2.4 The role of agriculture in poverty reduction
2.4.3 The heterogeneity of the rural world in developing countries
reduction reflect the heterogeneity of the poor and the diverse rural and agricultural systems in which poor people live and operate. There is ample evidence to suggest that poor people do not form a homogenous group as they experience very diverse living conditions and have very diverse interests. They could be, for instance, grouped according to the regions or continents where they live; their locations, i.e., rural or urban areas; and their access to resources such as
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land and other forms of capital (Wolz 2005). Accordingly, Wolz (2005:2) identify at least seven categories of rural poor: small-scale farmers, landless rural residents, nomadic pastoralists, ethnic indigenous groups, artisanal fishermen, displaced or refugee populations, and households headed by women. In similar vein, five “rural worlds” have been identified in the OECD (2006:11) report. These are: large-scale commercial agricultural households and enterprises, traditional agricultural households and enterprises, subsistence agricultural households and micro- enterprises, landless rural households and micro-enterprises, and chronically poor rural households. Lipton (2004), quoted in Byerlee et al. (2005), acknowledges the increasing diversification of rural incomes, especially, in some countries of Asia and Latin America but argues that while diversification in some countries of Asia and Latin America might reflect vibrant non-agricultural sectors, in other countries, particularly in most of African countries, diversification appears to reflect what he refers to as “diversification and migration of despair”
and as such, it cannot be regarded, in his view, as long-term strategy for poverty reduction in those countries. Likewise, Diao et al. (2006) refute the agro-pessimist argument about the role that growth in the oil and mineral export sectors in poor countries could play in spurring economic growth and poverty reduction in those countries. These scholars contend that growth in oil and mineral export sectors is likely to lead to an appreciation of the real exchange rate that penalizes other traded goods sectors, including agriculture. They further argue that the income from such export is likely to be captured by a small group of elite people in the developing countries. They also point out that the export of natural resources necessitate capital intensive means of production with little demand for local labor and weak links to the domestic economy through the economic linkages discussed earlier. In similar vein, Diao et al. (2006) argue that the current globalization and trade liberalization waves in the global market economy raise other challenges which could make the agro-pessimist argument of by-passing agriculture and proceed directly to industrialization impractical, particularly in developing countries. Among others, they mention the following: First, growing the nascent industrialization in developing countries in the current open global economic order is very challenging as the poorly performing industries in developing countries need to compete with well-established and efficient industries from rich countries at both domestic and global markets. Second, the industrial sector absorbs a small quantity of labour force to such extent that it could take several decades to create enough jobs for
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the entire labour force in poverty-stricken countries. Third, although this argument suggests that the free trade has made available of cheap food, it is still a reality that the prices of food remain high in developing countries due to the high transport costs caused by poor infrastructure in those countries and this seems to support the view that “growing food where it is needed is still the least expensive option” for countries in developing world(Diao et al. 2006:17).
Further, another important factor that this literature highlights is the “feminization” of agricultural work. As an illustration, the OECD (2006:17) report indicates that, for instance, in Cambodia, 65 percent of the agricultural labour and 75 percent of fisheries production are in the hands of women. In this country, 85 percent of rural women are responsible of food production, of which 78 percent are engaged in subsistence agriculture, compared with 29 percent for men.
The report also indicates that the households headed by women are more likely than households headed by men to work in agriculture, and they are also more likely to be landless or have significantly smaller plots of land. The picture looks more balanced in Africa. Delgado et al.
(1998:4) report that of the 20 countries for which data were available for 1980 to 1992, 13 had at least 50 percent of their economically active male population working in agriculture. Actually, four of those countries had over 75 percent of their male population working in agriculture. With regard to the female population, 14 of 20 countries had more than 50 percent of female population working in agriculture.
As the OECD (2006:11) report indicates, understanding all these dynamics within the rural economy is very crucial as they clearly show that “poverty is located unevenly across and within rural populations, that policy in and for agriculture affects different groups in different ways”. As a result, the differing views on the role of agriculture in developing countries perhaps should rather be seen as a continuum of potential outcome that will differ from country to country, and perhaps even within a country. Rather than contending which view should prevail, it is more informative to consider the reasons why agriculture might make a positive contribution to poverty reduction.
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2.5 Agricultural-led pathways to growth and poverty reduction