Institution: World Bank
Title: An overview on the nature of rural poverty in Latin America
Theme: Key 1
Poverty in most of Latin America is still more rural than urban, with more than 60 percent of the poor living in rural areas. Ironically, the most influential analyses on poverty have a strong urban orientation, while many questions regarding the nature and magnitude of rural poverty have not been addressed. The heterogeneity of the region's rural poorin education, per capita income, access to services, and security of land tenurecomplicates the analysis.
While we can learn some things about rural poverty from studies done elsewhere, Latin America differs from most other developing regions in its small share of rural workers in the labor market and small share of agriculture in the economy. Latin America is abundant in land with a large proportion of landless or near landless rural workers. While there are some pockets of open rural unemployment, most of the landless work as hired workers, reflecting the high concentration of land. The bulk of agricultural production comes from commercial farms.
This paper synthesizes six recent case studies on rural poverty in Chile, Colombia, El Salvador, Honduras, Paraguay, and Peru; and two thematic articles based on surveys in three Latin American countries (Mexico, Ecuador, and El Salvador). These studies are based on recent rural household survey data encompassing demographics, farm production, household income and expenditures. Recognizing the heterogeneity within the rural economy, the studies distinguish three main groups: small- and medium-size farmers, landless farm workers, and rural non-farm workers.It was found that the return to education in farming is surprisingly small; land redistribution increases total farm output, but only slightly increases household income; and urban economic growth significantly reduces rural poverty.