Assessing an agri-food development strategy: a bi-regional input–output model with resource-constrained sectors

Abstract

Uneven regional development is widely recognised. This paper explores the effectiveness of a regional development strategy based on the agri-food sector expansion in a laggard agriculture dependent region. We use a bi-regional rectangular Input–Output model, explicitly taking into account the methodological and policy implications of resource-constrained products. Results confirm that local transformation of agricultural products has a positive but limited effect, due to land restrictions and impact leaks to the more complex and developed region. The regional development strategy would be more effective if it focuses instead on non-tradable products or not so dependent on natural resources.