FAO Regional Office for Latin America and the Caribbean

Press Conference Launch Panorama of Rural Poverty in Latin America and the Caribbean 2018



Panorama de la Pobreza Rural 2018

Questions and answers

1. What has been the evolution of rural poverty and extreme rural poverty in the region since 1990? How much has rural poverty increased since 2014?

1. What has been the evolution of rural poverty and extreme rural poverty in the region since 1990? How much has rural poverty increased since 2014?

During the last two and a half decades, rates of rural poverty and extreme poverty in the region have decreased. Rural poverty decreased by 16.6 percentage points, from 65.2% in the early 1990s to 48.6% in 2016; while extreme poverty was reduced by 17.6 percentage points in the same period, from 40.1% in 1990 to 22.5% in 2016. These percentages represent a reduction of 24.7 million rural poor since 1990.

However, in recent years the trend in rural poverty reduction has ended, and in some countries it has even reversed, with rural poverty starting to grow again.

In the early 2010s, the rate of reduction in rural poverty and extreme rural poverty began to slow. Between 2012 and 2014, extreme poverty was only reduced by 1 percentage point (less than one percentage point between 2013 and 2014), while rural poverty only decreased 1 percentage point between 2012 and 2013.

This stagnation in the rate of rural poverty reduction in the region finally ended with an increase in both poverty and extreme rural poverty of two percentage points between 2014 and 2016 - an increase not seen in the region since the global financial crisis of 2007-2008, and which marked the end of two and a half decades of significant progress in poverty reduction since the democratic consolidation that occurred in most countries of the region in the late 1980s and early 1990s.

Between 2014 and 2016, rural poverty increased from 46.7% to 48.6%, while extreme rural poverty increased from 20% to 22.5%. This increase means that two million rural inhabitants fell into poverty between 2014 and 2016. Considering the latest population statistics for the region, as of 2017 there were 59 million rural poor and 27 million extreme rural poor.

2. What are the reasons for this new context of rural poverty in Latin America and the Caribbean? Why has it stopped decreasing?

2. What are the reasons for this new context of rural poverty in Latin America and the Caribbean? Why has it stopped decreasing?

Because of a combination of several factors: lower economic growth rates; a lack of reforms to address structural factors that reinforce conditions of poverty in rural areas; social policies that no longer offer expanded coverage; a lack of programs to promote the sustainable development of family farming; and, a lack of coordination between infrastructure investment initiatives and social, productive and environmental programs.

In terms of structural factors, economic growth, market dynamism and the generation of employment and higher salaries, as well as an increase in fiscal revenues to implement social policies, are key to poverty reduction. By contrast, in periods marked by low economic growth rates, or even contraction, the lack of dynamism results in lower rates of poverty reduction. In practically all countries of the region economic growth has led to an increase in incomes for the whole population, which has played an important role in reducing poverty.

However, in rural areas of Latin America and the Caribbean the commodities export boom during the 2000s did not have the desired impact on rural poverty given that its benefits were concentrated in a few economic actors, products, value chains and territories, while a broad rural socio-productive sector was excluded from this process of economic and productive modernization. Therefore, the persistence of rural poverty can, among other factors, be a reflection of the asymmetric effects of economic growth among the population.

Secondly, especially during the 2000s, targeted social protection policies were greatly expanded in the countries of the region. However, despite their crucial importance in providing basic social services and building human capital, these policies alone are not capable of ensuring a sustainable exit from poverty. Given the current context of lower economic growth, greater fiscal austerity and the erosion of the region's social policy model that was implemented in previous decades, there is an opportunity to develop a new generation of social policies that link social, productive and environmental issues in rural areas.

Thirdly, rural areas of the region continue to face problems that have significant impacts on rural poverty: urban-rural imbalances (in 25 years the rate of rural poverty continues to double that of urban poverty, while the rate of extreme rural poverty has increased in relation to extreme urban poverty, exceeding the latter by 3.5 times in 2014), deficits in basic infrastructure, severe hunger in some areas, the existence of isolated and remote communities, lack of access to sustainably managed natural resources, and less political-institutional development. The persistence of these challenges in the 21st Century limits the potential positive impacts of economic growth and social policies, and has created pockets of hardcore rural poverty in various countries and territories, which remain mostly unresponsive to public initiatives and have contributed in recent years to the stagnation of poverty reduction and the return to rising rates of rural poverty in some areas.

Finally, during the last decade, rural areas of the region have faced emerging problems, which negatively affect households that rely on income from seasonal or precarious work with no capital, savings capacity, or access to social protection systems, and which tend to be located in more ecologically and socially fragile settlements; that is, the rural poor. In the last ten years, these households have been increasingly affected by the impacts of climate change, higher levels of insecurity in rural areas and demographic changes as the population ages due to the migration of rural youth (reduction in household economic capacity).

