Rural Poor Get Poorer, Says Development Fund

THIRTY years after rich nations and international lending institutions began investing billions to help alleviate poverty in the developing world, the plight of the rural poor who live there is worse than ever.

The well-intentioned donors missed a crucial point, a report released today says: The rural poor are not an obstacle to economic development but the very key to producing it.

"Poverty is less a failure of the poor, than a failure of policymakers to grasp their potential," says a report issued by the International Fund for Agricultural Development (IFAD), an effective but little-known United Nations agency. "They are the solution to poverty in the developing world, not the intractable problem holding back societies." Donors erred

The 481-page document says international donors have erred in assuming that development is something that happens to the poor, on a trickle-down basis. In fact, says the agency that has spent 14 years proving its point in 90 poor countries around the world, development is something that can happen because of the rural poor, if only they are given the modest assets they need.

Countries like Cameroon and Indonesia prove the point. Where poor smallhold farmers have been given the land, credit, and infrastructure they need, they have boosted agricultural output, substantially increasing overall economic growth.

"Unleashing the production power of one-fifth of the world's population would be an enormous force for development," says the report of lessons which so far have not been transferred to many developing nations.

Four billion people - nearly 80 percent of the world's population - live in the 114 countries covered in the report, entitled "The State of Rural World Poverty."

More than 2.5 billion of them live in rural areas and nearly half of those live below the poverty line, 40 percent more than 20 years ago. Fifteen million to 20 million rural poor die each year from starvation and diseases aggravated by malnutrition.

Bolivia has the highest percentage of rural poor, with 97 percent of the rural population living below the poverty line. The Asian nation of Bhutan ranks lowest in the report's more comprehensive "relative welfare index," which is based on criteria that include food security, literacy rates, access to health care, and infant mortality rates. The Mediterranean island nation of Cyprus ranks highest on the index.

The already critical problem of rural poverty may grow even worse because of explosive population growth that will nearly double the world's numbers by 2025, the report says. Rural poverty could also spread because of increasing landlessness in vast regions of the developing world. Help small farmers

To alleviate world poverty, governments must harness the energies of the smallhold farmers that comprise the majority of the rural poor, the report says.

To do that, they need to ensure that farmers have the basic tools of production, including land, infrastructure, and access to modest amounts of credit. Governments also need to repeal agricultural policies that keep food prices low to benefit urban dwellers, removing incentives to efficient agricultural production.

Another key to solving rural poverty is recognizing the role of women in rural development. Because poverty has forced men to the cities and even abroad to find work, women now head a growing percentage of rural households in the developing world. But these women face discrimination and neglect. To unleash their potential, the report says, women must be given the same access to the factors of production as men.

"Many of the measures that need to be taken to allow the poor to realize their potential do not involve more expenditures; they involve the elimination of economic distortions against the rural poor," the report concludes.