Inclusive rural transformation requires investment; it will not happen automatically – UN report

14 September 2016

Economic growth is not enough to save those threatened daily with starvation and governments need to tailor policies and investments to transform rural areas in developing countries if they want to eliminate poverty – those are some of the key findings from a new report by the United Nations rural poverty agency.

“The Rural Development Report marks a change in perspective,” the President of the International Fund for Agricultural Development (IFAD), Kanayo F. Nwanze, said in a news release on the launch of the report.

“It places the rural sector into the bigger picture of the country's development. It demonstrates the need for a far more comprehensive and holistic approach to the economy to ensure prosperity for millions of rural people,” Mr. Nwanze added. “It reinforces IFAD's view, based on 40 years of experience, that investing in agricultural and rural development means investing in the whole economy.”

IFAD describes the Rural Development Report 2016, it flagship publication, as a rallying call to policy-makers and development practitioners to win the global war against poverty, bringing together leading thinkers to analyse the experiences of rural development in over 60 developing countries. This year's report is set in the context of a rapidly changing world, with growing demand for food, increased migration to cities and the impact of climate change and environmental degradation.

“Rural transformation is not automatic. It is a choice,” Mr. Nwanze said. “The choices made by governments and development practitioners have an enormous impact on the lives of people and nations.”

The 2016 report states that the focus on rural and agricultural development is critical because the incomes of 2.5 billion people worldwide still depend directly on rural small farms which produce 80 per cent of food consumed in Asia and sub-Saharan Africa.

It concludes that policies need to be inclusive and must bring poor, and often marginalized, rural people into the economic mainstream so that rural development is socially, economically and environmentally sustainable – furthermore, it notes that this the only way to achieve the 2030 Agenda for Sustainable Development and eliminate extreme poverty and hunger.

“The findings are a wake-up call to everyone who cares about the plight of the poorest children, women and men on our planet,” Mr. Nwanze said. “Every person, every government and every organization engaged in the battle against poverty should read it and act on its findings.”

Rural Development Report 2016: What's it about?. Credit: IFADTV

In September 2015, world leaders agreed on a new development agenda, the 2030 Agenda, to mobilize efforts to end all forms of poverty. IFAD, in the report, stresses that to achieve that vision, rural development is crucial, because in spite of the impressive gains in poverty reduction in recent years, rural populations still make up three quarters of the world's poorest and hungriest people.

The report specifically looks at the impact of structural transformation – the reallocation of economic activity beyond agriculture to include manufacturing and services – and rural transformation (the diversification of rural incomes and gains in agricultural productivity) on poverty reduction.

Some of the report's findings include:

  • The majority of countries that have sustained a rapid transition out of poverty diversified their economies and advanced their agricultural sectors.
  • Creating rural jobs is now just as important as spurring growth.
  • Rural transformation is an integral part of a country's economic development.
  • Agriculture remains vital for economic development regardless of the stage of structural transformation. Leaders need to expand and deepen the agriculture-based rural economy with investments in developing modern agro-industries.
  • The availability of finance and financial services is critical to the long-lasting transformation of rural livelihoods, yet 2 billion people globally have no access to regulated financial services and 73 per cent of poor people do not have bank accounts.

Some of the report's regional findings include:

  • Bolivia, Colombia, Ecuador, Mexico and Uruguay reduced rural income inequality, even as it increased in most Central American countries partly due to targeted government cash transfers.
  • In China, India, the Philippines and Viet Nam, land reform, basic investments in rural areas and other sectoral policies have been decisive factors in rural transformation.
  • Most African countries continue to wrestle with a growing youth population, small and declining manufacturing sectors, and deeply entrenched development barriers. Recent increases in agricultural productivity came not from advancing technology, but from bringing more land under cultivation.
  • In the Near East & North Africa sub-region (NENA), rural transformation pathways have been adversely affected by instability and fragility. This has been compounded by structural issues related to scarcity of water and the youth bulge.


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