3. Which countries should pay more attention to achieving Target 1.2 of the Sustainable Development Goals in rural areas?

3. Which countries should pay more attention to achieving Target 1.2 of the Sustainable Development Goals in rural areas?

Considering Target 2 of SDG 1: "By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions", and taking into account the rate of rural poverty reduction in the last five years, the countries that will reach this target in rural areas by 2030 are: Brazil, Chile, Colombia, Ecuador, Paraguay, Peru and Uruguay.

The countries that are not on track to reach this goal are Bolivia, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama and the Dominican Republic.



4. Has poverty become more severe in rural areas?

4. Has poverty become more severe in rural areas?

Rural poverty in the region is severe, with practically one out of every two rural inhabitants living in poverty. The rural poor today have a higher likelihood of escaping poverty than 25 years ago, however, they are much less likely to do so than urban poor.

Rural poverty is strongly concentrated in some rural areas and among certain vulnerable groups. For example, the population of indigenous or Afro-descendant descent faces rates of rural poverty that are 10 percentage points higher than the non-indigenous rural population.

The poverty severity index measures income inequality in the population living in poverty. The higher this index, the greater the difference between the income of the poorest households and median household income within this group. According to information available for Latin America and the Caribbean between 1997 and 2014, the severity of poverty and extreme poverty has always been greater in rural areas than in urban areas.

For example, during the period of stagnation in poverty reduction in the region (2012-2014), the severity index for urban poverty and extreme urban poverty decreased by 0.1 in both cases, from 1.5 to 1.4 in the case of poverty and from 4.4 to 4.3 in the case of extreme poverty. This situation contrasts with rural areas, where the poverty severity index remained unchanged at 10.7 between 2013 and 2014, but increased from 4.7 to 4.9 in the case of extreme rural poverty between 2012 and 2014. In other words, income inequality within the poor segment of the population has increased to the detriment of the extreme rural poor in the region.

5. Which countries have been the most successful in reducing rural poverty? How have they achieved this?

5. Which countries have been the most successful in reducing rural poverty? How have they achieved this?

All countries in the region face different challenges in terms of the scale, historical context and characteristics of rural poverty within their borders, as well as the availability of resources and their economic capacity to contribute to its reduction. Therefore, the conditions of rural poverty are not completely comparable across countries, although they may benefit by sharing good practices and lessons learned.

Considering the recent history of the region, and according to the latest information available in the ECLAC database of household surveys, the three outstanding cases in rural poverty reduction are as follows: Brazil, which reduced rural poverty by 42 percentage points from 71% in 1990 to 29% in 2014; Ecuador, which managed to reduce rural poverty by 38 percentage points in 14 years, from 66% in 2000 to 27% in 2014; and Chile, which reduced rural poverty by 32 percentage points in 23 years, from 39% in 1990 to 7% in 2013.

In addition, although they maintain high rates of rural poverty, several other countries in the region have achieved an increase in the rate of rural poverty reduction. In this regard, Peru reduced rural poverty by 27 percentage points in 17 years, from 73% in 1997 to 47% in 2014, Bolivia reduced rural poverty by 24 percentage points in 16 years, from 79 % in 1997 to 54% in 2013, and Colombia was able to reduce rural poverty by 19 percentage points in 23 years, from 61% in 1991 to 42% in 2014.

In all cases, the rate of rural poverty reduction has been increased through a combination of sustainable and inclusive economic growth, broad social and productive policies to allow the rural poor to participate in the economic and social dynamics of their territories, intersectoral strategies coordinated at the highest political levels; and comprehensive strategies for the provision of territorial assets.



6. What is the relationship between migration and rural poverty?

6. What is the relationship between migration and rural poverty?

Poverty, violence and environmental vulnerability prevent rural areas from being safe spaces for development. Most Central American emigration originates in rural municipalities (including small towns and cities under 100,000 inhabitants). In Honduras, for example, 76% of emigrants come from 295 rural municipalities. In El Salvador and Guatemala, the figures are 70% from 257 rural municipalities and 61% from 325 rural municipalities, respectively.

The various risks facing individuals, households and communities in rural areas, especially lack of food security, violence, insecurity, illegal economies, and environmental risks, affect their capacity for survival and development in their own territories.

In the case of the rural poor, this environment makes it increasingly difficult to meet their basic needs in conditions of poverty and extreme vulnerability. Given the lack of resources to implement new survival and development strategies in their territories, they are faced with labour migration between territories or international migration, which in the absence of safe and affordable channels can leave migrants vulnerable to illegal circuits of human trafficking that are highly dangerous.

