# **1. Introduction**

Rural poverty in Mexico is a subject of widespread interest. This is true within Mexico itself, but also in the broad American context as the rural population, for example, migrate and export their produce. There are some 25 million people in rural areas in Mexico, most of which are poor. The countryside has the greatest degree of poverty in Mexico, as is the case in most Latin American countries. Poverty in rural Mexico is not homogeneous, neither across time, regions nor across sectors, such as agricultural and off-farm sectors. Poverty is endemic in rural Mexico and affects particularly vulnerable groups, such as the indigenous populations.

Monetary extreme poverty affected 42 percent of the people in dispersed rural areas (localities with less than 2,500 inhabitants) and 21 percent in semi-urban rural areas (localities with less than 15,000 inhabitants) in 2002, slightly less than one decade earlier. Most of the rural poor (10.4 million) live in dispersed rural areas and some of the poor live in semi-urban areas (2.8 million). This translates into 13.2 million rural people living in poverty in rural Mexico with less than 15,000 inhabitants. It is disproportionately a feature of households with a head whose main job is in the agricultural sector, whether as a self-employed farmer or rural laborer, and has at most primary education. However, the incidence of extreme rural poverty has declined since 1996 but at a slower pace than the decline in urban poverty.<sup>2</sup> Hence, the rural-urban poverty-gap increased in recent years and in some places extreme rural poverty is at least four times higher than in urban areas. Moreover, not only is the income gap to urban areas increasing but the gap between richer and poorer segments of the population in the rural areas is also growing. Finally, the gap between rich and poor regions is still large, such as between the North and South regions.

This paper attempts to analyze rural monetary poverty. Two definitions of rural areas are used: _first,_ localities with more than 2,500 and less than15,000 inhabitants refers to semi-urban areas; and, _second_ , dispersed rural areas refers to localities with less than 2,500 in habitants (the official definition of rural in Mexico). The analyses are based on national household surveys ( _Encuesta nacional de Ingresos y Gastos de los Hogares-_ ENIGH) from 1992 to 2002.

The paper is organized in 6 sections. Section 2 presents demographics and their changes during 1970-2000 in terms of rural and urban population size. Furthermore, it shows the recent growth pattern for Mexico and its regions. Section 3 analyzes rural poverty and its depth during 1992-2002 and Section 4 shows the rural Mexican poverty profile. Section 5 presents analyses of determinants of poverty, important factors to

> 2 The _Secretaria de Desarrollo Social_ (SEDESOL) uses three poverty lines: a “food-based” poverty line (income required to acquire enough food to cover nutritional needs); a “human needs” poverty line which includes also the income required to acquire basic education, health, housing, dress, footwear, and transportation; and an “assets-based” poverty line, which also includes other needs. The latter corresponds to the usual broad definition of “poverty”, which we call “moderate poverty’, while the former corresponds to the usual definition of “extreme poverty”.

1