Project Analyzes the Complicated Factors Behind Poverty Escapes in Rural Bangladesh
The USAID-funded three-year-long Leveraging Economic Opportunities (LEO) activity carried out a case study looking at transitory poverty escapes—temporary escapes from poverty which are then followed by a return to low earnings—in rural Bangladesh. With 47.5% of the nation's population directly employed in the agriculture sector, several policies target agricultural programs as the main drivers of increases in earning and improvements in livelihoods.
A series of household-level surveys analyzed by the LEO report titled "Ensuring Escapes from Poverty are Sustained in Rural Bangladesh" identified which factors served as drivers of poverty escape and upward mobility. Although households vary in size and face a complex and diverse set of challenges and opportunities, common factors such as increased agricultural production, market access and improvements in the position of women all contributed to sustained increases in income. The rise of technologies for communication, such as phones and television, were instrumental in connecting farmers and rural families to information around livestock health and various other topics.
The drivers of downward mobility over the period of ten years from 2006 to 2016, on the other hand, signify a lack of preparedness in unexpected circumstances; especially in cases where shocks occur in short succession, earning ability is significantly disrupted. Similarly, an inability to pay off loans leaves families stuck in debt. Many farmers in rural Bangladesh earn incomes through agricultural wage labor alone due to the difficulties associated with owning their own land. Increased incomes can be achieved by sharecropping and leasing land, but those options are only available to landowners. In an attempt to identify the reasons why households fall back into impoverishment after experiencing a period of income rise, the study employs mixed methods research with data collected from 1997 to 2010 on over 1,000 households. The analysis found those able to reduce the risk of falling back into poverty took advantage of the following factors:
- Investments in household assets, such as electricity and irrigation systems, cultivable land, livestock, etc.;
- Increases in the number of earning members within the household—in most cases, where the man and woman work together;
- Households that experience sustained poverty escapes cultivate more than once a year, switch crops regularly depending on market prices, and store crops to sell them when the price is high.
The report highlights some implications the study may have for poverty alleviation approaches in rural Bangladesh, suggesting that "improving agricultural productivity and marketing therefore remains essential to prevent re-impoverishment, particularly given the dependence of non-farm activities in rural areas on the agricultural economy. Indeed, with a few exceptions (such as masonry and international migration), the majority of non-farm activities in rural areas should be viewed as agriculture-driven non-farm employment. The viability of non-farm activities in rural areas, such as small shops, very much depends on local purchasing power, itself largely a function of the success of engagement in agriculture."
To discuss and learn more about sustainable poverty escapes from LEO's Chief of Party Anna Garloch and other practitioners in the field, join us for a joint Microlinks and Agrilinks event on Thursday, September 1.