Is rainfed agriculture really a pathway from poverty?

•New technology can provide a median net income from rainfed crop production of $558/ha/season.•$558/ha/season will not raise a typical 2 ha small farm above the poverty line.•New technology can improve household food security.•Primary benefits from new technology in SSA will be direct rather than indirect.

Agriculture’s potential to reduce poverty at household level is explored for rainfed crop production in Africa and India. A literature survey of crop improvement and natural resource management interventions demonstrates that new technology can substantially increase net returns per hectare per cropping season. However, the median net income from improved technologies was only $558/ha/season at 2005 Purchasing Power Parity (PPP) and a de facto limit of around $1700/ha/season was identified, with values rarely exceeding $1000/ha/season. These values for net returns from the literature were mostly derived from small-plot studies and are likely to be overestimates when technologies are implemented by farmers on larger areas. Crop production could be a pathway from poverty where smallholders are able to increase farm size or where markets stimulate crop diversification, commercialisation and increased farm profitability. For most smallholders, however, small farm size and limited access to markets mean that returns from improved technology are too small for crop production alone to lift them above the poverty line and the direct benefit will be improved household food security.