The toyota land cruiser is to all cars as X is to set of x. And things about Panama

Tuesday, August 28, 2007

Go Box Coffee and "The end of Povety"

Can a poor farmer grow coffee and increase his income to such a degree that he can escape extreme poverty? That is the question that I am trying to answer for myself during my Peace Corps service. What would a farmer have to do and how many hectarias of coffee would he or she have to have based on a family size to generate enough income to escape extreme poverty?

First off, what does it mean to escape extreme poverty? WHen you have enough to eat, to build a shelter, and to take care of your health.

The next step is to get out of the "poverty trap," which Jeffery Sachs defines as an economic state where your capital depriciates faster than it is accumulated. For example, with the people I work with, as they grow beans and corn on their hillsides, the rain errodes the top soil and the fertility of the land is decreased. The income from the land is not enough to invest in the farm so each year the farmer and his family are poorer than they were the year before.

The hope is that with a product like coffee, they could make enough money to invest in thier family and farm to escape the poverty trap. For example, by selling coffee, the family could have enough to buy enough food for the year, necessary medicine, and have a nice house, and on top of that send one of thier kids to school plus extra education so they might get a job. Once the son or daughter graduates, they can send back money, either to invest in the farm, or so that his or her brothers or sisters can also go to school. This way, the capital of the family, in this case the educational capital, is growing and is growing at a rate faster than other forms of capital. The family is now out of the poverty trap and is on "ladder" of economic developement, as Sachs puts it. At least that is the idea anyway. I´m working to see if it can become a reality.

1 comment:

Daniel said...

Ed, I am wondering about the nature of this poverty trap and some comments that you made about the erosion of the soil. Is the race for education capital being run against the land?

Clearly diminishing returns off of the farm because of erosion would be a terrible burden. what is the general effect of growing coffee on the land? i ask this question for all those liberal folks loving their 'sustainable' coffee in the morning.

also could you comment on the possibilities of education? as you indicate that is the way out of poverty. is it sending children off to boarding school and then hoping that they stay in the city to work?

Daniel

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