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Download Rural Poverty in Latin America by Ramon Lopez, Alberto Valdes PDF

By Ramon Lopez, Alberto Valdes

This publication presents perception into rural poverty in Latin the United States. It attracts on six case reviews of contemporary rural family surveys for Chile, Colombia, El Salvador, Honduras, Paraguay, and Peru and several other thematic reviews reading land, exertions, rural monetary markets, the environments, and deprived teams. spotting the heterogeneity in the rural financial system, the reviews symbolize 3 vital groups--small farmers, landless farm employees, and rural non-farm workers--and supply quantitative and qualitative analyses of the determinants of family source of revenue.

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Moreover, if this RPL1 6/27/00 2:29 PM Page 23 Fighting Rural Poverty in Latin America 23 relative land abundance results in low land prices, even a large marketassisted land reform is likely to imply relatively low cost. However, if low land values reflect low returns in farming then the income potential for the beneficiaries is also more limited. Prerequisite for a cost-effective land reform For land reform to be cost-effective, the program should: (i) remain geographically targeted to reduce the fixed costs of supportive infrastructure and other services, (ii) result in additional land transactions that represent a relatively small fraction of overall land transactions so as to avoid a significant impact on land values, (iii) be implemented in conjunction with a deepening of the reforms that reduce distortions that give large commercial farmers a competitive edge in land markets, and (iv) ensure that the design takes into consideration the fact that there is a certain minimum scale in farming that would allow the beneficiaries of the program to surpass the poverty line, since even were they efficient, a scale below the minimum would still leave them in poverty.

The study of Chile is particularly interesting in this regard, because it thoroughly analyzed the channels by which technical assistance affects per capita income, and also because the technical assistance agency in Chile is considered a model for the rest of Latin America. Extension services in Chile have had a significant positive effect on agricultural output. But this did not result in significantly higher income, since output was expanded on the bases of (i) increased use of inputs rather than increases in productivity, (ii) the bias toward traditional crops, mostly for the domestic market, and (iii) a reduction in off-farm labor income induced by the intensification of farm production.

Another common problem resulting from the use of expenditure (income) per capita to determine poverty is that it ignores economies of scale within the household (Lanjouw and Ravallion, 1995). Increasing household size implies less waste of food, clothes and other goods. Most studies reported in this chapter do not make these adjustments, and therefore overestimate the extent of poverty. However, as shown for Peru (see Chapter 14), we do have direct evidence that the poverty parameter is quite sensitive to economies of scale.

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