7

LATIN AMERICA AND CARIBBEAN

The region and its farming systems

The region¹² (see Map) has 505m inhabitants of whom 111m (22 percent) are directly involved in agriculture. Total land area is 2050m ha. It encompasses 42 countries, and contains some of the richest countries in the world in terms of biodiversity, plus the world's largest unfragmented tropical forest - found in the Amazon basin. Some 90 percent of the land area is humid and subhumid. The region contains 160m ha of cultivated land including 18m ha equipped for irrigation. With an average per capita GNP of US$3940 in 1998, it is the wealthiest of the developing regions and also the least dependent on agriculture. Serious problems of equity exist, however, as not only do the wealthy control one of the highest proportions of resources of any region in the world, but there is also a strong urban bias. As of 1997, 54 percent of rural households were classified as poor, against only 30 percent from urban areas. Extreme poverty affected 31 percent of rural households but only 10 percent of urban ones. In total, 47m rural inhabitants were classified as being in extreme poverty, and a further 78m are in poverty. Equity problems are particularly evident in respect of land distribution.

Due to its enormous latitudinal range, varied topography and rich biodiversity, the region has one of the most diverse and complex range of farming systems in the world. The sixteen major systems defined for the region are summarized in Table 7.1 (see Map for their location).

The four most important of these systems from the perspective of population, extent of poverty and potential for growth and poverty reduction are briefly described below.

Extensive Mixed (Cerrados and Llanos) Farming System Covering over 230m ha of wooded and open savannah areas in Central-western Brazil (Cerrados) and Eastern Colombia, Venezuela and Guyana (Llanos), this system has an agricultural population of only 10m. Due to its historic isolation from markets and to soil constraints, the system has traditionally been dedicated to extensive livestock ranching (60m head of cattle are found within the system) and only recently has cropping started to assume a significant role. An early emphasis on upland rice - still predominant in the Llanos - has now given way to soybeans, maize and even coffee in the Cerrados. Although there are still only 32m ha under cultivation, and poorly managed intensification has resulted in severe land degradation in some areas, this frontier system offers enormous potential for future agricultural growth. Poverty is relatively low, although higher among landless immigrants entering the system.

Dryland Mixed Farming System. The system is located in Northeast Brazil and in the Yucatan peninsula of Mexico. Total land area is 130m ha with an agricultural population of over 10m. Despite frequent droughts, little more than 2 percent of the 18m ha of cultivated land is irrigated and agriculture is mainly semi-subsistence based livestock (24m head with the system), maize, beans and vegetable production. There is extensive and severe poverty among small-scale producers, who exist alongside a small number of large-scale extensive ranches that control most of the land. With productivity low, and most land rented or sharecropped, smaller producers often depend on seasonal migration and wage labour for survival. Land degradation is a serious problem.

Source: FAO data and expert knowledge.

Note: // - within the livelihoods column separates distinguishable subsystems.

Maize-Beans (Mesoamerican) Farming System. Stretching from Central Mexico to Panama with an agricultural population of 11m - including a substantial indigenous population - this system covers 65m ha and is historically and culturally based upon the production of maize and beans for subsistence, although coffee and vegetables are important sources of cash income. There are 6m ha of cultivated land, of which one third are irrigated. The loss of better valley lands to non-indigenous settlers and commercial operations has led to high levels of population pressure on hillsides and other marginal areas, resulting in extensive and severe poverty and serious land degradation in many areas.

High Altitude Mixed (Central Andes) Farming System. The system covers 120m ha with an agricultural population of over 7m. Less than 3 percent of the land area is cultivated, but more than a third of this area is irrigated. Throughout most of Peru the system occupies the steep valleys of the high Sierra, while from Southern Peru through Western Bolivia into Northern Chile and Argentina, the altiplano is the predominant landform. The key characteristics are: production at an altitude of more than 3200 metres; dependence on indigenous grains, potatoes, sheep and llamas; and a very strong indigenous culture. Poverty is extensive and often very severe in this system and there are few large producers.

Key region-wide trends

Population will reach 725m by 2030, but the proportion living in rural areas will decline from 25 percent to 17 percent over the next 30 years, leaving rural populations marginally lower than at present. During 2000-2030, cultivated land will expand at least a further 20 percent, irrigated area remaining constant in relative terms at 14 percent of cultivated land. The major cereals have all grown strongly in the last 30 years - almost entirely due to yield increases - and output is expected to continue to expand, albeit at a slower rate. Fruits and vegetables have also exhibited strong growth; the area dedicated to fruit has expanded faster than for any other crop category over this period. Production of oilcrops, particularly soybean and sunflower, has increased at almost 6 percent per annum since 1961, and rapid growth is expected to continue.

