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Library Smallholder income and land distribution in Africa: implications for poverty reduction strategies

Smallholder income and land distribution in Africa: implications for poverty reduction strategies

Smallholder income and land distribution in Africa: implications for poverty reduction strategies

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Date of publication
December 2000
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It has been argued that many of the poverty reduction strategy papers pay insufficient attetion to the role of land access and land distribution in rural poverty. Redressing the inequalities between small-scale and large-scale farming sectots is likely to be an important element of an effective rural poverty reduction strategy in countries such as Zimbabwe and Kenya. However, within Africa’s small-scale farming sectors, surprisingly little attention has been devoted to quantifying land distribution patterns and considering how they will affect feasible pathways out of poverty.|This paper provides a micro-level foundation for discussions of land allocation and its relation to poverty within the smallholder sectors of Eastern and Southern Africa. Results are drawn from nation-wide houshold surveys between 1990 and 2000 in five countries: Ethiopia, Kenya, Rwanda, Mozambique, and Zambia.| The paper addresses four major points:why geographically-based targeted approaches to poverty reduction - e.g. focusing on marginal areas - is likely to miss a significant share of the poor in any particular country regardless of targeting efficiency in these areas: poverty among smallholder households is not primarily a geographic phenomenon. Most of the variations in smallholder incomes tend to be within-village rather than between village, or in other words, the poor are geographically scattered throughout all regions of a country. This has implications for targeting vulnerable groups. Targeting of vulnerable, resource poor households requires greater emphasis on intra-community targeting, as a complement to regional targeting. This makes targeting more challenging and costly to avoid private trading disincentives, if the development of private sector-led input and food marketing systems is considered to be an objective of government policy. On the positive side, the fact that poor as well as relatively better-off smallholder farmers are located in the same areas is good news for generating multiplier effects from agricultural growth. Why current enthusiasm for community-driven development approaches will require serious attention to how resources are allocated at local levels: in all five countries there are serious disparities in incomes and land allocation at the local level. This may give pause to current development initiatives focusing on “community-driven development.” While it is possible that village-level disparities in incomes and land could naturally occur as an outgrowth of differences in capabilities and entrepreneurship across households, it is at the very least important to ask whether local or national governance decisions over time play a role in generating such disparities. The data presented here is unable to provide a clear answer to this question. However, the findings do emphasize the need for promoting greater transparency and equity in village-level resource allocation decisions if there is to be a serious attempt to combat rural poverty. This conclusion flows from the strong association between landholding size and per capita incomes, especially at low levels of landholding size. Over time, it is possible that broadbased economic growth coupled with education can help pull landless and near-landless households into more remunerative non-farm activities, lessening the importance of access to land as a dominant determinant of income levels. Why meaningful poverty alleviation strategies in many countries will require fundamental changes to make land more accessible to smallholder farmers: this paper highlights a major structural problem within smallholder agriculture in these African countries. Without major changes in access to land the following processes in these countries are likely to continue:farm sizes are likely to decline over time landlessness and near-landlessness will emerge as increasingly important social and economic problems unless growth in the non-farm sectors can be substantially increasedgiven existing agricultural technology and realistic projections of future productivity growth potential, large segments of the rural population will be unable to climb out of poverty through agricultural growth on their own farms.These findings reinforce the idea that where access to land is highly concentrated and where a sizable part of the rural population lack sufficient land to earn a livelihood, then special measures will be necessary to tackle the problem of persistent poverty. Recent empirical results indicate a negative relationship between the concentration of rural assets and the poverty-reducing effects of economic growth. Structural transformation processes may be retarded in situations in which the distribution of rural assets are so highly skewed that a large strata of the rural population may be unable to benefit from agricultural growth incentives that would otherwise generate broad-based growth multipliers. In some African countries, the distribution of land and other productive assets appears to be more skewed than available estimates for Asia at the time of the green revolution as well as most of South America. Education, which played a role in much of Asia by allowing households to exit agriculture into more lucrative off-farm jobs, is relatively low in most areas of rural Africa by world standards. Improving access to key assets, such as land and education, appears to be necessary to translate agricultural growth incentives into broad based structural transformation.Why sustained income growth for the poorest strata of the rural population will depend on agricultural growth in most countries, and why agricultural productivity growth, while most easily generating gains for better-off smallholder farmers, is likely to offer the best potential for pulling the poorest and land-constrained households out of poverty: Sustained income growth for the poorest segment of the rural population is likely to depend on agricultural growth in most countries. The literature on growth linkages indicates that the first-round beneficiaries of agricultural growth generate important multiplier effects by increasing their expenditures on a range of local off-farm and non-farm activities that create second-round benefits for a wide-range of other households in the rural economy. Income growth derived from agricultural productivity growth generates demand for non-farm activities that has absorbed the rural poor into more viable non-farm activities. In much of Africa, the consumption growth linkages have been found to be especially important The extent and magnitude of these second round effects depend on a number of factors, including education, infrastructure, and institutional development, but importantly include whether the income stimulus is widely spread . The initial distribution of land and other productive assets, which clearly influences how broad-based the first round beneficiaries of agricultural growth will be. While sizeable segments of the smallholder populations do not have enough land assets to respond to “smallholder commercial agriculture” opportunities, the data suggest that there are smallholders with relatively more land and related assets, who probably can respond, and who are located in many of same villages as those who have relatively little land on a household per capita basis. This finding holds powerful implications for policy if shown to be widespread, as suggested by the data. Dynamic labor and services markets, and other employment opportunities should be easier to create (other factors constant) in the very locations where some smallholders are investing and raising their output and productivity. Pro-active public sector investment and policy support in developing these labor and service markets will be a key determinant of the magnitude of the growth linkages to be derived from agricultural growth. [adapted from author]

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