Rethinking rural programs

With more details of the 1993 agricultural census announced by the Central Bureau of Statistics, we are better apprised of the basic characteristics and the underlying causes of poverty in the rural areas.

The reports released by the bureau at a news conference yesterday, show, for example, that about 90 percent of the villages classified as poor share common problems: inadequate social services and lack of basic infrastructure such as roads, electricity, telecommunications and markets.

We can also conclude from the findings that the area of farmland owned is not crucial to the level of earnings. The census indicates that more than 90 percent of the poor villages rely mostly (80 percent) on farming for income. The rural people who have succeeded in climbing above the poverty line -- measured by monthly minimum per capita spending of Rp 18,245 (US$8.5) for food and non-food items -- are those whose livelihood depends only 50 percent on farming, with the other 50 percent coming from off-farm activities.

The census also shows that despite the high rate of urbanization, the number of poor people in the urban areas decreased from 9.4 million in 1990 to 8.7 million in 1993, while the number of poor people in the rural areas declined by a mere 600,000 to 17.2 million.

All this implies that the availability of basic social services and physical infrastructure is very crucial for enabling the people to improve their earnings. Adequate social services and infrastructure seem to enhance off-farm economic activities which have become an increasingly important source of earnings for the rural population.

What these developments mean is that some rural people seem to be creative in off-farm activities which are fundamentally ruled by market forces. They are quite different from those others in the segment of the farming sector which remains heavily regulated by the government.

These findings, we think, provide important input for formulating rural development programs, especially as the government has just embarked on a more concerted poverty-alleviation program to uplift the living conditions of the estimated 26 million people across the country still living in absolute poverty.

The characteristics and underlying causes of rural poverty make it imperative for revising the rural development programs with emphasis on the promotion of local initiatives and provision of more village-level authority to make decisions that fit local conditions. This means, for example, that the use of the Rp 20 million in seed capital allocated for each of the 20,633 poor villages during the current fiscal year should be decided by the villagers themselves and not by subdistrict chiefs or officials from the provincial capital or the home ministry in Jakarta.

Less government involvement is clearly better and more effective in enhancing public participation.

Moreover, what the poor people urgently need are not standard technical packages from Jakarta, nor market-intervention policies and subsidies, but rather economic incentives in the form of better infrastructure which will provide them with better access to the money economy and relevant information.