Presentación de Alain de Janvry (University of California at Berkeley) en el marco del taller de lanzamiento de la Alianza para la eliminación de la pobreza rural en América Latina, realizado en Santiago de Chile el 28 y 29 de agosto de 2017.

1. 1
Alianza para la eliminación de la pobreza rural en América Latina
Ideas que proponen los investigadores1
Alain de Janvry
Rural poverty rates in LAC on average 70% higher than urban in
2010-15 at national poverty lines
1
Taller de lanzamiento, Santiago de Chile, 28-29 agosto de 2017
0
10
20
30
40
50
60
70
80
Rural and urban poverty rates LAC countries
Rural Po Urban Po

2. 2
In spite of high rates of urbanization, many countries still have a
majority (or near majority) of their poor in the rural sector
Conclude: Attacking rural poverty (FAO, IFAD, CGIAR, WB-ARD
mandates) remains an important contribution to achieve SDG1
Propose five key ideas for research and policy interventions
1
21
31
57 55
40
34
45
28
47
25
47
58
63
35
Share of rural in total number poor

3. 3
1. Do higher poverty rates in rural than urban sectors
indicate selection into poverty by being/remaining rural?
Do people remain poor by being rural and escape poverty
through the structural transformation (ST) from rural to
urban?
• Prevailing idea with dual economy models (Lewis, Gollin)
But evidence to the contrary in current context (premature-
des-industrialization, informal economy, urban slums):
• Escape from poverty now mainly obtained by raising the
intra-sectoral productivity of labor (esp. ag and services)
• Structural transformation more often associated with
“urbanization w/o industrialization” and with little poverty
reduction

4. 4
• In Tanzania, 85% of rural poverty reduction achieved in
agriculture (34%), in RNFE (25%), and in local towns (30%)
(LSMS-IZA)
• Cross-country data: McMillan, Rodrik, Sepulveda (2017)
show that growth through structural transformation is less
effective than through sectoral productivity growth
Idea 1: Income growth in agriculture and in rural areas (RNFE,
local towns) is key for rural poverty reduction as opposed to
sectoral relocation of labor under ST

5. 5
2. To reduce rural poverty, need increase annual labor
productivity for rural households
• Labor productivity per person/year low in Ag compared to
Non-Ag (as observed by Lewis, Gollin)
• But labor productivity per hour worked is not very different in
Ag compared to Non-Ag (McCullough, 2017, LSMS-ISA)
• A key observation which is not surprising if local labor markets
work: need pay opportunity cost for hours worked

6. 6
Large Non-Ag/Ag gaps in labor productivity per person per year
(blue), but low gaps in labor productivity per hour worked (red).
• Explanation: Ag labor calendars are seasonal for rural
populations, with insufficient opportunities of access to
employment in Non-Ag business and wage work to smooth
out labor calendars

7. 7
• Average hours worked per worker per year (McCullough,
LSMS-ISA for SSA)
oIn non-agriculture: 1850 hours/year (7h/day)
oIn agriculture: 700 hours/year (2.7h/day)
• Gains in agriculture land/labor productivity key for poverty
reduction. Green Revolution (yield growth in staple crops) can
help increase the productivity of work in agriculture, but does
not directly address the low annual labor productivity issue
Idea 2: Key to reduce rural poverty is to smooth the annual labor
calendars for rural households

8. 8
3. Smoothing labor calendars requires an Agricultural
Transformation (AT) and a Rural Transformation (RT) beyond
a GR
• AT: Smoothes out labor calendars through the diversification
and intensification of agricultural production systems
• RT: Smoothes out labor calendars through complementary
employment in an emerging rural non-farm economy

9. 9
Agricultural Transformation
• An example of AT is introduction of short-duration rice
varieties that free land for an additional crop. The shift from
field crops to horticulture and high value crops is also ideal
for this. Both require water control.
• Intensification of farming systems to smooth out labor
calendars requires:
oIntegrated year-round land use management:
complementarities across crops (farming systems)
oInfrastructure investments to link farmers to deep
markets to avoid local technological treadmill and capture
producer surplus
oThe development of land markets, especially for rental,
and labor markets to allow the emergence of
commercial/medium size farms/integrated LF-SF

10. 10
Rural Transformation
• RT to smooth out labor calendars requires:
i. Local endogenous ADLI (Agriculture Development-Led
Industrialization) and ADLS (Services), where income growth
in Ag creates effective demand for non-tradables
ii. Decentralization of economic activity to rural
areas/seconday towns
iii. Population relocation away from areas with low agricultural
potential and excessively remote from markets
iv. Helping labor migrate (reach other labor markets) during
the lean season
v. Social protection to help rural households take risks in
engaging in AT/RT and multiply transfers
vi. Observe strong cross-country correlation between greater
participation in RNFE and less rural poverty (Davis, LSMS-IZA)

11. 11
Idea 3: Key to reducing rural poverty is to pursue AT and RT.
Need design corresponding policy agenda

12. 12
4. How can this be done?
• Countries need a strategic plan/coordinating group (e.g.,
China’s Leading Group on Poverty Alleviation) that goes from
national to territorial and local level
a.Comprehensive space-based/territorial approaches to
the transformations, with concertation mechanisms
b. Manage political economy of AT/RT for fiscal support
• AT: Key role of PO to facilitate contracting with smallholder
farmers (Alianzas Productivas), and labor market for others
• ST: Focus on producers with proximity/infrastructure to
urban demand, and labor mobility for others. In RNFE, focus
on industries linked to agriculture and services (ADLS)
Idea 4: Define national, territorial, and local AT and RT strategies
with rigorous analysis and broad participation and ownership
(derive inspiration from the PRSP process for poverty reduction)

13. 13
5. Need experiment with alternative approaches to GR, AT,
RT toward successful ST
• Diagnostics and correlates of rural poverty
• Greater focus on understanding labor calendars and
determinants of annual labor productivity
• Do pilots to design business models
• Capitalize on natural experiments: secondary data with
identification strategies
• Do field experiments: RCTs, lab-in-the-field experiments
• Make experiments more nimble and policy relevant
Idea 5: Invest more in effective policy research to design new
approaches to GR, AT, RT, ST with focus on annual labor
productivity to achieve SDG1
End

14. 14
Recap of five ideas proposed for research & policy interventions
to achieve SDG1:
Idea 1: Income growth in Ag and rural areas (RNFE, local towns)
more effective for rural poverty reduction than accelerated ST
Idea 2: Key for income growth in Ag and rural areas is to smooth
the annual labor calendars for rural households
Idea 3: Needed for this is to pursue AT and RT and design
corresponding policy agendas
Idea 4: Define national, territorial, and local AT and RT strategies
with rigorous analysis and broad participation and ownership
Idea 5: Invest more in effective policy research to design new
approaches to GR, AT, RT, ST with focus on gains in both work
and annual labor productivity