Journal Issue
Finance & Development, June 1979

The three tiers of “basic needs” for rural development: A discussion of some of the issues before the upcoming World Conference on Agrarian Reform and Rural Development

International Monetary Fund. External Relations Dept.
Published Date:
June 1979
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Hernán Santa Cruz

In most of the current international theory and writing on questions of rural development, a very strong emphasis is placed on direct action to alleviate poverty and satisfy the “basic needs” of the masses. This emphasis can be justified on humanitarian grounds—involving as it does the wretched living conditions of more than one third of the human race—but this justification alone is not sufficient to be effective in promoting required changes in national and international policies.

Modern history will show, I believe, that fundamental changes in the rural areas—and in rural-urban relationships—can occur only when rural people acquire the political power to force attention to their demands (rather than needs) or through a decision of the central government that a rural development strategy is the best way to achieve national goals. In the developing countries generally, the second of these alternatives seems the most likely proposition, although quite different examples will show that both have succeeded in practice.

The United States, for instance, shows the remarkable success of the first approach—the use of rural political power. Owing to the structure of the U.S. Government and legislature, which includes two senators from each state without regard to population, the predominantly rural states have had the bargaining power to maintain and steadily increase their share of the national wealth. The results of this power can be seen, for example, in the vast networks of rural electrification and roads, in the system of land grant colleges, in subsidies to rural cooperatives and credit unions, in crop price supports, and in the growth of rural industries—all are the mark of the most advanced agricultural system in the world.

More recently other countries—including Cuba in Latin America, the People’s Republic of China in Asia, and Tanzania in Africa—have provided examples of the second alternative, in which policy decisions taken by strong central governments have promoted rural development as the main strategy for national development. Each of these countries, in its own way, has achieved a fundamental transformation in the rural areas over a remarkably short span of time. Even where there was an underlying humanistic philosophy, however, there was also a clear focus on national rather than purely sectoral considerations.

The World Conference on Agrarian Reform and Rural Development will provide an opportunity for examination of these issues on three levels: the changes required in the rural sector so that it can join the mainstream of national development (social, economic, institutional, and environmental); the role of the rural sector in advancing overall national development; and the contribution and rights of the developing countries as producers and consumers within a mutually responsive and steadily expanding international economic system.

Three tiers

There are really three sets of “basic needs” for rural development—those of the rural areas and their inhabitants, those of the national societies as a whole, and those of the international system. Problems of poverty, food supply, and rural development can be solved only if all of them are recognized and embodied in national and international development policy. In this way the rural sector can be seen as a full partner in development rather than an object of obligation on “us” to help “them.”

The resolution to convene the world conference, taken at the nineteenth Biennial Conference of the Food and Agriculture Organization (FAO) held in Rome in November 1977, called on governments to consider what “institutional changes” are needed to facilitate rural development. These changes will, of course, vary from region to region and from country to country. There can be no universal formula for rural development, and neither the FAO nor the conference secretariat will propose any model. However, the various issues of agrarian reform and rural development were taken up at length in all of the FAO Regional Conferences held during 1978, and from these deliberations it is quite clear that the world meeting will focus on each of the three sets of needs—rural, national, and international.

Assuming for the sake of analysis that rural problems can be dissociated from broader considerations, what emerges is the entire list of the symptoms of under-development. In the end, however, rural development should not be seen as a package of specific needs but as a transformation of rural life and conditions. And through this transformation—combining social, economic, institutional, cultural, and environmental aspects—the rural people will be able to work toward goals they set themselves for greater social equity and productivity. These goals are not contradictory, nor can they be so within a definition of development as the development of the human person.

The first of these goals, that of social equity, has been stressed in all the regional conferences. The resolution of the Latin American Conference, as an example, includes the following: “The evaluation of the rural situation and its principal component—agriculture—presents critical and contradictory trends in many countries. On the one hand, there is the economic expansion of a small fraction of the population that has achieved significant advances in the access to natural and financial resources, in managerial capacity, in the adoption of technological innovations, and in potential benefits from opportunities on the external market; on the other, the old problems of emargination characterized, among other factors, by the lack of access of a large part of the population to productive resources, principally land, water, credit, and services, persist or are becoming more accentuated; this, in turn, maintains or renders more acute the problems of subsistence, unemployment, underemployment, and emigration, the unequal distribution of income, and the consequent deterioration of the general living conditions of the majority of the rural population and of sectors of urban population as well.”

