Questions and Answers on the Rural Poverty Report 2011

Transcription

1 Questions and Answers on the Rural Poverty Report 2011 What is the Rural Poverty Report 2011? Why is it important? The report is a comprehensive review of rural poverty, which accounts for 70 per cent of the world s extremely poor people about 1 billion children, women and men. The report is an in-depth evaluation of the state of rural poverty and its consequences for people all over the world. It also makes important recommendations on policies and investments that will help rural women and men move out of poverty and, in the process, become part of the solution for the global food security challenges of the next several decades. To that end, the Rural Poverty Report 2011 includes personal profiles drawn from interviews with women and men from around the world who are struggling to overcome poverty and whose opinions, observations and experiences are vital to understanding the contributions they themselves can make in the effort to eradicate hunger and protect the environment for future generations. What are the key food security challenges you referenced? Global food production will have to be raised by 70 per cent by 2050 on as little as 12 per cent more arable land. And output in developing countries will likely have to double from what it is now, in order to feed the 9 billion people who will inhabit the earth by then. Complicating these challenges are the consequences of climate change which will make agricultural production more difficult in many places along with environmental degradation and growing competition for land and especially water. Why are rural women and men in the developing world so important to addressing these challenges? Smallholder farms in developing countries currently feed almost a third of the world s population, and they produce 80 per cent of the food consumed in the developing world. Women farmers play a key role as they produce most of the food that is consumed locally in rural areas. And this is despite the fact that in many areas they have grossly inadequate access to secure land tenure, inputs, credit, equipment and market opportunities. Clearly, the ability of smallholder farms to increase their production in a sustainable way and to be better linked to existing and emerging market opportunities is enormously important not only to reducing rural poverty, but

2 also to feeding the world s growing population and resolving pressing environmental and climate challenges. What is the state of rural poverty today? There has been huge progress, above all in East Asia. But rural poverty continues to be a massive phenomenon. There are still about 1 billion desperately poor people in the world s rural areas. Children and young women and men continue to be a large and growing proportion of poor rural people. And increasing numbers of them are unwilling to live and work in rural communities because they don t see a future in it. This alone intensifies the urgency of addressing rural poverty, as the disaffection of young rural people is a major problem, the consequences of which are felt across the planet. What are the broad trends with regard to the presence of rural poverty in the developing world? While the population of the developing world is still more rural than urban, we expect that total rural population in developing countries will peak in the next 10 to 15 years. It will then begin to decline and thereafter the developing world s urban population will overtake it. The largest numbers of poor rural people are in middle-income countries, but their numbers are declining, while those in the poorest countries are increasing. Overall, South Asia has the greatest number of poor rural people, and sub- Saharan Africa has the highest incidence of rural poverty. What are some of the common characteristics in rural poverty that you see across regions? Generally speaking, rural poverty across regions is associated with insufficient access to or ownership of assets and resources, especially land and water. It is also generally associated with lack of access to financial services, education opportunities, advisory services, infrastructure and well-functioning markets. Certain groups particularly rural women, young people, indigenous peoples and ethnic minorities are often disproportionately held back by disadvantages rooted in inequalities. How important is farming to rural households generally? While 80 per cent of them globally are engaged in farming to some degree, it is also true that most rural households are not farming full time rather, they derive their incomes from a variety of sources. Up to 60 per cent depend on at least two sources for the majority of their income, and about 40 per cent of all rural income is from nonfarm sources. Another important characteristic we noticed is that while there are certainly a large number of rural households that find themselves in chronic poverty, a relatively large number of people are poor only at specific points of time. In 2

3 developing countries, it is typical for up to one-fifth of the population to move into or out of poverty within a five-year period. Does this mean that rural poverty is essentially the same everywhere? No, not at all. Rural poverty is diverse in character when you compare regions of the world, when you compare countries within a region, and in many cases even when you compare areas within the same country. It can also be experienced very differently among individuals within households depending on gender and age, for instance. While most rural households share a tendency to diversify their livelihood base, there is much variation in the degree to which they rely on different income sources such as farming, agricultural wage labour, wage or self-employment in the rural non-farm economy, and migration. The livelihood mix of each household depends on a range of factors. These include its composition and assets particularly land and livestock or lack of these the education of its members and the perception of the risk associated with different choices. The national and local economic environment is also a major factor in determining this mix. In brief, what causes rural poverty? Poverty is typically associated with lack of productive assets, limited economic opportunities, poor education and skills, and disadvantages related to social, political and gender inequalities. However, even people who live above the poverty line can move into poverty for periods of time, as the result of one or more of a range of shocks such as ill-health, poor harvests, conflict, natural disasters, social expenses or market price volatility. On the other side of that coin, how do people typically move out of poverty? Mobility out of poverty is highly associated with personal initiative and enterprise, as well as household characteristics such as education, good health and ownership of physical assets. Outside the household, the key factors are a climate of economic growth and local availability of markets, access to financial services, the presence of decent infrastructure such as roads and utilities, and enabling institutions including good governance. What has happened to rural poverty since the last report that IFAD put out on this subject nearly 10 years ago? First, there was the global food crisis from 2006 to 2008, which drove up prices. This is something that you would expect to be good for agricultural communities, but in fact it has a mixed effect because it also drives up the prices that many poor rural people themselves have to pay to eat and to purchase the necessary inputs for their farms. And 3

