sector has an adverse influence on well-being in both short- and long-run when household consumption expenditure (HCE) used as a proxy of well-being. While this sector uncovered a productive impact on well-being measured by education (EDU) in both short- and long-run. An increase in the agriculture value-added induces an extend in the short-run and a reduction in the long-run of life expectancy (LEXP) in the Burkina Faso. The variance decomposition results show that the agricultural sector will contribute about 57.33% to explain variation in the household final consumption expenditure while industry and service sectors will only contribute about 2.03% and 4.42% respectively. However, the value-added from the industrial sector affects significantly (47.37%) the variation of life expectancy at birth in Burkina Faso. In addition, Granger’s causality test has demonstrated a unidirectional causal impact from agriculture value-added to household income. The same causal links were also discovered, respectively from the agricultural and service sectors to life expectancy. This study emphasizes the necessity to concentrate stakeholders including farmers, policymakers and experts on agri-business strategies and programs, investment in farm commodity processing in the growing country concerned. The farmers may thus change from subsistence to agri-business, therefore accelerating the industry’s growth and creating more jobs for the working population and diversifying the country's household income sources.