Rural Development

Is economy of scale really what’s best for the agriculture sector?

Over the last two decades there has been a great surge in land reform policies in developing countries. These land reform policies have mainly focused on rural property rights, and have consisted of giving small to medium size farmers, who for years have suffered from tenure insecurity, legal ownership of their land and property. Land reform has different objectives in different countries, but it is generally an attempt to boost development of the agricultural sector and rural regions, where poverty is often at its most extreme.  It is also used to appease peasant farmers, who in many countries are increasingly disgruntled by the rural inequality legacy of colonialism that is now being heightened by the rise of wealthy large scale agribusinesses due to the globalization of the food market.

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There are no country-bumpkin economists: A problem for economic research institutes

Since entering the world of economics a short while ago I have repeatedly been surprised by some major development institutions’ lack of regard for the country-side and rural activities. In the 2009 the World Development Report the World Bank called on an increase in urbanization, and therefore a reduction in rural employment, as “essential for economic success.” This development policy was adopted by both the World Bank and a number of senior economists after seeing the positive effects that industrialization has had in North America, Western Europe and Northeastern Asia.  One underlying view behind this popular urbanization theory is that the countryside is a breeding ground for poverty, which can only be relieved with mass migration to cities where “proper” economic activities in the service and business sectors can be undertaken.

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Export/import restrictions – Will they really help to reduce food insecurity in Bolivia?

Mieke Dale HarrisOn the 16 October 2008 former President Clinton announced at a United Nations’ conference “we all blew it, even me.” This statement was acknowledging the major role that the west played in causing the 2006-2008 global food crisis, largely by their treatment of crops “like color TVs” rather than realizing their worth as a vital commodity for the world’s poor and thus differentiating them from material export/import goods.

Perhaps what is most surprising about this massive misjudgment of agricultural policies  is that it was heavily promoted by a number of the institutions that we tend, or at least hope, to think are working for poverty eradication and not against it. Read More »

With or without you: Should the international cooperation support reduction of deforestation in Bolivia?

There are some policies that are obviously correct from both environmental and economic viewpoints, but which are nevertheless difficult to implement. The elimination of fossil fuel subsidies is such an example. This year, the Bolivian government expects to spend at least US$750 million on direct subsidies to diesel (62%), gasoline (27%) and Liquefied Petroleum Gas (LPG) (10%) use (1). Apart from dramatically reducing funds available for public investment, these subsidies also encourage contamination, congestion and deforestation (2), all of which mean substantially higher social costs than the direct costs of the subsidy itself. The beneficiaries of the subsidy are dominated by the agro-industry in Santa Cruz, which profits greatly from the combination of cheap diesel and cheap land. Thus, the subsidy is by no means pro-poor, and a lot of the benefits are even lost to neighboring countries, as their nationals rent cheap land and use subsidized fuel for growing crops in Bolivia. For example, more than 70% of the area dedicated to soy production over the last decade is in the hands of foreigners (3). The Bolivian government realizes all this and has tried, unsuccessfully, to eliminate the fuel subsidy.

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Valuing Nature?

“Nature is like love: one of the most beautiful things on earth,
but if you put a price on it, it becomes prostitution.”
Nele Marien

Every time somebody converts a hectare of forest into a hectare of agricultural land, they have—implicitly or explicitly—compared the value of standing forest to the value of agricultural land, arriving at the conclusion that agricultural land is more valuable to them. Read More »

“You Can’t Fire Your Land”: How the Humble Farmer Dethrones Free Market Economics

One of the primary lessons in Economics 101 is that of the rules of supply and demand in a market economy and their relationship to price. The basics being that the price of a product will adjust depending on the level of demand and level of supply in any given market and will eventually settle on an equilibrium when supply balances with demand.

Now we don’t need to go into all the details, as, for the sake of argument, we are interested in only one theoretical law governing this relationship. It states that should the market for a particular good get over-saturated with supply, then the price of this good will keep going down until a point where producers will stop making it or scale down their operations as they will no longer be as profitable. Read More »

Livelihood Diversification: Is That All There Is?

It is practically impossible to look into any part of international development without coming across “livelihood diversification”. It is a process whereby families in poor countries move away from relying on just one livelihood strategy to many different ones.

This is widely accepted to apply to the people of Asia, Africa and Latin America alike. The implication being that helping people diversify their livelihoods would be beneficial to development and poverty reduction, especially for those who cannot diversify themselves. Read More »

INESAD News: “Challenging Accepted Wisdoms: Rural-Urban Linkages in Under-Nutrition”

Action Against Hunger UK (ACF UK) recently commissioned INESAD‘s Ioulia Fenton to help write the Guatemala part of a global report on the role of rural-urban linkages in under-nutrition. What this type of research originates from is the growing recognition that people’s lives in developing countries can no longer be neatly compartmentalised into either rural or urban. Someone who lives in a village and has land will also have to get a job in the city selling trinkets to make ends meet. Meanwhile, those who live in the cities will hang on to family land, work on other people’s farms or perhaps grow food in their city dwelling, something called urban agriculture.

Even the urban spaces we live in are also increasingly ambiguous and frequently an urban city can have a very rural face. In fact, depending on whose national standards you use, each country’s urbanity or rurality can look very very different. Read More »

The Urban City’s Rural Face

When it comes to development most take sides. I am not talking about of one country over another, or good guys versus the not so good guys.  Theorists and practitioners, however, do like to specialise in either ‘rural’ or ‘urban’ development. However, the distinction between the two really isn’t quite so simple. National bench-marks of what is considered urban and what rural certainly don’t help either since, depending on which country’s definition you use, India can be more than 70% or less than 30% rural (1).

Take the city of Sololá, the capital of a municipality and a department of the same name in the highlands of Guatemala. Every municipal capital is considered ‘urban’ by the national statistics office and the city’s latest official population counted 68,120 people residing across four barrios (city sections) (2). Whilst this figure would ‘feel’ far too large to any visitor, warranting further investigation, the image of it built in the mind of a distant reader (and their subsequent analysis of it by students and policy makers alike) will vary greatly depending on which statistic is used by the author: the official city figure or the actual population residing within the ‘urban’ space, which, at 8,851 is barely 13% of that (3). And that isn’t the city’s only rural-urban misconception. Read More »

“Waste of Time”: Urban Education Failing Rural Kids in Guatemala

Forty-five, maybe fifty, I don’t remember anymore,” seventy one year old Juan Chúl Yaxon tells me through a warming toothless chuckle that causes his leathery skin to crease around his eyes as we talk about his grandchildren. “If they study, they get lazy and do not want to work. There is no use for someone who has an education title but no land or job… and the women, they should cook and do housework.”

Juan makes his assertions over the noisy hustle and bustle of market day in Sololá, the capital of a district of the same name, half an hour North of the volcano-lined lake Atitlán. The plaza of this small rural Guatemalan city  is overwhelmingly filled with tipica- (traditionally-) clad indigenous faces curiously watching our interaction. In his eyes, his five sons and three daughters are better off working the land on their family finca. He wants his grandchildren to follow suit. Read More »


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