In the years since IFAD’s Rural Poverty Report was published in 2011, the world has undergone rapid changes that are altering the development landscape. The global economy has experienced major structural shifts, with the emergence of stronger markets in middle-income economies, rising urbanization and demand for food, and several low-income developing countries registering the world’s fastest growth rates.
At the same time, climate change, erratic energy prices and complex and protracted conflicts have delivered a variety of shocks. Several regions have seen large-scale population displacements within and across national borders, and the social and political upheavals linked to unemployment are deepening. Despite impressive reductions in poverty and undernourishment globally, that progress has been uneven, and economic inequality across the developed and developing world alike is increasing.
Against this backdrop, world leaders have agreed on an ambitious development agenda that seeks to end poverty and hunger by 2030. Agenda 2030 has explicitly recognized the central role that rural development plays. Smallholders still dominate agricultural systems in developing countries and they are still key to food security. However, they also face long-standing barriers to accessing resources, technology, inputs, finance, knowledge and markets. As a result, smallholders lack resilience and the capacity to take advantage of emerging opportunities.
Therefore, while global economic changes offer the possibility of accessing new markets, expanded entrepreneurship and new kinds of livelihoods in the agrifood sector and beyond, at the level of individual rural women and men the risks and barriers are often still too great. Hence a transformation of rural areas is needed to enable rural people to capitalize on changes in the world around them, rather than be further marginalized by them.
A distinguishing feature of this report is that it examines rural development in the context of the transformation of rural areas and the wider economy – i.e. rural transformation and structural transformation. By embedding rural development within rural transformation, and that within structural transformation, developments in urban and rural areas can be viewed together and seen to be interconnected.
This report defines inclusive rural transformation as a process in which rising agricultural productivity, increasing marketable surpluses, expanded off-farm employment opportunities, better access to services and infrastructure, and capacity to influence policy all lead to improved rural livelihoods and inclusive growth.
Inclusive rural transformation is thus a critical component of inclusive growth as a whole, and of sustainable development in all its dimensions – social, economic and environmental. It is both a vision and a lens through which to interpret historical processes in rural areas across the world.
Thus, this report is about transformation, but not just any transformation; it is about transformation that is inclusive and that brings rural people into the economic mainstream and the benefits of the twenty-first century economy. This report is also about choices, starting with the programmatic and policy choices of governments and local, regional and global development practitioners. A key question that they must ask is, what actions can they take to stimulate and support inclusive rural transformation?
Based on extensive research, this report attempts to answer this and other questions. Among the important premises of the report is that there is no natural incentive mechanism in economic transformation processes that protects the interests of marginalized groups. Inclusive rural transformation is, therefore, far from automatic. Rather, it is a choice. It does not just happen; it must be made to happen.
Rural transformation can lead to numerous positive developments in the lives of people and their nations, such as growth in life expectancy, improvements in education, health, water and sanitation, increased rural and urban employment opportunities, and empowerment of women and minority and disadvantaged groups. But a range of political, social, economic and environmental imbalances and inequities may occur as well. Economic transformation may be inevitable, as the world changes, but inclusiveness is a choice.
Countries need to take specific actions – and make specific policy choices and investments – to enable rural people to seize the opportunities and deal with the threats that come with transformation processes. IFAD’s experience over nearly four decades has shown that when rural people can organize themselves and have reliable access to land and other natural resources, technologies, finance and markets, both their livelihoods and their communities can flourish. Inclusive rural transformation can be promoted through people-centred development in which “beneficiaries” become agents of their own development, participating in decision-making, implementation and the process of rural transformation itself.
Action is needed to address the threats facing smallholder farmers, rural small and medium enterprises, women, youth and indigenous peoples. This report seeks to provide a solid foundation upon which those actions can be based.
While rural development strategies need to be context specific, and include policy reforms, institutional innovations and investments, clearly they need to appropriately value the role of agriculture and the rural economy, and the great potential of rural people themselves as agents of inclusive transformation.
KANAYO F. NWANZE
President of IFAD