THE ROLE OF NON-AGRICULTURAL INCOME IN REDUCING RURAL POVERTY AND INEQUALITY IN SOUTH REGION

Abstract

In South region can be considered that the most part of farmers has more access to technology, are integrated to the agroindustries complex and their average household income are higher then the others regions farmers. Even thus, the seek to diversificate the rent, mainly of non-agricultural source, seems to be an important estrategy to increase the household income. This article analysis the role of non-agricultural income in reducing rural poverty and inequality in South region. The used data are the PNAD/IBGE microdata of 2005. The theoretical framework is related to rural labour supply, centering in the possibility of the households members to engage (or not) in multiple job offers. The econometric model is Tobit II, estimated by maximizing the log-pseudolikelihood function, being made simulation in household income to estimate the average income, the poverty and inequality level, with and without non-agricultural income. Results show that, with regard to inequality, the nonagricultural income contributes in reducing the inequality, decreasing the Gini and Theil indexes. With regard to rural poverty, using the FGT index, as much for headcount ratio (P0), how much for poverty-gap (P1) and square povertygap (P2), is observed that the non-agricultural income contribute to reducing poverty. With this information, it’s considered important to think public policies that estimulate the pluriactivity and/or the access to non-agricultural income.