Agro-exports and the rural resource poor in Latin America : policy options for achieving broadly based growth

Across countries and regions, these effects have been heterogeneous and at times even socially problematic in ways that could threaten the stability of emerging democratic polities. The principal findings of this study are as follows. (1) The experience of agro-export growth neither automatically nor necessarily includes disadvantaged groups and, in some cases, has affected them negatively. The challenge is to understand and learn from this heterogeneous experience; the paper puts forward policy options for attaining more broadly based agro-export growth. (2) Broadly based agro-export growth will usually require more than market liberalization and an outward-looking policy orientation. Without a more activist policy, a number of economic factors conspire against the direct participation of small-scale producers in agro-export production. While the rural poor can indirectly benefit from employment generated by agro-export growth, policy that leaves small-scale producers uncompetitive in export production is liable to witness medium-term, induced, structural changes that diminish their access to land and dampens net employment effects. (3) The policies needed to generate broadly based growth are to an extent conditional or dependent on the specific economic context in which growth is to occur. However, two policies that emerge as unambiguously important are those that improve small farmers" access to capital and to insurance. Without such policies, small farm participation in agro-export production will be nonexistent or muted at best, except in very special circumstances. In summary, people-friendly, but not market-naive, liberalization must bring back a degree of microeconomic activism if low-income agrarian economies are to follow paths of sustainable development with equity. Includes references. (Author abstract)