Rural Poverty in Mexico

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Understand the context of rural poverty in Mexico and how the International Fund for Agricultural Development (IFAD) is funding innovative solutions to empower poor rural people in the Mexican …

Understand the context of rural poverty in Mexico and how the International Fund for Agricultural Development (IFAD) is funding innovative solutions to empower poor rural people in the Mexican countryside.

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  • 1. ©IFAD/P.C. Vega Enabling poor rural people to overcome poverty in Mexico Rural poverty in Mexico In rural areas of Mexico, 61 per cent of people were living beneath the national rural poverty line in 2010, according to World Bank data. Given that the country’s rural population was estimated at about 25 million, more than 15 million people in those areas were living in poverty. In general, three factors determine poverty status in Mexico: • Geographic area and proximity to urban centres – this proximity offers opportunities for income diversification and the incidence of rural poverty is highest in remote areas far from cities. • Ethnicity – the poverty rate in indigenous communities is well above the rate for the non-indigenous population. • Gender – women head most single-parent households and face a lack of job opportunities and access to productive resources. The causes of rural poverty in Mexico are partly structural. Poverty arises from a lack of access to basic services such as health, education, sanitation and housing –
  • 2. and to productive resources such as land, technology, knowledge and credit, which would enable small farmers to improve their productivity and income. The causes are also partly transitional, triggered by economic crises that have hindered economic and social development. According to a report issued in February 2012 by the National Council for Evaluation of Social Development Policy, or CONEVAL, food price increases and the lack of long-term economic growth have reduced household purchasing power and contributed to poverty in Mexico. In addition, rural poverty reflects the income inequalities that prevail in the region. For example, while Mexico’s GDP per capita is US$8,920, the average income of the poorest 20 per cent of the rural population is US$456 per year. Rural poverty in Mexico is concentrated in areas with large indigenous populations, notably in the southern states. According to a Konrad-Adenauer-Stiftung report, 75 per cent of indigenous people in the country were living below the poverty line and 39 per cent were in extreme poverty in 2009. In Oaxaca, Chiapas and Guerrero States, extreme poverty affects more than half of the population. The rural poverty rate dropped somewhat in the early 2000s due to a significant increase in public and private transfers – mainly in the form of remittances – as well as an expansion of rural non-farm employment and rural development programmes. However, the rate went back up with the global economic crisis later in the decade. Violence has also taken a toll on the country’s stability and development, with more than 15,000 people killed in drug-related incidents in 2010. Eradicating rural poverty in Mexico The authorities in Mexico have worked over the years to build a legal framework for lasting rural and social development. The Sustainable Rural Development Act of 2001 and the Social Development Act of 2003 were adopted to promote equal opportunities and sustained poverty reduction. Initiatives such as the 2003 National Rural Agreement, between major organizations of farmers and producers, sought to improve productive capacity. The National Development Plan 2007-2012 is guided by the principle of sustainable human development and built on pillars that include achievement of a competitive economy, equal opportunities for all and environmental sustainability. The plan details a substantial agenda providing for goals in rural poverty reduction, improved competitiveness, environmental management and institutional change. Targeted social-protection initiatives, such as the ‘Oportunidades’ conditional cash transfer and the Seguro Popular universal health insurance programmes, have helped to mitigate the effects of poverty in the wake of the global financial crisis. In addition, several national programmes emphasize social development, natural resource management and poverty reduction among indigenous peoples and other marginalized groups. Meanwhile, Mexico has taken an international leadership role in climate-change adaptation and mitigation, as the impacts of climate variability affect key sectors providing sustenance and livelihoods for the population. In particular, lower agricultural yields and insecure water supplies threaten the basic needs both of urban residents and rural communities.2
