The paper explains the key macroeconomic variables that determine the pace of economic growth and the mechanisms by which they also influence the food and agricultural sector. The ‘macro price dilemma’ is shown to be a generalization of the ‘food price dilemma’ that confronts all poor societies. The food price dilemma arises because high food prices help farmers raise rural productivity and household income, whereas low food prices help poor consumers gain access to adequate amounts of food. The paper then discusses the positive role that the agricultural sector can play in speeding the process of growth in the entire economy. The limited, but still important, circumstances in which agriculture can be a direct, significant contributor to overall economic growth are discussed in the context of ‘Lewis linkages’ and ‘Johnston-Mellor linkages’, which operate through factor markets and product markets, respectively. The final part of the chapter examines whether food security and price stability are directly enhanced by performance of the domestic agricultural economy, on the one hand, and stimulate growth in the rest of the economy, on the other.
