Determinants Of Rural Poverty: A Quantitative

Small farmers and "minifundistas" tend to be among the poorest segment of the rural population in Latin America. However, preliminary work albeit rather sketchy, suggests that there is a great heterogeneity within the rural poor with respect to income, education, access to services, security of land tenure, and other factors. This implies a broader portfolio of options for the design of a rural poverty alleviation strategy than previously perceived. As part of the World Bank work on a rural poverty alleviation strategy for Latin America and the Caribbean, following a common methodology we initiated a series of country studies based on existing (recent) household surveys aimed at (i) providing a characterization of the household and farm characteristics of small farmers, and (ii) providing a quantitative assessment of the various factors affecting poverty among small farmers, including schooling, age, location, access to extension and credit, security of property rights, and others. The following report on Chile is the first one completed; on-going work includes Honduras and Paraguay. Possibilities for work on Nicaragua, Colombia, and other countries are being explored. The report on Chile, by Ramón López, presents several important findings. Just to highlight two. First, low human capital is the most powerful factor explaining rural income differentials and, a related finding, the high value of secondary education on small farmers’ income. A second striking finding is the apparent lack of significance of the government's extension and credit programs as a source of increasing total income for small farmers. While not a criticism of such programs,