4 although food prices have retreated considerably from that spike, higher prices continue to have a mixed impact on rural communities. Secondly, poor rural people are facing escalating natural resource constraints (water as well as land), as well as climate change and its effects, and growing competition for land. Protectionist agricultural trade policies of the OECD countries continue to take their toll on the economic prospects of farmers in developing countries. And the vast majority of poor rural households are still too far removed from the business and market opportunities in both agriculture and the non-farm economy that could enable them to be more productive and prosperous. Unfortunately, when they are integrated into markets, it is sometimes on terms that do not help them move out of poverty. This is the case for thousands of poor rural women working for meagre wages and in insecure conditions in agricultural value chains in Africa and Latin America. Is there any good news in all of this? Yes. Agricultural markets have changed profoundly and fundamentally in recent years and there are opportunities for rural households today that did not exist before. Urban societies are growing and this brings a growing demand for high-quality food. We are seeing the emergence of new and improving agricultural markets modern value chains that are better organized to respond to growing urban demand as well as those that are bringing non-farm jobs to many rural areas. So it s not just a focus on agriculture you are calling for in the report? While agriculture continues to be a key driver of both farm and non-farm economic growth, we have seen benefits from other drivers. The first is that when urban migration and growth happens in a balanced and dispersed way, it can have a positive economic spillover into nearby rural areas and that is indeed happening in some places. Secondly, although it has by no means benefited everyone, the process of globalization and economic liberalization has enabled non-agricultural value chains to drive development and job growth in what used to be desperately poor rural areas. Further, you may have heard the story about how mobile phones are helping farmers and rural businesses become more connected with their markets and it is true that this is an expanding and highly important phenomenon. The expansion of new communications technologies are continuing to help some rural areas develop and become more economically viable. And finally, there is the ever-expanding search for renewable energy technologies perhaps this is one benefit of the growing recognition that climate change is a major problem. Many of these renewable sources, particularly wind and solar power, are most suitable for rural areas so they are helping create jobs and economic activity, as well. 4

5 So, amid these more positive developments, what particular concerns does the report raise? The problem is that poor rural women and men need to manage the multiple risks they face, and this constrains their ability to take up the emerging opportunities. The report makes the key point that it is absolutely necessary to understand these risks and to address them, if there is to be substantial progress toward eradicating rural poverty. Why is understanding and addressing risk so important? For a poor person living in a rural area, investing in new farming technologies, or perhaps starting a small business that will help drive economic growth in the community, or even migrating to the city and sending money home to help the community all of these involve risk. Poor people in rural areas already face enormous risk as it is. They are especially exposed to shocks that can wipe them out financially whether it s the kinds of ill-health that are often prevalent in rural areas, or natural disasters, or conflict. Other risks they face include overall natural resource degradation, growing insecurity of access to land, and greater volatility of food prices. The way they generally manage all these risks is to diversify. And that is why we see more than half of rural households worldwide depending on at least two sources for their income. They also resort to coping strategies that involve incurring debt, selling assets or forgoing educational opportunities for their children. Under these conditions, many households seek to grow their own food rather than buying it in markets, while other farming households will avoid the risk of investing in market-oriented crops because the local markets aren t reliable In addition to these risks, what are the other specific barriers that make it difficult for smallholders to participate in new and emerging agricultural markets? Essentially a combination of the factors that lead to high transaction costs and diminish the conditions for growth, development and risk-taking. Poor infrastructure, such as a lack of good roads, electricity and the communications and technology facilities that are needed for improved market information flows. On that note, in rural areas there is usually a paucity of basic services like health care, financial, banking, credit, advisory and education particularly technical education that is appropriate in the rural context upon which to build local growth and prosperity. Moreover, when services are available, they are often not equally accessible to poor and less poor people, and to women as well as men. When the collective capabilities of farmers are strengthened so that they can better organize among themselves and collaborate with other actors, they are able to address the high transaction costs more effectively and improve their bargaining power in the market. One area where women and men farmers can particularly benefit is in addressing the difficulties and high costs of meeting rigid food safety and quality standards that are often present in the modern value chains that are potentially lucrative markets for them. 5

