Asset Poverty: Scope for Rural Poverty Reduction through Policy Changes

REDUCTION THROUGH POLICY CHANGES This chapter deals with various strategies to improve the asset holdings of the rural poor. In most cases, if the poor get a bigger share of asset control or benefits, efficiency and economic growth also improve. For many types of asset, reducing inequality between rural and urban areas slows down outmigration to the cities, and increases rural farm and non-farm income-earning opportunities. Well-targeted policies can reduce poverty by increasing the opportunities for poor people to gain and maintain secure access to productive assets, especially land, water and other natural resources, together with social assets such as extension services, education and basic health care. The nature of their tenure over productive assets and related factor markets has a direct bearing on the extent of lasting benefit and opportunity for the rural poor to improve their livelihoods. Assets take various forms and can be owned in various ways. Since this diversity has implications for the way assets are acquired and used sustainably, it is important to define the various meanings of ‘asset’ in the context of the rural poor (Box .). Lack of assets is an effect as well as a cause of poverty in terms of income opportunities, consumption and capability-building of people and their own institutions. The term ‘asset poverty’ indicates a vicious circle. People without assets tend to be consumption-poor because they rely mainly on selling their labour in poorly paid markets or to the landed class, have nothing to sell or mortgage in hard times, and are economically dependent and politically weak. Apart from the link between lack of assets and consumption poverty, asset disparities are huge. Rural rich-poor total asset disparity. In rural India in -, the average household in the top decile owned  times as many natural, physical and net financial assets as those in the bottom decile. The average person in the top rural decile owned almost  times as much assets as a person in the poorest: over eight times the disparity in income. Rich-poor specific disparities. In the median country of  developing countries with appropriate surveys, below half the children aged - from the poorest fifth of households were in school, as against over % in the richest fifth. In Ghana, in the richest quintile, two households