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Abstract

This document argues that from the existing inequalities in the subsistence farming sector, there are great opportunities for this sector to grow, through policies that directly influence the richest and most dynamic part of this sector, without excluding the great number of farmers. The richest and most dynamic part of subsistence farming sector is more likely to take advantage of any intervention focused on agricultural productivity. Four factors suggesting that there could have been significant effect on poverty are emphasized: 1) the indirect effects of the highest group growth could have positive impact in whole rural economy, including households in worst conditions; 2) even the highest group in the subsistence farming sector is poor. Thus, the direct effects in this group reduce the poverty; 3) for any structural transformation of the economy, it usually takes long period of time for a country to escape from poverty, and it is always associated with progressive exit of household from agriculture to be employed in other sectors of economy. Finally, it is recognized that an improvement in access to education and healthy services, as well as the access to credit, local and international markets by the rural households plays a fundamental role in the strategy of rural development for poverty reduction. It is also recognized that more investments in infrastructure, mainly the access roads, play a fundamental role on poverty reduction.

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