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Rural employment

ILO: 52 million people working in rural areas in Latin America and the Caribbean

Greater efforts required to improve working conditions in the countryside, a new ILO regional report on rural employment says.

Press release | 14 October 2016
© Nahuel Berger / World Bank
LIMA (ILO News) – In Latin America and the Caribbean, one out of every five workers lives in the countryside as part of a rural labour market characterized by greater vulnerable employment, less wage employment and an incidence to poverty, which is double that of urban areas, a new ILO report highlighted.

The report entitled “Working in the rural area in the XXI century” (available in Spanish) in Latin America and the Caribbean, which was presented in the capital of Colombia, offers for the first time a labour overview about the reality and perspectives of rural employment in the region.

“The rural area today is not what it was 20 or 30 years ago. We see great transformations: urbanization, less young people and older adults, a reduction in agricultural employment and an increase in nonfarm occupations,” said the Regional Director of the ILO for Latin America and the Caribbean, Jose Manuel Salazar.

The report highlights that while there has been increased productivity in the countryside, there remain large differences between the employment situation in rural and urban areas. One of them is that there is more vulnerable employment in rural areas: around 56 per cent compared with 27 per cent in urban areas.

“There are 52 million rural workers, of which at least 27 million, are in a situation of vulnerable employment,” said the Regional Director of the ILO in Bogotá.

The rural sector represents the hard core of poverty, exclusion and informality in the region."

ILO Regional Director in Bogotá
“Despite the progress, there remain large gaps. The rural sector represents the hard core of poverty, exclusion and informality in the region,” he added, and to avoid major lags “public policies must redouble efforts to include workers and the self-employed in the rural labour market in a productive way.”

The report notes that unemployment in rural areas is low, because of the regional average rate of unemployment, 3.1 per cent compared with 6.9 per cent in urban areas. However, part of this situation is explained by the need to work (due to high rates of poverty) and less access to education.

“Given that in the region the greater part of labour income comes from work, it is clear that the welfare and development of rural areas depend on what happens in the labour markets, income and employment conditions,” Salazar said.

He stressed that rural areas receive a lower proportion of public and private investment, and that is one of the reasons why “there are many gaps of productive and social infrastructure between rural areas and urban areas, which in turn translates into important gaps in productivity.”

Improvement in working conditions in rural areas between 2005 and 2014

The ILO report documents a series of improvements in working conditions in rural areas between 2005 and 2014.

For example, in social security there was an increase in health insurance coverage, but still only 37 per cent of the population have it in comparison with 62 per cent in urban areas; in addition, there is a perceived increase in pension coverage systems, but only 26 per cent of people are covered in comparison with 56 per cent from cities.

In regard to labour income, the report notes that despite having grown faster than in the urban areas, by 2014 average incomes in rural areas were equivalent to 68 per cent of the labour income average in urban areas.

In addition, the rate of rural poverty of 46.2 per cent affects 60 million people, which is considerably higher than the rate of urban poverty calculated at 23.8 per cent.

Policy recommendations

The ILO presents a series of policy recommendations in the report, including productive development policies and investment in education and vocational training. Here the emphasis is on land tenure, investment in physical infrastructure, diversification and productive development with a territorial approach, and actions to connect small rural producers with worldwide supply chains.

The report also recommends training rural workers, including with skills accreditation, competency-based certificates, and training for entrepreneurs. In addition, public policies on employment should reduce their bias toward urban areas.

A second group of policies are related to work and social protection: increasingly social security coverage, compliance with minimum wage policies, formalizing employment contracts (written form), strengthening labour inspection and promoting workers’ and employers’ organizations.

The study, which includes data by country, is based on statistical information available from household surveys in 14 countries.