Rural poverty

Experimental visualization of narrower problems
Other Names:
Rural economic stagnation
Subsistence poverty economy
One of the major goals of every nation's agricultural policy is the provision of adequate food supply to the population. Currently, however, the world has seen food deprivations, chronic malnutrition and famine afflict an increasing number of victims, especially in the poorest of developing countries. There is a growing consensus among experts that world malnutrition, hunger, and starvation are only the most visible aspects of the basic problems of poverty. The landless and the near landless in the rural areas and elsewhere simply lack adequate purchasing power to sustain equitable terms of trade between the agricultural sector and the industrial sector of the nation. Stated somewhat differently, poverty among rural peasants who also make up the majority of the population in most developing countries not only retards the development of a viable industrial sector but also accounts for the stagnation or decline of production in the agricultural sector itself - thus opening the population to hunger and malnutrition. From then on it is a vicious circle - a circle of poverty.

Despite general recognition that fate does not require people to live at a bare subsistence level, long-established patterns of existence and traditional style of life of many Third World rural communities are such that providing the means of day-to-day living overrides making plans for the future. The result is that ancient modes of agriculture and agricultural barter mechanisms are being questioned by the trend toward a cash economy. However, rising expectations on living standards reveal the absence of economic infra-structures such as available capital, saving mechanisms and usable credit. The lack of a well operating marketing system, of an indigenous agricultural research system and of a physical rural infrastructure help maintain subsistence economies. And the frustration of negotiating a change in economic patterns while maintaining a vital cultural heritage serves to discourage the necessary changes from taking place.

The rural poor depend largely on agriculture for their livelihood, and have adapted their way of life to relative isolation, with little access to national resources and very little influence over their future. Their standard of living is low and often declining; their quality of life leaves them severely disadvantaged and less able to change their role without outside help. Their cultural traditions are strong and their societies are distinguished by marked divisions. The causes of rural poverty can be traced to low agricultural yields and low productivity of labour but they are rooted in a complex web of economic, social, political and geographical factors. One of the basic characteristics of poverty is lack of access to land and other rural assets. In addition, there is increasing population pressure on natural resources, with high rates of absolute and disguised unemployment. There are poor institutional mechanisms and extremely limited physical infrastructure and services in rural areas, so that access to the available resources and to decision-makers is severely curtailed. The result is that the circle of poverty is all-embracing and self-perpetuating; the chief challenge facing many of these rural people is merely to survive. Indeed, poor nutrition, bad shelter, low health standards, and inadequate and irrelevant education, combined with primitive farm and household technology, are the main components of rural poverty. These fundamental aspects of poverty are often compounded by seasonal and cyclical factors such as droughts or periodical fluctuations in commodity prices. Local wars or border conflicts also cause widespread misery for millions of rural people uprooted from their homes and land.

In many countries poverty is on the increase. The post war 'Green Revolution' of capital-intensive industrialized agriculture with the introduction of HYVs (high yielding varieties) of wheat, maize and rice, has led to a growing polarization of rural rich and poor, despite increased output. Consolidation of landholdings results in the eviction of tenants and sharecroppers, while increasing mechanization means less demand for the growing number of landless labourers.

Why poverty has increased has more to do with the structure of the economy than its rate of growth. In a society characterized by extreme inequality of income and hence spending power, the very fact of inequality has a number of important consequences. The counterpart to the compression of the income of the poor is the concentration of the economic surplus in the hands of a minority. They way in which this surplus is used in turn largely determines the pace and nature of economic growth. Where the distribution of land is highly unequal the role of large land-owners is particularly crucial in determining the wages and incomes of the other members of rural society. Another reason for the persistence of poverty in rural areas is the pattern of investment in the country as a whole. The level of investment in developing countries is often extremely low; where it does occur it favours the towns. There is an 'urban bias' in the allocation of investment that deprives the rural areas of much-needed capital.

Over half the world's population is still rural and depends primarily on agriculture, forestry and fishing for a livelihood: more than 2,000 million people, the majority of whom live in developing countries. Of an estimated 750 million people in the developing world classified as living in poverty, more than 80% live in rural areas, and about 85% of all absolute poverty is in these rural areas. Among the rural poor, there are over 80 million small land holdings (less than 2 hectares), some 30 million or more tenant farmers, sharecroppers and squatters, and a growing numbers of landless or near landless workers (especially in Asia). The number of landless farm workers in the developing countries is increasing steadily. There are an estimated 47 million in India alone - about 1/3 of the active population in agriculture - and 10 million in Latin America.

On average, 40% of rural people live below the poverty line; that is, they earn an income less than sufficient to supply their basic needs of food, health, water, housing and education. Behind these stark facts there is a mass of people condemned to hunger, malnutrition and ignorance. Despite the rise in average incomes over the past two decades, the incidence of rural poverty has shown little tendency to diminish and, in many cases, the standard of living of some socio-economic groups, notably the landless, has actually declined. The reasons for this may have less to do with aggregate or sectoral rates of growth than with such factors as the distribution of productive assets, the pattern of government investment, and the non-neutrality of technological advance. The experience of growth in the last quarter of a century has not succeeded in mitigating the problem of rural poverty in Africa, Latin America or Asia.

Problem Type:
C: Cross-sectoral problems
Date of last update
04.04.2016 – 19:07 CEST