RURAL DEVELOPMENT REPORT 2016 – STRUCTURAL AND RURAL TRANSFORMATION IN LATIN AMERICA AND THE CARIBBEAN
This chapter looks at the structural and rural transformations in Latin America and the Caribbean (LAC) during the first decade of the twenty-first century, focusing on the Spanish- and Portuguese-speaking countries, which account for 94 per cent of the rural population of LAC.
These countries underwent a vast rural transformation in the second half of the twentieth century, but most had four features in common: spatial integration as functional rural-urban territories formed where the majority of the rural population lives, diversification of rural economies from agriculture, transformation of agrifood systems and value chains under the dominance of corporations, and a blurring of the cultural distance between rural and urban youth owing to rural roads and communications technologies (Berdegué et al. 2014).
These factors have influenced each other in multiple ways, and are both causes and consequences of the structural and rural shifts. The old rural and fundamentally agrarian societies have been replaced by new types of rural societies, in which agriculture is still important but no longer predominant.
By focusing on roughly the fi rst decade of this century, we discuss the advanced stages of the two transformations of a still-developing region. Here, rural inequality remains extremely high, rural societies have already undergone tremendous change, and family farming has survived the shock of very rapid – and in some cases radical – liberalization, and yet keeps on contributing to the rural economy and to society at large.
Our findings are consistent with the main hypotheses of this report, namely that all countries(except Bolivia) that have reduced rural poverty faster than the region as a whole have also experienced rapid structural or rural transformation,or both, but that not all countries that undergo a transformation cut rural poverty rapidly. Every country with rapid rural poverty reduction has also narrowed rural income inequality faster than the regional average, except Chile.
These fi ndings can be interpreted to suggest that it is very diffi cult to reduce rural poverty quickly without rapid structural change in societies, but that such transformation by itself does not guarantee fast poverty reduction. Our findings do not support the oft-heard claim that the recent transformations of rural societies are anti-rural poor. Nor do they support the view that, if we transform the rural and national economies (and add social protection), poverty will automatically fall. What our analysis shows, instead, is that transformation and smart rural development policies are both needed if rapid rural poverty reduction is a national goal.
However, only three countries managed to do better than the regional average in all three dimensions of our analysis (structural and rural transformations and social inclusion). Why are they not doing better, as are countries in other regions that are less advanced along the transformation curve? Three proximate factors appear to be at play: in most countries, agriculture has not increased its productivity fast enough, other sectors of the economy have not generated enough high-productivity jobs, and rural economic growth and social-inclusion processes remain highly concentrated in certain territories, resulting in low rural poverty elasticities of growth.
The analysis of this region over this period is useful from an international perspective for at least two reasons: fi rst, LAC allows us to see how structural changes in societies, at large, and in rural societies, in particular, can coexist with social exclusion, and that deep and rapid economic change does not always bring about development for all. Second, LAC can mirror the transitions in other developing regions, considering that over the past 30 years most of the LAC countries moved several steps up the scale towards becoming high-income and low rural poverty nations. As countries in other developing regions are undergoing the changes that LAC has already undergone, they may wish to review insights from LAC.