The background papers for the Conference, based for the most part on analyses prepared by the governments themselves, clearly demonstrate that obsolete rural structures are also the major constraint to absorbing increased populations. Unemployment and underemployment, land-lessness, and migration to urban slums—all a huge waste of human resources—are traceable to structures and institutions which no longer serve social and economic needs. The analyses point to the inefficient use of land in some areas and ecological deterioration from overuse in others. They show that the opportunities afforded by modern agricultural techniques are not reaching the majority of small farmers. They show that systems of tenant farming, sharecropping, and minifundia (small, subsistence holdings) cannot motivate or provide services to small cultivators to improve their land or increase their production. And they stress that governments forming policies to overcome these problems will be forced in most countries to cope with entrenched structural and institutional barriers whose removal or reform will require a strong and sustained commitment of political will.

National policies

In reality, the rural sector can neither be diagnosed nor treated in isolation from the national system that controls it. Rural retrogression is not inherent. It reflects the historical exploitation of the periphery by the center, both nationally and internationally. The “basic needs” attack on poverty blinds the eye to this exploitation and also obscures the fact that the urban center is far more dependent on the food-producing countryside than the other way around.

The center counts on rural production to provide both food and raw materials for consumption and export, and the exports of primary products—agricultural or mineral—account for the overwhelming share of foreign exchange earnings in the developing world. Assuming a just society, the rural producers should at least be able to count on sufficient returns from this output to ensure a growth of their productivity and employment and an increase in their standard of living.

The deterioration of the rural environment and the growth of mass rural poverty is proof that rural producers do not receive this return and that the exchange between the center and the periphery as now organized is grossly unequal. It is fallacious, nationally as well as internationally, to point to “historical” prices or market forces as the reason for the inequality. Over time, no contract is valid unless it serves both sides.

Fortunately, governments are beginning to see that national development (and not only simple justice to the rural areas) demands a faster expansion of rural production and therefore the removal of anomalous constraints. This recognition is reinforced by the emerging understanding of the dangers of rural-urban migration and of the need for a more balanced distribution of population. Hence, the groundwork is now being laid for a new awareness at the center that for its own economic, social, and political good, rural development is a national necessity. This awareness is the main hope that change will occur.

International system

The parallel between the situation of the rural and urban areas at the national level and that between developing and developed societies at the international level is too clear to be denied. The same problems of unequal exchange and decapitalization apply, but with the industrialized center largely free of the obligations that are imposed on the national governments by the necessity for cohesion. It is, therefore, inevitable that the World Conference will continue the dialogue that has occupied the international community for the past several years.

Even without reference to the New International Economic Order, however, the industrial countries cannot escape the close connection between their activities and the issues that are to come before the Conference. First, the export sector of agriculture in nearly all developing countries is closely tied to transnational agribusiness corporations through direct investment, production agreements, and marketing structures. This involvement both influences and limits the options of decision making in agrarian reform and rural development, and has a special bearing on problems of land use, agricultural wages, and ecological preservation.

Second, the income from agricultural exports—and the loss of potential income owing to protectionism and the lack of access to industrialized markets—obviously determines the overall investment capacity of the countries of the periphery and their ability to increase investment in the rural areas. It is not enough to advise these countries to shift their internal investment priorities to encourage rural development. Realistically, this will only be possible on a meaningful scale within a steadily expanding income total.

Finally, returning to the basic needs of the least advantaged people within the various national societies, the conditions in the rural areas, which condemn these people to lifelong misery and frustration, constitute a basic denial of human rights. The moral obligation to alleviate their suffering is not just national but planetary. In the face of this obligation, the rich countries cannot offer a paternalistic antipoverty approach to development while continuing to block solutions to the underlying causes of human distress. Here lies the source of suspicion in the developing world of the concept of “basic needs.”

The World Conference on Agrarian Reform and Rural Development will be the fifth international meeting on questions of rural development since 1963. Moreover, nearly all the other world conferences organized under the auspices of the United Nations over the past decade have been primarily concerned with rural problems. These conferences have demonstrated that the specific issues of underdevelopment—whether environment, population, food, human settlement, employment, the rights of women, or health—are all links in the same chain, and that the people most adversely affected by the failure of the development effort are the hundreds of millions in the rural areas of the developing countries.

The resolution to convene the conference made this point expressly by calling for a “frontal attack on poverty … by a deliberate policy of integrated rural development” i.e., through institutional and structural changes at all three tiers of basic needs—in the rural areas themselves, in national policies, and in international systems. Only through a plan of action on these lines can the political will of the governments be mobilized.

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