Migration can be a strategy of worker displacement for poor and vulnerable rural households, as well as being a process that has important demographic and economic implications for rural areas with a high rate of rural poverty.

Whether due to factors linked to poverty and food insecurity, insecurity and violence, or due to high environmental vulnerability, rural inhabitants of Latin America and the Caribbean including poor rural households, will continue to see migration as an option for their economic development. States have the obligation to promote comprehensive strategies of rural development so that migration is really a free option and not a forced exit due to the social, productive and environmental conditions of rural areas. States must also promote safe and orderly migration channels to guarantee the right to human mobility. In other words, the abandonment of rural areas by national governments should not be one of the causes of migration.

7. What solutions does FAO propose to address rural poverty?

7. What solutions does FAO propose to address rural poverty?

Across all countries of the region, there is a need to combine economic growth with a package of effective public policies.

In the last two decades, economic growth has played an important role in reducing poverty at the national level in the region, and it is crucial to resume this growth path in order to strengthen the structural capabilities of States in terms of employment, fiscal capacity and economic activity to reduce rural poverty. However, for this economic growth to be more effective in rural areas, it must have a greater capacity to incorporate poor rural sectors than in past decades.

In terms of public policy strategies, first there is the need to create efficient, inclusive and sustainable agricultural sectors. This can be achieved by strengthening investment in public goods, as well as increasing access to land, rural services, better information and risk management in the agricultural sector.

A second important aspect is the need for expanded social protection, which should increase coverage for the rural population, in addition to promoting synergies with the productive sector, especially the agricultural sector.

A third key factor is the sustainable management of natural resources. Poverty reduction policies must be linked to environmental sustainability and promote the resilience of rural populations in the face of environmental threats and economic shocks.

The fourth measure highlighted in the Panorama is the promotion of non-agricultural rural employment, which requires fostering urban-rural linkages, private investment and the provision of basic infrastructure, the linking of agriculture with markets for goods and services, and the implementation of public programs with their own budgets and on a large scale.

Improving infrastructure is also essential for eliminating poverty in rural areas. FAO highlights that public investment in rural assets must be increased and intensified, with infrastructure linked to related public services.

However, the implementation of these five policy areas will only be effective under broad, intersectoral strategies at the highest political level to ensure the technical and operational coordination of different policy sectors. Broad-based coordination and a focus on targeting rural poverty are needed in combination with a territorial approach.

8. What are the main challenges faced by the rural poor?

8. What are the main challenges faced by the rural poor?

Poor rural households face a series of needs and risks that can aggravate or perpetuate their condition, impeding the full development of family members. Among the multiple threats faced by the rural poor, there are four main challenges.

First, the liquidity constraints on incomes of poor rural households affect their consumption of basic goods, such as food, as well as their investment, employment and development decisions, which are limited to low-risk, low profitability options in the absence of financial protection and insurance mechanisms that would allow them to offset the costs of investing their scarce income and possessions in uncertain ventures.

Second, low access to inputs, assets, and productive and economic services, including natural capital such as land, water and forests, as well as energy supplies, limits the productivity of poor rural households and the ability of family members to escape poverty through hard work. Even when they work long and exhausting hours inside and outside the home and on family farms, people living in poverty in rural areas are unable to reach the levels of production and wages necessary to escape poverty.

A third challenge is related to lower access to essential basic services such as health and education, as well as a deficit in the social and technological infrastructure that must be overcome to reduce information asymmetries with respect to other actors in the territory and urban areas, and create economic circuits to generate an enabling environment in rural areas.

Finally, a fourth challenge has to do with the sector's high vulnerability to catastrophic environmental, social and economic events, which may trigger irreversible setbacks in rural livelihoods and in the possibility of escaping poverty. Among these risks, it is worth highlighting the vulnerability of these households to violence, insecurity, illegal economies, dangerous work, natural disasters and shocks linked to agriculture.

9. What is needed to renew the public policy cycle and increase the rate of rural poverty reduction in the region?

9. What is needed to renew the public policy cycle and increase the rate of rural poverty reduction in the region?

Given that 78% of the targets of the Sustainable Development Goals through 2030 depend on actions in rural areas, it is essential that rural poverty is addressed through policies and strategies at the highest level and is no longer made invisible in general development narratives.

In this regard, the international community, States, civil society and the private sector must improve their understanding of this social problem, and strengthen their capacity for dialogue and deliberation as the only way to mobilize the maximum available resources and develop their capacity for effective coordination.

Reducing rural poverty must be a priority in discussions on sustainable development, not only to achieve the SDGs and ensure minimum conditions of well-being for citizens living in poverty, but also because rural poverty is related to other processes that affect development. Higher rates of rural poverty mean more insecurity, more space for illegal economies, more discrimination and violence and less social cohesion.