Agrarian Social Pacts and Poverty Reduction

Abstract

Any effort to address poverty must consider the central place of agriculture. Three out of four people in poor countries live in rural areas, most depend on agriculture for their livelihood, and many live in extreme poverty (World Bank, 2007: 1). Recently, the World Bank has taken a renewed interest in agriculture, noting in its World Development Report 2008 that “today’s agriculture offers new opportunities to hundreds of millions of rural poor to move out of poverty” (ibid.). According to the report, gross domestic product (GDP) growth originating in agriculture is at least twice as effective at reducing poverty as growth in other sectors (ibid.: 30).¹ Poverty in rural areas declined in the past decade, most notably in China, where rural poverty rates fell from 76 percent in 1980 to 12 percent in 2001 (ibid.: 3, 46).² Overall, however, rural poverty rates outside China declined only modestly, from 35 to 32 percent in the past ten years. At the same time, gaps between rural and urban income levels have widened (ibid.: 45–7).