Abating Rural Poverty in the 2010s

The agricultural base remains the key source of solutions to rural poverty, yet it is supplemented with other solutions that seek to add value to small agricultural production and, more broadly, to the entire range of non-agricultural capabilities of the rural population. It is necessary to integrate already existing services with a new battery of tools such as, among others, inclusive rural venture developers, angel investor networks applying resources and management to high-social and environmental impact rural ventures, local investment funds to support small rural producers, programs that fund rural innovation. These new tools aim at overcoming the circumstances that block the development of small rural production: the scale in which they operate, the knowledge gap, the initiative debilitated by the conditions of extreme scarcity, access to contacts and markets, the cultural change toward responsible efficacy.<emb130|center>

The agricultural base remains, no doubt, the main source of solutions to rural poverty. This includes considering critical aspects of small-scale farm production such as the tenure and use of land and water; technological innovation and productivity enhancements, management of small units; credit access; trading and intermediation systems; product transportation, irrigation, storage, road, port and communication infrastructure; streamlining of agricultural institutions that can ensure a greater focus on rural development.

As a complement to these core actions aimed at abating rural poverty, there appear other solutions that seek to add value to small-scale farm production and, more broadly, to the entire range of non-farming capabilities of the low-income rural population. This encompasses the agribusinesses that raise the value of small farmers’ production, rural tourism and rural manufactures, the promotion of rural service centers, improved performance of the rural education system, mainly farm schools and institutes.

A Rural Development Support System

An effective rural development support system that brings together existing and new services is a critical element in the rural poverty eradication effort. As with any innovation, adding new components to those that are already providing good services entails risks; however, if well designed and structured, those new additions may contribute to catalyzing the tremendous potential residing at the base of the rural social pyramid.

The experiences that had been tried made it possible to gather knowledge about problems and solutions; however, rural development initiatives have almost always been implemented within a context of severe constraints; sometimes because they lacked sufficient political support, other times difficult circumstances were being faced at the domestic level; because interests far more powerful than those of small rural production were confronted, because of incompetence, or the very complexity of the rural issues addressed.

In the current circumstances it is worthwhile to try new ways of operation; new modalities capable of fostering better rural development initiatives, generating greater trust and interest among the players involved, and adding efficacy and concretion to the efforts under way. We are talking about reinforcing the current rural development support system with a battery of new instruments that can mobilize the bottom of the rural social pyramid: among others, inclusive rural venture developers, angel investor networks that allot resources and management to rural projects with high social and environmental impact, local investment funds to support small rural producers, programs that fund rural innovation.

These new tools aim at overcoming the circumstances that block the development of small rural production: the scale in which they operate, the knowledge gap, the initiative debilitated by the conditions of extreme scarcity, access to contacts and markets, the cultural change toward responsible efficacy.

The tiny scale prevents small producers from accessing better economic opportunities; nevertheless, today there exists modern business engineering that makes it possible to effectively bring together scattered small production into medium-sized business organizations. For instance, franchising systems, cooperative conglomerates, centralized service providers, trading and export consortia, locomotive agribusinesses and community supermarkets. Yet, who are today in a position to foster those new small production stimulus initiatives? Who can facilitate access to knowledge of excellence, to the information and contacts that constitute the basis for modern solutions? Who would be in a position to encourage a fair, as well as effective, management? What players might be capable of bringing together strategic partners for inclusive ventures that, in addition to financial resources, could contribute non-financial added value so as not to stumble back into projects that end up being “poverty ghettos”?

An inclusive rural venture developer can identify good business opportunities that contribute to giving impetus to clusters of small rural producers and, on that basis, organize modern inclusive ventures that combine effectiveness and fairness.(1) This applies to both agricultural production and other non-agricultural rural productions. By acting this way, a developer works out the small scale problem; establishes a permanent knowledge, information and contact access channel; helps the low-income rural population to take valuable initiatives, and facilitates a cultural change that, while preserving the identity of the rural community, enables it to access new technologies, management modalities and responsibilities. In fact, it is not complex to establish a developer (Opinión Sur offers assistance in this field); however, to attain this, the commitment of a firm and enlightened local leadership is required.

In this regard, inclusive rural ventures-oriented angel investor networks and local funds are good strategic complements to abate rural poverty and can be promoted as a mixed public-private-civil society initiative; they will help materialize opportunities to mobilize the production at the rural base of the social pyramid.

From Analysis to Action

Until mid-20th century, rural poverty had an entity of its own, and addressing it was a top priority almost worldwide. With the urbanization and globalization process, the issue of rural property lost preeminence in the interest and concern of development strategists, particularly those from the major centers of strategic thinking in affluent countries. Instead, in our countries in the Southern Hemisphere, rural poverty remains burdensomely current; forsaking it constitutes one of the most serious deficits in today’s action and our vision of the future. The enormous potential that resides at the base of rural societies is the other side of the tremendous backwardness in which they are immersed. To come out of the contemporary crisis by adjusting the course and our way of functioning requires recovering that population and production universe, appreciating and valuing their actual contribution to development, listening to their voices and becoming aware of their vocations and, based on that, adding value to initiatives that are capable of mobilizing the rural (farming and non-farming) production potential. For that to become a reality, sound policies and regulations are required, but we also need to have access to that new generation of promotion tools as part of an efficient, non-bureaucratic support system for small and medium-sized rural entrepreneurs.

At the dawn of this new decade, doing a little more of the same will not be enough; it will be necessary that we adjust the course and add innovation to the experience so far acquired. The backbone of the effort consists in productively mobilizing the low-income rural sectors and, in such a process, facilitating their access to an appropiate income. For this to occur, it will be required to secure the convergence in favor of the base of the social pyramid of (i) macroeconomic policies (particularly via improving public spending allocation, reducing fiscal policy regressive systems, and ensuring monetary stability and access to institutional credit), (ii) new mesoeconomic initiatives of rural production chain leaders so that the value and competitiveness of small production may be enhanced, and (iii) direct small rural producer support actions through traditional assistance mechanisms as well as the new above-mentioned promotion tools.

In this context, the development of strategic autochthonous thinking and effective policy-making are essential in orienting the transformation process, but a much greater effort is still required to make sure that such constructions are materialized into concrete initiatives and measures. Even though it would be a mistake to rush into solutions without a systemic analysis of rural development (the solutions might end up being ineffective or counterproductive), it is also true that many times there has been an abusive use of research and policy-making responding to the viewpoint or interests of those who make them rather than to those of the populations involved. Analyzing, reflecting, consulting, mobilizing wills, proposing measures, all make up a conglomerate of complementary activities that enrich one another but they find their greater social justification when they get to be implemented.

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Notes:
1) In relation to the nature and operation of inclusive venture developers, please refer to the article about this subject published in the December 2009 issue of Opinión Sur ((issue)).

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