Strategic priorities for Latin America and Caribbean

Three key strategic areas are likely to dominate governmental and institutional roles within farming systems over the next 30 years: (i) improving access to land and water in farming systems with extensive poverty and among the poor in other systems; (ii) promoting alternative occupations for the agricultural poor who do not have access to sufficient land and water to escape poverty; and, (iii) strengthening public goods in rural areas. In all these areas, Government will inevitably play a major role, although this must occur in co-operation with civil society and private sector groups. Across all systems except the most remote, it is expected that diversification will be a significant source of agricultural poverty reduction, and would include a shift into higher value non-traditional crops as well as added-value activities, such as grading, packaging, and on-farm processing.

Despite these opportunities, the majority of marginal and sub-marginal farmers will lack the human, financial, locational and natural resource assets to participate in market-based diversification. Two broad alternatives exist: local off-farm employment and outmigration. The creation and sustainability of rural off-farm employment will depend heavily upon the growth of private sector activity, in such areas as agroindustry, tourism and assembly operations. Support is needed for both large-scale employers and small enterprise develop-ment. Larger enterprises may be encouraged through support for training of staff and suppliers, the creation of effective dispute arbitration mechanisms, targeted infrastructure development and tax incentives. Small enterprise promotion would largely focus on removing legal and bureaucratic barriers to business establishment, improved small-scale investment formulation and financing, business management training, and encouragement for the formation of small-enterprise support organizations. In those systems with existing high levels of poverty and limited natural resource potential, high levels of exit are inevitable, given the lower poverty levels and increased availability of services in urban areas. The social and human cost of such outmigration can be reduced, however, through support measures for outmigrants, including training in non-agricultural skills, the purchase of legal and even traditional land rights, and incentives to move to intermediate, rather than capital, cities.

One key area of public goods is infrastructure and such areas as rural roads, electrification and water capture for irrigation are critical for diversification and intensification activities in many areas. However, infrastructure provision must occur in the context of growth opportunities if it is to be effective. Other public goods, such as extension and information services will almost certainly have to be provided through partnerships with the private sector, due to constraints on recurrent expenditure in government budgets.

Overall, the region offers a sharp contrast between extensive frontier areas with low population densities and a high future growth potential, and established densely populated systems - many with extensive poverty. Yet these two extremes share a number of common challenges over the next 30 years and, although it is impossible based solely on the foregoing regional analysis, to prescribe specific national actions, the overall situation demands a clear strategic focus for agricultural development based on three broad, inter-linked, regional initiatives:

Sustainable resource management. Sustainable manage-ment of natural resources and the reversal of resource degradation are of prime importance, both in established high population systems and in rapidly growing frontier areas. However, a clear positive impact on producer incomes is essential if wide-spread adoption is to occur. Components include: dissemination of proven technologies for small-holders, including: green mulching, small-scale no-till, vegetative barriers, terracing and zero grazing; expanded attention to the selection, testing and dissemination of varieties appropriate for small producers, with an emphasis on permanent and tree crops; financing producer out-migration from unsustainable lands to permit reforestation; promotion of off-farm employment opportunities, so as to reduce pressure on densely populated areas; and, improving knowledge of frontier area lands and their fragile soils.

Improved resource access. A fundamental precon-dition for development in the region is improved access to - and control over - land by poorer rural populations. Components include: strengthened catastral, titling and registration services; dispute resolution services; land banks financing consolida-tion of smallholdings, as well as purchase, break-up and resale of larger holdings; improved management measures for communally owned lands, including protection from invasion and colonization; and, taxation policies that provide incentives for sustainable land use.

Increase small farm competitiveness. It is essential to increase the capacity of the smaller producers within farming systems, to respond adequately to trade liberalization and market development. Components include: training of farmer groups in commercial management and administration techniques; improved technologies for high value production; reduced barriers to entry for small enterprises, as well as the strengthening of enterprise associations; the facilitation or part financing of the development of rural market-related infrastructure such as roads, communications and market facilities; and provision of incentives for relocation of agro-processing and other enterprises to rural areas - including training of personnel, infrastructure provision and technical support to contracted producers.

^{12 See Annex for a list of countries included in the region.}