  • 3. ©IFAD/P.C. Vega Faced with these challenges, however, Mexico still lacks federal legislation on climate change. According to a 2011 report by IFAD and the International Development Law Organization, several laws – including the National Water Act, Federal Law, Law of Sustainable Rural Development, Land Law and General Law on Sustainable Rural Development – should include climate criteria. IFAD’s strategy in Mexico Since 1980, when IFAD began working in Mexico, it has approved nine loans and Projects: 9 grants totalling US$178.1 million for agricultural development projects there. Total cost: US$352.7 million Total financing from IFAD: IFAD’s operations in Mexico have evolved over the decades. Beginning with strong US$178.1 million support for community empowerment, the projects it finances have placed increasing Directly benefiting: emphasis on indigenous peoples – and particularly the participation of indigenous 130,405 households rural women in productive activities. Currently, IFAD focuses on improving income levels and employment in rural communities in Mexico, with special attention to indigenous communities, small farmers and members of the ejidos, or areas of communal land used for agriculture. It also promotes and strengthens the capacity of grass-roots organizations to help achieve sustainable, community-driven local development, and encourages the active participation of rural women and indigenous people in social and economic decision-making in their communities. 3
  • 4. ©IFAD/P.C. Vega The strategic objectives in IFAD’s Country Strategic Opportunities Plan are based on its implementation experience and mirror the objectives of Mexico’s National Development Plan 2007-2012. These include contributing to: • Generating sustainable income and permanent employment through the government programmes in which IFAD participates, with a focus on the poorest and most marginalized segments of the population. • Increasing the effectiveness, efficiency and impact of public spending on IFAD- supported activities that are being implemented within government programmes, with an eye towards extending the reach of these initiatives. • Strengthening capacities to learn from experience and build effective methodologies for scaling up rural development strategies. In line with these objectives, IFAD promotes measures that will increase crop yields and livestock, and provide new markets for small-scale producers. IFAD also supports microenterprise development projects, conservation of natural resources, linkages with local markets and the use of new technologies and information resources to benefit smallholder farmers.4
  • 5. Ongoing operations Mexico City Rural Development Project in the Mixteca Region and the Mazahua Zone Community-Based Forestry Development in Southern States of Mexico Sustainable Development Project for Rural and Indigenous Communities of the Semi-Arid North-WestRural Development Project in the Mixteca Regionand the Mazahua ZoneThe objective of this project is to increase the income and employment of rural poor Total cost: US$47.5 millionand indigenous households in the Mixteca region, located within Guerrero, Oaxaca IFAD loan: US$18.7 millionand Puebla States, and the Mazahua zone, located in the State of Mexico. It IFAD grant: US$2.0 millionrepresents an investment in developing and consolidating pro-poor, small-producer Cofinancing: Spanish Food Security Cofinancing Facility Trust Fundvalue chains by strengthening the social fabric of rural and indigenous communities. (U$US15 million), United Mexican States (US$7 million), beneficiariesThe project has four main thrusts: (US$4.8 million)• Promoting the formation and development of grass-roots economic organizations. Duration: 2012-2018 Directly benefiting: 20,000 households• Developing social and entrepreneurial management capacities among a new cadre of local leaders, including rural and indigenous women and young people.• Supporting sustainable agricultural production through the rehabilitation and sound management of natural resources, particularly access to water.• Developing entrepreneurial linkages and rural microenterprises while facilitating wider access to markets.The project area comprises 50 priority municipalities that are home to most ofthe Mixteca indigenous population and two municipalities where about50,000 Mazahua indigenous people live. The target group consists mainly ofsubsistence agricultural producers who cultivate communal lands, unorganizedsmall livestock producers, artisans with weak linkages to markets, and rural andindigenous women and youth. 5
