Policy Brief: Bittersweet fruits of ‘miracle growth’: Identifying poverty and labour dynamics in coffee heartlands.

The benefits of economic growth from increasingly export-led agriculture are manifold. It stimulates labour markets and production upgrades at the local level, provides foreign exchange earnings and may trigger the growth of related sectors. However, these positive improvements often have a downside. Harmful effects can include rising inequality due to unevenly distributed gains, environmental hazards and the expropriation of local landowners. In Laos and Rwanda, poverty is often the result of workers being integrated into markets on unfavourable terms, despite increasing coffee production.

Two non-monetary poverty indexes are assessed in the policy brief which facilitate the recognition of groups or individual households left behind in countries showcasing rising commercial agriculture. The Multidimensional Poverty Index (MPI) is a measure including three dimensions: Health, Education and Standard of Living. While the data collection for the index is quite resource-intensive, the results are extremely useful for policymakers. The Extreme Deprivation Index (EDI), on the other hand, assesses the ownership of important durable consumer goods of individual households and is especially useful when household data is scarce. Both indexes were tested in the main coffee-producing areas of Laos and Rwanda, two countries which have shown rapid and sustained growth over recent decades. The results highlight the key markers of rural poverty and underline the role of labour relations in mediating the link between economic growth and poverty.