Since 2005, the Eastern Republic of Uruguay has experienced sustained economic growth that has transformed it into a high-income country. This economic boom, combined with the Government's targeted policies, has enabled it to made huge strides in terms of reducing poverty. The poverty rate, which had reached 34.4 per cent in 2006 fell to 12.4 per cent in 2012.
The country is a traditional exporter of agricultural commodities. It has a well-developed agro-industry and livestock sector that mainly draws on Uruguay's wealth of natural and agricultural resources.
Poverty reduction is a priority for the Government, which has implemented a range of social and economic policies to combat it and to widen social inclusion. But given that the bulk of these policies have focused on urban areas, poor rural people have felt little significant impact. There is a need for public service provision to smallholder family farmers, and particularly rural workers and other vulnerable groups among the rural population.
Since 1993, IFAD has played an important role in Uruguay's rural poverty reduction. The IFAD-funded Uruguay Rural Project (PUR) played a key part in setting up rural development institutions and policies. Among these were the General Directorate for Rural Development (DGDR), the agency responsible for implementing the country's rural development policies, and the Rural Development Round Tables (Mesas de Desarrollo Rural, MDR), a key instrument in promoting the participation of rural civil society in development. The ongoing Rural Inclusion Pilot Project (PPIR) focuses on innovations in the areas of financial inclusion, strengthening of rural organizations and smallholder access to markets, with a view to subsequent replication on a national scale.
IFAD's advocacy work in Uruguay, supported by the Regional Programme FIDA-Mercosur, has been pivotal in establishing a nationwide policy dialogue on family farming that includes government and civil society. This ongoing dialogue allows the country to promote family farming and test tools and methodologies to secure adequate public services provision to improve the livelihoods of small family farmers, rural workers and the rural poor.