According to a new report by the International Fund for Agricultural Development (IFAD) economic growth is not enough to transform rural areas in developing countries; governments need to develop inclusive policies and tailor investments if they want to make a fundamental change in rural peoples’ quality of life.

IFAD’s flagship publication The Rural Development Report 2016 with the theme “Fostering Inclusive Rural Transformation” was officially launched this week (14th Sept) at the Italian Ministry of Foreign Affairs and International Cooperation, in Rome, Italy. It brings together data on the state of rural development in over 60 developing countries covering the five IFAD regions and spanning the period 1995-2015. The dataset was used to build understanding of the level and speed of transformation and inclusion in the different regions. It provides insight into regional and country-specific challenges and how factors like employment, youth populations, rights to land, access to finance, gender equality and social protection influence successful rural transformation.

Globally, extreme poverty has shown a steady decline across the globe, but the report identifies that there is still a continued disparity between urban and rural areas, with rural areas showing much slower rates of poverty reduction, related to social, political and economic marginalization. Furthermore, the report states that across the developing world rural areas are largely dominated by small holder farms; in areas of Asia and sub-Saharan Africa these still account for up to 80% of food production and provide livelihoods for up to 2.5 billion people. Therefore, a focus on rural and agricultural development is critical to tackling extreme poverty.

However, there are significant challenges along the way to poverty reduction. As the report highlights the world is changing rapidly, populations are growing exponentially and demand for food is increasing which is putting increasing pressure on the rural natural resource base leading to unsustainable agricultural practices, urbanization and land-use change. This is coupled with climate change, seen in the increasing severity and frequency of extreme weather events, and political unrest and conflicts in large regions have resulted in large scale population displacements.

Five key messages, essential for long term and sustainable rural transformation, are identified in the extensive report that stretches over 300 pages, these are:

  1. Rural transformation cannot occur in isolation but within a broader process of economy-wide structural transformation. Structural transformation is measured as the share of non-agricultural activity in GDP.
  2. While rural transformation may generate both positive and negative effects for rural people, inclusive rural transformation must be made to happen, and this will not occur automatically. Here governments and development societies need to be aware that inclusiveness is highly specific to location, identities, and the prevalent social and economic conditions.
  3. Rapid rural or structural transformation, while necessary, do not automatically lead to a rapid reduction in rural poverty. Evidence suggests that where structural transformation proceeds slowly, but policies and investments lead to fast rural transformation, relatively rapid rural inclusion is possible. In order to achieve and sustain rural inclusion, not only must countries transform quickly, they must also take specific policy actions to give rural people a central role in the transformation process to yield a direct benefit. This is especially crucial for marginalised groups (e.g. women, youth and indigenous people).
  4. Inclusive rural transformation hinges on agriculture, which retains its importance as the transformation unfolds, but requires that distinct agricultural policies be adopted at different stages of rural transformation. These include what are termed “agriculture-boosting” approaches, which aim to spur productivity growth; “agriculture-modernising” approaches, designed to facilitate greater specialisation and diversification of smallholders farmers and rural businesses; and “agriculture-sustaining” approaches which allow these small holder farmers and businesses to have reach and influence into the wider economy and society.
  5. Rural development strategies for inclusive rural transformation are context-specific, but have a similar direction, with high-priority policy reforms, institutional innovations and investments dependent on the speed and inclusiveness of the transformation pathways to date. There are many routes by which an individual country or region can improve rural inclusivity. Analysis of the country wide data by the reports’ researchers identified four typologies into which most countries and regions can be classified according to their speed of economic transformation and inclusiveness, each yield distinct strategies to promote inclusive rural transformation:
  • “Relatively fast transformers/fast includers should aim to adapt to changing conditions so as to sustain progress and address issues inherent in rapid growth.
  • Relatively fast transformers/slow includers should aim to amplify the benefits of growth by expanding the reach of benefits and opportunities to rural populations and minority groups while sustaining the speed of transformation.
  • Relatively slow transformers/fast includers should aim to accelerate the pace of transformation without sacrificing its inclusiveness.
  • Relatively slow transformers/slow includers should aim to amplify the benefits of growth and accelerate the pace of transformation, seeking to both expand the reach and speed up the generation of benefits.”

Recommendations of the report are echoed throughout the 2030 Agenda for Sustainable development published last year, which ambitiously set 17 sustainable development goals (SDG’s) – plus an associated 169 targets – to end poverty, fight inequality and injustice, and tackle climate change by 2030. Many of these goals cannot be achieved without rural inclusiveness. For example, the overarching aim of SDG1 is to “end Poverty in all its forms everywhere.” Particularly catching my eye here is target 1.4 “By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property…..” For SDG2 which is aiming to end hunger, one of the goals is to “…double the agricultural productivity and incomes of small-scale food producers… through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets and opportunities for value addition and non-farm employment.” As a final example, SDG8 focuses on work and economic growth, here so many of the targets are focused around rural inclusiveness for example “Increase Aid for Trade support for developing countries…” “…reduce the proportion of youth not in employment, education or training…” “Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all.”

In an interview, prior to the launch of the report on the 14th, Kanayo F. Nwanze, President of IFAD said “The Rural Development Report marks a change in perspective. It places the rural sector into the bigger picture of the country’s development. It demonstrates the need for a far more comprehensive and holistic approach to the economy to ensure prosperity for millions of rural people. It reinforces IFAD’s view, based on 40 years of experience, that investing in agricultural and rural development means investing in the whole economy.”

In short, policies need to be inclusive and must bring poor, and often marginalized, rural people into the economic mainstream so that rural development is socially, economically and environmentally sustainable.

You can follow the conversation around the report launch online at #ruraltransformation


References and further reading

IFAD, 2016. Rural Development Report 2016: Fostering Inclusive Rural Transformation. IFAD, Rome.

IFAD, 2011. Rural Poverty Report 2011. IFAD, Rome.

The United Nations, 2015. Transforming our World: The 2030 Agenda for Sustainable development. United Nations, New York.

The United Nations, 2015. The Millennium Development Goals Report. United Nations, New York. ISBN 978-92-1-101320-7


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