  • 6. ©IFAD/P.C. Vega Community-based Forestry Development Project in Southern States (Campeche, Chiapas and Oaxaca) The Community-based Forestry Development Project, aligned with the country’s Total cost: US$18.5 million forestry policy, aims to improve the livelihoods and incomes of 18,000 households in IFAD loan: US$5.0 million extremely poor forest communities in the southern Mexican states of Campeche, Cofinancing: Global Environmental Facility (US$5.0 million) Chiapas and Oaxaca. The project is being implemented by Mexico’s National Forestry Duration: 2011-2016 Commission (CONAFOR). Directly benefiting: 18,000 households The aim is to strengthen, in cooperation with project beneficiaries, the capacity of communities to better manage their natural resources, enhance conservation practices such as increasing vegetation cover, and establish mechanisms to cope with the impact of climate change. More specifically, the project: • Provides training on management and sustainable use of forests and plants. • Strengthens community skills in organization and planning. • Helps create profitable and sustainable timber and non-timber activities for indigenous communities, women and other vulnerable groups who have limited access to land. • Strengthens CONAFOR’s capacity to reach poor rural families.6
  • 7. ©IFAD/P.C. Vega Sustainable Development Project for Rural and Indigenous Communities of the Semi-Arid North-West This project addresses environmental conditions underlying the high incidence of Total cost: US$33 million rural poverty in semi-arid north-western Mexico. Poverty in this area also stems from a IFAD loan: US$25 million lack of access to land, the extreme fragmentation of holdings, the deterioration of Project type: Rural Development natural resources and limited access to productive resources. Duration: 2006-2012 Directly benefiting: 7,105 households The project works with rural communities, indigenous peoples and marginalized smallholders in the four states selected to: • Improve conservation of natural resources. • Ensure greater community control over local assets, including land, agro-biodiversity and the natural environment. • Increase the productive capacity of the land through the use of improved production technologies and conservation. • Improve levels of income and employment through the promotion of rural and nature-based tourism, and charges for provision of environmental services. • Increase community participation in local development processes, with special attention to the participation of women and youth. This project is being carried out in close coordination with the Mexican Government’s efforts for territorial development of the micro-regions, and specifically with the National Micro-Watershed Programme (Programa Nacionál de Microcuencas). 7
  • 8. Completed operations Building a poverty- free world Strengthening Project for Rural Development Project The International Fund for Agricultural Development (IFAD) works with poor the National Micro- for the Indigenous rural people to enable them to grow watershed Programme Communities of the State and sell more food, increase their Total cost: US$28.0 million of Puebla incomes and determine the direction IFAD loan: US$15.0 million Total cost: US$43.0 million of their own lives. Since 1978, IFAD Cofinancing: Global Environmental Facility Approved IFAD loan: US$25.0 million has invested almost US$14 billion in (US$4.0 million) Duration: 1993-2000 grants and low-interest loans to Duration: 2005-2010 Directly benefiting: 17,000 households developing countries through projects Directly benefiting: 8,800 households empowering about 400 million people Development Project for to break out of poverty, thereby Rural Development Project helping to create vibrant rural Marginal Rural Communities for Rubber-Producing communities. IFAD is an international in the Ixtlera Region Regions of Mexico Total cost: US$53.3 million financial institution and a specialized Total cost: US$55.0 million UN agency based in Rome – the Approved IFAD loan: US$30.0 million Approved IFAD loan: US$25.0 million United Nations’ food and agriculture Duration: 1991-2000 Duration: 2001-2009 hub. It is a unique partnership of Directly benefiting: 14,500 households Directly benefiting: 20,000 households 168 members from the Organization of the Petroleum Exporting Oaxaca Rural Countries (OPEC), other developing Rural Development Project Development Project countries and the Organisation for of the Mayan Communities Total cost: US$57.2 million Economic Co‑operation and in the Yucatan Peninsula Approved IFAD loan: US$22.0 million Development (OECD). Total cost: US$17.2 million Duration: 1980-1987 Approved IFAD loan: US$10.4 million Directly benefiting: 15,000 households Duration: 1997-2004 Directly benefiting: 10,000 households Contact Enrique Murguia Country Programme Manager IFAD Tel: +39 06 54592341 Fax: +39 06 54593341 E-mail: e.murguia@ifad.org For further information on rural poverty in Mexico, visit the Rural Poverty Portal: htpp://www.ruralpovertyportal.org Enabling poor rural people to overcome poverty International Fund for Agricultural Development Via Paolo di Dono, 44 00142 Rome, Italy Tel: +39 06 54591 Fax: +39 06 5043463©IFAD/P.C. Vega E-mail: ifad@ifad.org www.ifad.org April 2012