6 So what needs to be done? The ultimate aim is to develop smallholder farming systems that are productive, integrated into markets and thus profitable, environmentally sustainable and resilient to risks and shocks. An important part of that is improving the overall environment of rural areas to make them places where people can find greater opportunities, face fewer risks and become financially successful. That means more investment in infrastructure, more investment in services like education, heath care and financial services, more investments in agricultural research, and more dedication to upgrading women s and men s skills related to farming and other technological pursuits. Good governance is critical to all of this. So is creating more and better farmers organizations, for women as well as men. These organizations can sell produce in bulk on behalf of their members, reduce risk and transaction costs, work with other organizations and the private sector to bring in buyers, and generally improve farmers market access and bargaining power. But, given the challenges associated with access to land and the deteriorating natural resources base, converting so many millions of impoverished farming households into successful and profitable producers seems like an immense task. It is. And not all will make it. But we have to make the developing world s smallholder farms more productive, and to increase their yields in a sustainable way, if we are to avoid major food crises in the future. And the potential to do it is there. Indeed, we ve seen agricultural production in developing countries rise at a healthy clip of 3 per cent annually over the past four decades. This is largely because of advances in farming practices and technologies such as new seed varieties and improved livestock breeds and better policies and investments by the international community. But even today we still have a long way to go in closing the gap between what farmers in developing countries are producing, and what they could be producing through further available improvements. The Rural Poverty Report 2011 offers a broad range of suggestions based on approaches and initiatives that have worked in some countries for policies and investment strategies by individual nations and the global community to close this gap. This would go a long way towards both eradicating rural poverty and meeting global food security challenges. Like what? What are some of the ideas that can help? A key theme of the Rural Poverty Report is the growing movement towards something that is called sustainable agricultural intensification. This agenda needs to be encouraged. There should be more attention to practices such as: improved soil and water management enhancing soil fertility using a variety of agro-ecological processes 6

7 crop rotations and integration of crop and livestock (and sometimes aquaculture) enterprises integrated pest management the use of crop varieties and livestock breeds that are more productive and more resistant to stress more selective and more frugal use of external inputs seeds, agro-chemicals and water. The practices will differ from place to place and from one situation to another. But the broadest study we have to date on sustainable farming practices shows that they have improved yields by an average of nearly 80 per cent over four years. What we need is a systemic approach that uses a variety of innovations derived from the latest scientific discoveries and from local practices and knowledge to bring agriculture into the forefront of efforts to protect and preserve land, air and water for generations to come. Are you talking about organic farming? In some cases, yes. But while organic farming can be sustainable, it is not sustainable by definition. What we re really talking about are better farming practices overall better soil, water and pest management. Doing what works to improve yields in a sustainable way. In some cases that can mean organic approaches, no-tillage farming or returning to traditional methods and practices to build up soil capacity and improve water retention. In other cases, such as in Africa, it may require more rather than fewer inputs like fertilizer, or new kinds of seeds or pest management practices. Whatever works in the local context in light of the actual needs, concerns and opportunities of poor rural women and men. So sum it all up for me. What does the Rural Poverty Report 2011 suggest needs to be done to eradicate rural poverty? Again, our ultimate aim must be the development of smallholder farming systems that are productive, integrated into dynamic markets, environmentally sustainable and resilient to risks and shocks. At the same time, we need to go beyond what agriculture can do by itself and encourage more opportunities for growth in the rural non-farm economy. And we can do all that first by improving the overall environment of rural areas as places to do business, particularly by supporting their infrastructure and services like finance, communications and health care. Secondly, we need to focus on reducing the level of risk that poor rural women and men face in their everyday lives, and to make that goal a requisite in every anti-poverty effort. By doing this, we can make it more likely that poor rural people themselves will make the investments necessary to become more successful and productive as farmers and as business people. Thirdly, there needs to be more support to advancing the individual capabilities of poor rural people women as well as men particularly by upgrading educational and training opportunities that are relevant in the rural context. Indeed, rural education 7

8 and skills is an area that has been much neglected in the past, and we really need to step up the focus on that. And finally, we need to strengthen their collective capabilities and support their own joint efforts to manage risks and assets, to learn new techniques and skills, and, if they are farmers, to market their produce. These kinds of organizations can also be effective in changing government policies for the better, and they give rural people the confidence and knowledge to advance their prospects for success. What is IFAD? Why does IFAD put out a report such as this? The International Fund for Agricultural Development is an international financial institution and a specialized agency of the United Nations. It was established in 1977 as one of the major outcomes of the 1974 World Food Conference, which was organized in response to the food crises of the early 1970s that primarily affected the Sahelian countries of Africa. One of the most important insights emerging from the conference was that the causes of food insecurity and famine were not so much failures in food production, but structural problems relating to poverty and to the fact that the majority of the developing world's poor populations live in rural areas. Our mission at IFAD is to enable poor rural people to overcome poverty. Our goal is to eradicate rural poverty. To that end, this report is intended to raise awareness about the state of rural poverty today and its larger consequences. It also aims to help build consensus around policies, investments and strategies that we see are working and have great potential to support the world s poor rural people in their efforts to build a more hopeful future for themselves and their children. 8