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.
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.
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.