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A fresh look at rural development

Years after it went out of vogue, the rural economy is again emerging as a priority for boosting national performance and reducing poverty, according to experts at a seminar held in New Orleans in March during the IDB’s annual meeting.

“Today we realize that it is not possible to produce sustained growth and sustainable development without investing in the agriculture sector,” said IDB President Enrique V. Iglesias at the seminar, entitled “Development of the Rural Economy and Poverty Reduction in Latin America and the Caribbean.” “It is not possible to reduce rural poverty, nor urban poverty as well, without investing in the rural economy,” he said.

The seminar participants were assembled to consider a new IDB strategy on rural development that is based on a broad, multisectoral vision. The strategy acknowledges the great diversity of conditions from one area to another in Latin America and the Caribbean, as well as alternative economic opportunities in rural areas. In addition to agriculture, these alternatives include tourism, industry and handicrafts. Rural development policies must also take into account migration to urban areas, as well as social networks for those who remain and the need to reduce inequities due to gender and ethnicity. In many countries, agriculture accounts for a third of economic output.

The seminar, which was sponsored by the Government of Denmark, included presentations by civil society representatives, public and private sector experts as well as ministers of agriculture from several Latin American countries.

Rural residents must contend with serious and often worsening poverty, according to Waldemar W. Wirsig, manager of the IDB’s Sustainable Development Department. Between 1994 and 1997, he said, the percentage of rural households in the region living in poverty dropped only slightly, from 56 percent to 54 percent. Overall, rural poverty is worse now than in 1980.

“This shows that we have not achieved convincing gains in the fight against rural poverty,” said Wirsig. “The slight improvements achieved in some cases have been due more to high rates of migration than to a closing of the gap between living conditions in rural and urban areas.”

From these failures, a number of lessons can be drawn, said Wirsig. For one, rural poverty can not be reduced through global strategies or mere economic growth. Another lesson is that rural development programs do not produce results without economic policies that permit profitability in the agricultural sector.

“And we have particularly learned that limited participation by beneficiaries in development programs resulted in projects that did not address real needs,” he said.

Wirsig described a series of measures needed to reverse the trend, such as:

Reform public policies that discriminate against rural development.

Strengthen the public sector and finance basic agricultural services such as technology and animal and plant health.

Promote nonagricultural productive activities in rural areas through tax and financial incentives.

Provide secure land ownership and promote access to land.

Strengthen rural financial services.

Improve natural resource management.

Also speaking at the seminar was Torben Brylle, undersecretary of the Royal Danish Ministry of Foreign Affairs, who emphasized the need to promote agricultural development and protect the environment. “Degradation of the land does not only result from agricultural practices by small farmers, but also from overexploitation by large farms,” he said. He called for stronger measures to protect the environment from agricultural, forestry and mining operations.

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