From poverty to power - Oxfam-Québec

3 POVERTY AND WEALTH LIVING OFF THE LANDmany governments broke up state marketing boards and curtailedinvestment in extension services to farmers, public research, ruralinfrastructure, and credit provision. 22Though abandoned by governments and by millions of residents,half of the world’s six billion people still live in the countryside. Ruralareas still account for the majority of people living in absolute povertyand for half of the world’s undernourished people.Despite urbanisation,around 50 per cent of people living in poverty will still be in the countrysidein 2040. 23Despite diversification, agriculture remains at the heart of rurallife in developing countries. Two-and-a-half billion people live inhouseholds involved in agriculture, over half of them either landlessor on farms of less than two hectares. One in five works as an agriculturallabourer, a proportion that is rising in most regions. 24The history of countries as disparate as the USA, Taiwan, andCosta Rica shows that agriculture can enable people to work their wayout of poverty. Moreover, improving farm output is a critical first stepfor national economic take-off. Citing agriculture’s ‘special powers,’the World Bank concludes that it is at least twice as effective at reducingpoverty as growth in other sectors. 25 Growth in smallholder agricultureis particularly effective, especially in countries with a fairdistribution of land (see Figure 3.2). 26Agricultural growth generates higher incomes for farmers, includingsmallholders, and more jobs as labour demand rises, pushing upwage rates. The rural economy as a whole then picks up, as moreprosperous small farmers and labourers increase demand for goodsand services. Greater numbers of rural jobs and increased incomesgenerally lead to improved nutrition, better health, and increasedinvestment in education, while increased local tax revenues allow localgovernments to respond to demands for better infrastructure, such asroads, power supplies, and communications. Agricultural growth alsoreduces food prices for poor people, whether urban or rural.The contribution of small farms to growth usually dwindles as aneconomy takes off.As wages rise and the use of technology increases, thecommercial advantage shifts to larger farms, while the centre of gravityof the economy as a whole normally shifts to largely urban manufacturingand services, which suck in labour from the countryside.121