Structural Change and the Fall of Income Inequality in Latin America : Agricultural Development, Inter-sectoral Duality, and the Kuznets Curve

In this study we approach the recent decline in income inequality in Latin America from the perspective of structural change with a focus on the relative performance of the agricultural sector. Our focus is on the underlying forces implied by Kuznets (1965). We zoom in on the relative performance of agriculture in the development process and the rural-urban duality and pay particular attention to the last couple of decades in relation to the entire post-1950 period. We attempt to estimate empirically possible theoretical relations with regard to these patterns by posing the following basic questions: how does the resurgence of agriculture relate to the reduction of income inequality and to what extent is this an expression of Latin America moving downward on the Kuznets curve? The literature on agriculture’s relation to the recent changes of income distribution in Latin America is quite limited. For instance, in a recent ECLAC report titled “Structural change for equality” (2012), the role of agriculture is not even mentioned. By agriculture we mean both farming and agro-business that processes and transports that output. To our knowledge, this paper is the first attempt to investigate this relationship for the recent decades in the perspective of structural change in Latin America. There are strong theoretical reasons to connect agricultural development to income distribution. The closing of the rural-urban income gap reflects what Reynolds (1975) called a “dynamic” transformation of agriculture and relates to the contribution agriculture provides for overall growth of the economy. In addition, the elasticity of poverty reduction with respect to growth is estimated to be stronger when growth emanates in the agricultural sector (Ravallion and Chen 2007, de Janvry and Sadoulet 2009). Productivity growth in the lagging sector should also contribute to sectoral labor productivity to convergence and thus helps to reduce inequality (Timmer 1988). For these reasons, the resurgence of agriculture driven partly by improving commodity prices should be given due attention when assessing the decline in income inequality in Latin America. According to the logic of the Kuznets curve, the hypothesized “turning point” of the inverted U-curve is generated by a reduction of income inequality in one or both of the sectors and/or a reduction of the rural-urban income gap as the weight of the agricultural sector diminishes, and the income per capita gap between them declines. We find that the recent decline in income inequality is related to the recent resurgence of Latin American agriculture, and, by inference, its lack of decline across most of the 20th century must be related to a lack of productivity change in agriculture. We provide estimates showing that during the recent decades inter-sectoral duality has been reduced by agricultural productivity growth. The duality expressed as an inter-sectoral Gini shows the shape of an inverted U-curve and as such the closing of the rural-urban income gap corroborates with the theoretical expectations postulated by Kuznets. The wider implication of the study is, however, that with slower growth in agricultural labor productivity, continuing improvement in the income distribution becomes more difficult. In the absence of strong manufacturing growth, agriculture might be able to reduce income inequality further if agro-industries remain unskilled labor intensive, thus raising the opportunity cost of unskilled workers. On the other hand, the traditional service sector has perhaps become the “new agricultural sector” in terms of productivity and labor surplus. In other words, the source of the remaining dualism does not come only from rural areas, but also from urban areas

Paratuberculosis in Latin America: a systematic review

Latin America is the definition of the American group, where languages of Latin origin are spoken, including countries in South, Central, and North America. Paratuberculosis is a gastrointestinal contagious chronic disease that affects ruminants, whose etiological agent is the bacilli Mycobacterium avium subsp. paratuberculosis (MAP). Paratuberculosis is characterized by intermittent diarrhea, decreased milk production, dehydration, and progressive weight loss and is possibly involved in Crohn’s disease, a human intestinal disease. MAP is resistant to environmental factors, pasteurization, and water disinfection, which coupled with the subclinical-clinical nature of the disease, and makes paratuberculosis a relevant socioeconomic and public health issue, justifying the descriptive review of research on the disease carried out in Latin American countries. A survey of articles, published until September 2016, on the Scopus database, PubMed, Agris, and Science Direct, about detection of the agent and the disease in Latin America, without restrictions to the date of the research was performed. The keywords were as follows: “paratuberculosis,” “Mycobacterium avium subsp. paratuberculosis,” “cattle,” “milk,” “wildlife,” “goat,” “ovine,” “dairy,” and the name of each country in English. Studies found from nine of the 20 Latin America countries, 31 related to Brazil, 17 to Argentina, 14 to Chile, eight to Colombia, six to Mexico, two to Peru, two to Venezuela, and one to Panama and to Bolivia, each. The agent was detected in cattle, goats, sheep, domesticated water buffalo, and wild animals. Microbiological culture, PCR, and ELISA were the frequent techniques. The small number of studies may result in overestimation or underestimation of the real scenario