Agriculture Research and Poverty Reduction: Pathways and Drivers in Latin America

Ruben G. Echeverría – International Center for Tropical Agriculture (CIAT)

Agriculture Research and Poverty Reduction: Pathways and Drivers

in Latin America

Agricultural research for rural prosperity: Rethinking the pathways www.scienceforum2016.org

Key messages

• Substantive progress on how to rethink the pathways of AR for rural prosperity in LA

• The rural economy is much more than agriculture and AR is key but one of many factors of agricultural development

• Understanding rural territorial development & the rural-urban interface are key to rethink AR pathways

• AR could contribute a lot to raise incomes of 4M of the total 15M small and medium size ‘farms’


CGIAR needs strong partnerships for R4D pathways to reduce poverty

• The pathways for rural poverty reduction are too long…. And too wide…. So better expected results if there are other actors, but never alone!

• Going all the way in the pathway to reduce poverty means that the CG should partner with public, private and civil society organizations in the development field

Elements to identify AR pathways

• A global, generic, sustainable agricultureintensification strategy may not be the optionthat two thirds of LA family farms may chose

• Many LA family farms are looking to diversifyout of agriculture and invest their time in othersectors…

• With the exception of high value niche marketproducts …


Agriculture: a key element of the rural economy

• Given the backward and forward linkages the sector represents at least 3 times more in the overall economy than usually accounted for…

• But, the rural economy is much more than agriculture …

• And, although agricultural research plays a key role in agricultural development, there are many other key elements out there…!


A great return to rural issues in LAC!

• For almost 2 decades (80s and 90s) to talk about rural poverty in LAC was not a priority issue since markets, foreign investment and trickle down economics plus migration were going to solve this perennial issue…

• These arguments are now a thing of the past, there has been a strong comeback to territorial rural development, peace processes, land markets, infrastructure, extension and agricultural research focused in ‘family farming’


Family farming has a huge potential

• Very limited rigorous impact evaluations, there is no much evidence that rural poverty decreased during the 80s & 90s despite solid economic growth in the region.

• Fatigue with social programs that expanded hand outs dramatically without major impact in rural areas. Mexico now invests 22B in rural development but less than 3% in rural poverty per se...


A new rural research portfolio

• the key challenge is to better articulate social and productive policies under a territorial logic (social policy, production policy, infrastructure and basic services policies, etc.).

• In relative terms, too little investments in non-staples, policies and institutions. In Guatemala and Mexico 20% of new rural income is due to new crops and livestock (fruits and vegetables, coffee, cacao, ornamentals, poultry).


Agricultural research challenge: Development at the rural-urban

interface

• 5.5B people live in the increasinglydiffuse and porous interface of ruraland urban societies

The developing world is urbanizing

30,0

20,0

10,0

0

40,0

50,0

100,0

90,0

80,0

70,0

60,0

Urb

aniz

atio

nra

te,

%

Sub-Saharan Africa

Asia

Latin America and Caribbean

50% of the world’s urban populationlives in cities smaller than 500k

% urban population by LA city size

14,0

6,3

24,8

8,06,4

40,5

2015

10 million or more

5 to 10 million

1 to 5 million

500 000 to 1 million

300 000 to 500 000

Fewer than 300 000

17,2

4,2

27,4

7,46,9

37,0

2030

Rural population living away from a city of ≥50k

%World 2.6Developed countries 1.1Developing countries 2.8Far East and the Pacific 5.4Europe and Central Asia 3.8Sub-Saharan Africa 2.6Latin America and the Caribbean 1.4Middle East and North Africa 0.1South Asia 0.1

Source: Own estimates based on Barbier & Hochard, 2014

Over half of LAC’s total population livesin the rural-urban interface!

42%

37% 36%

18%

2%

60%56%

52%

47%

15%

10%

2%

0%

Urban > 500k Urban <500k Nearby Rural Distant Rural Rural-Urban

Note: Rough estimates, as it assumes that all proximate rural are near small and medium cities

20%

30%

40%

50%

Pro

po

rtio

no

fN

atin

oal

Pó

pu

lati

on

,%

2015

2030

Population:7% in green

43% in yellow & orange50% in red

IMI SP

And (very likely) a large majority of thepoor are in rural-urban territories

Distribution of the poor by size of municipality

Brazil

22%

52%

9%

17%25%

45%

10%

19%

Colombia

20%

56%

9%

15%

Mexico

<20k

20k-250k

250k-500k

>500k

AR pathways under a territorial rural development approach

• Sectorial policies not able to reduce poverty; territorial approach is the new paradigm. ‘Family agriculture’ isthe predominant form of ag in LA

• How can we articulate the territorial approach with thetraditional sectoral approach of agriculturaldevelopment?

• Great heterogeneity, from the very small minifundia in remote areas to agricultural entrepreneurs well linkedto clusters, contract agriculture and dynamic markets

Latin America

TypeFarms

(M)Area

(M HA)

C – very scarce assets+ less favorable environments

10 100

B – Intermediate 4 200

A – abundant assets + more favorable environments

1 100

Total 15 400

Potential elements to identify AR pathways

• Strengthen rural-urban linkages and inter-sectorallinkages (agriculture-industry-services)

• Strong income diversification in rural areas in LA

• There is an inceasing number of rural householdsthat depend much less on agricultural relatedincome (rural non-farm income continues to grow)

• Within those rural households where agricultureis a central source of income, specialization isbecoming more important than diversification!

Labor at the rural-urban interface

• Nonfarm employment accounts for a growing share of total jobs and of household income

• Nonfarm share of rural income

– 37% for Africa

– 51% for Asia

– 47% for Latin America

• Rural areas with weaker connections to urban locations of certain size, have lower participation in the nonfarm economy and the density and quality of those jobs are lower

The bottom line

• Significant progress made by several LA national research institutes, private companies and civil society organizations in the last two decades.

• For the CGIAR to continue to be relevant it is not just a matter on improving on the margins what has been done in the past 50 years….

• Need to rethink our strategic involvement in national sustainable food systems at the rural-urban interface

Food systems at the rural-urban interface

• Deep and rapid changes in all segments of food system

– Consumer

– Retail and intermediate segments

– Food production

• Interlinked drivers

– Urbanization

– Diet change

– Agrifood market system transformation

– Rural factor market transformation

– Intensification of farm technology and agricultural transformation

The rural-urban spaces in the transforming food systems

• The transformation of food systems

– Creates new opportunities for rural-urban spaces: new investments, new actors, new sources of employment and of local economic dynamism

– Not all rural-urban spaces are equally competitive in attracting these investments

– Not all changes are positive from the perspective of the poor, smallholders, consumer health, or the environment

– Exploiting these opportunities requires strategies, action plans, and public and private investments, some of them sectorial, others place-based


www.rimisp.org

Latin American Center for Rural Development

Julio Berdegué et al. World Development 2015

http://www.rimisp.org/

Agriculture Research and Poverty Reduction: Pathways and Drivers in Latin America

Science

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