In the last decade, urban poverty in Argentina has increased dramatically. During 1992–2003, indigence poverty, measured by P0, increased by 23.8 percentage points in urban areas.<sup>12</sup> The largest increase occurred after the 2001 crises. Indigence poverty in urban areas is still very high at 28.0 percent. This translates to over 9.1 million people in urban areas who live in extreme poverty, which means that they do not have sufficient income to buy a minimum basket of food. This is almost seven times higher than the poverty rate of 4.2 percent in 1992 (see also Figure 4.1).

In Argentina, the rural population is more affected by poverty than the urban population. Since the 1980s, the rural poverty incidence is higher than the urban poverty incidence (Murmis 1996). In 2003, extreme poverty, measured by consumption, affected 30.9 percent of the rural dwellers in dispersed rural areas in Chaco, Santa Fe, Santiago del Estero, and Mendoza (Table 4.1). Applying the extreme poverty rates for these provinces to their respective regional populations yields a total of some 800,000 extreme poor living in dispersed rural areas.<sup>13</sup> Assuming as an upper bound (in the absence of reliable information on poverty in grouped areas) that extreme poverty is the same in grouped areas yields 1.2 million people living in extreme poverty in rural Argentina. It is clear that assuming poverty rates are similar in dispersed and grouped rural areas overestimates poverty in grouped rural areas as we expect P0 in grouped areas to be lower than in dispersed rural areas. Furthermore, in line with other social indicators in Argentina this shows that people in grouped areas are better off or less poor than people in dispersed rural areas. Additionally, studies from other countries such as Mexico show that poverty rates are higher in dispersed areas as compared to grouped rural or urban areas. Therefore, in reality the share of the extreme poor rural dwellers accounts for less than 1.2 million or 15 percent of Argentina’s extreme poor population. Thus, with good policies rural extreme poverty should be fairly easy to alleviate in the short-run by introducing good safety nets and making high quality service available for these people so they can build assets and skills and therefore escape poverty altogether in the medium to long run.

Geographic factors are important when analyzing poverty in Argentina. Living in a poor area can make a profound difference to well-being and life prospects. There are great differences in consumption poverty between different regions, with a not so straight gradient from south to north. In 2003, the headcount indigence rate in rural areas in Santa Fe in the Pampeana region reached 7.6 percent, nearly one-fourth of that in Santiago del Estero in the Northeast region where 29.1 percent were extremely poor. Chaco in the Northwest region experienced an extreme poverty headcount of 20.7 percent and Mendoza in the Cuyo region 26.6 percent. The latter finding may surprise the reader, but considering the fact that many agricultural workers face seasonal employment constraints the finding is less surprising. Some agricultural workers (such as those involved in the production of garlic, wine, and herbs) work four to six months per year and not continuously.

> 12The numbers used are based on calculations from the University of La Plata, CEDLA 2004 (http://www.depeco.econo.unlp.edu.ar/cedlas/monitoreo/excels/argentina/poverty/extreme_official.xls). 13 In the absence of household survey data for Patagonia, the weighted average of the poverty rate of the other regions was applied to Patagonia.

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