 Okay, so I'm going to move to quite a different topic from what we have seen so far. And the purpose of this paper, which is basically a descriptive paper, is to understand what is the relation between land size, farm size, average farm size, agricultural productivity and labor markets, rural labor markets, and how this is going to influence rural income and the difference between rural income and urban income. This is basically what we want to do. And we are doing it for many countries, we are collecting the data for that, not collecting using the data, already existing data, so what we are going to present today is something that is very preliminary and any comments are, would be great. So let me go through some stylized facts. The first stylized fact is that in Latin America we have really high rural poverty and it's rural poverty that is quite pervasive. So we have done some estimations at the IDP and about 78% of rural poor in Latin America are chronic poor. This is such that poverty is quite persistent. And you see that across all Latin American countries that we have here, rural poverty is much higher than urban poverty. And what we want to understand is what is the role of land distribution and land average size, farm size, and how that relates to rural labor markets. And why is this important? Because when you look at the income distribution and what is the effect of this on income distribution, what you find first is that there is a large rural, urban income gap. So let's take the case, for example, of Peru here. When you have in the 10% here, 10th percentile, what we have is that the gap between rural and urban income is about two times higher for urban income. When you go to the median, it's about 1.8 times. And when you go much higher is about 2.3 times. So you do have a large rural, urban income gap. That is persistence across all the percentiles. And what we want to understand is how this contributes to income distribution in Latin America. So the first thing we do is to do an inequality decomposition, a detailed decomposition index with three of the five countries that I'm going to show today. And what we find quite surprisingly is that rural dynamics do play a large role on income inequality in Latin America. It's not only this rural, urban income gap. It is also a very important difference between incomes within rural areas. So it's not only the rural income gap. It is also the differences between rural incomes within the rural areas. And what we find is that these two things together explain about 20% of income inequality in Colombia, about 40% in Peru, and about 35% in El Salvador. So this is quite large, and it's important. So it's important to understand a bit what's going on. Another stylized fact that is important is that in Latin American countries, the agricultural employment sector is still quite large. So we do, we still have in many of our countries a large percentage of the population that is working on the agricultural sector. But these are jobs that are quite, they are informal most of the times with really low wages and informal. And what you see here as well is that something that you find in other countries as well as in other region is that as countries get more developed, the percentage of people that are working on the agricultural sector is much lower. And this is something that happens as well in Latin America. Another important thing is that as countries develop more and income per capita is higher, the average size of firms is much larger. So you see that as the real GDP per capita becomes larger, a farm size becomes larger as well. So in developed countries, you see that these farm sizes are much larger than in the countries that are less developed. So there is an emerging literature trying to understand this. Why is it that we have in developing countries and in less developed countries, smaller farm sizes? And what is the effect of this on income inequality and agricultural productivity as well? A first study of that is one by Restucha and his colleagues. And what he finds that is very interesting is that as firms get higher, farms get higher, larger, sorry, the value added per worker is much higher. So in countries where you have more developed countries, what you find is that the value added per worker, labor productivity is much higher. So in firms that are larger, labor productivity is larger as well. And what this shows is that this is significant. So what the literature of Restucha and his friends shows and his colleagues shows is that there is a large difference between the size of the farms between the developing countries and the developed countries. And these differences are as much as 34 times. And as I say, agricultural productivity, especially labor productivity, increases with firm size, farm size. And this is quite robust to many countries and to many specifications. And what he also finds that is very important is that part of this difference between the productivity between small farms and large farms is driven by policy decisions. By agricultural regulations, by farm level policies, and by other types of policies that create credit constraints for the small farms. There is another important literature that we speak to in this paper, which is much more micro, that relates the farm size with productivity, but at the very micro level. And this is some papers by Rosenweich and his colleagues as well. And what they find is that there is really a U shaped relation between farm size and productivity, productivity per hectare. What is the rationale for that? I'm going to show you in a bit, but basically what happens is that there are large transaction costs in the agricultural sector to contract to hire agricultural workers. So at the beginning, when you have smaller farm sizes, there is going to be much higher agricultural productivity. And as you increase farm size, that's going to decrease and later it's going to increase again. Let me show you some graphs for that in a bit. So what we do in this paper is basically to explore these. What is the relation between farm size and income in rural areas? And we are going to examine which are the mediating mechanisms. And we're going to concentrate basically on agricultural productivity and agricultural labor market space on this literature that I was just describing. Something that is very important, we're not going to analyze the causes of land distribution, we are going to take it as given. And then we are going to try to understand what happens with this land distribution and farm size with agricultural productivity and therefore the demand for agricultural workers. This is basically what we're going to do. And we are not going to claim any causality on what we're doing. So let me show you a couple of graphs to show you the rationale of what we're looking at in this chapter. As I say, what we have is that we are going to take all this as given. We are not going to analyze this part. And what we want to understand is how farm size is going to affect agricultural productivity and that is going to affect the demand for workers, rural wages and rural income as such. This is what we're going to try to understand. So let's go to the very micro literature, trying to understand what is the relation between farm size and productivity. Just think of a very, very small farm and we have a threshold here. Below this, you can think of a farm that is completely autarkic, okay? That is, this farm only is going to hire family workers, domestic workers. They are not going to start hiring people from labor markets. Because the farm is very small and basically they cannot hire more workers. As the farm gets larger, above that threshold, what's going to happen, sorry I did it wrong. What's going to happen is that here they are going to hire the domestic workers, okay? And what's going to happen is that there are large transaction costs from hiring people outside the labor market. So hiring workers that are not domestic workers, that are not part of the household. So as the farm gets bigger, since the cost of hiring workers is large, then the productivity is going to fall because they are not being able to hire more workers. Basically they are working with the workers they have, the members they have. After that, what we're going to find is that they can start hiring workers. And the large farms are going to be able to exploit economies of scale with mechanization. So what we're going to find is that labor productivity is going to increase again, productivity per hectare. So this is again what we're going to try to understand in this paper. This is a descriptive paper and basically one of the contributions of the paper is to start building all this information because this information is not available so far. So what we have been doing is using agricultural censuses and household surveys to try to estimate all these relations that I'm showing you. So far we have five countries. We have Colombia, Peru, Chile, Paraguay and El Salvador. And we have now access to other countries. So what I'm going to show you today is very preliminary work on these five countries that I mentioned. Before showing you the relationship between land holding size and wages and agricultural income and all those things, let me show you some other stuff. Basically what we're going to do is, as I say, we're going to use agricultural censuses to estimate land holding size, farm revenue and agricultural productivity. This is something that is not available so we need to estimate it from scratch. We have surveys for labor markets where we can have information about agricultural income, total income and agricultural wages, which is very important. And then what we're going to do is to do some correlations at the lowest subnational level that we can to estimate what is the relation between farm size and these income variables. So let me show you some preliminary results. This is something that I find very striking. This is land distribution and by a land diesel basically. And what you see is that we have a lot of very small farm sizes in Latin America. So when you go through the desiles here, what you find is that at the eighth desile, farms start being a little bit larger, six hectares on average. This is for Colombia and when you go to Peru, it's very similar. What we find for Chile and Paraguay, which are countries that are exporters, agricultural exporters, and are important here, we can see that the farm sizes are much larger. But what we see is that we have a bunch of very small farms in the first desiles. And this is something that happens in all Latin American countries. And what we want to do is and understand is what is the effect of having these farm sizes on a rural income. And this is what we find for all the five countries that we have. What I'm going to show you here, how much? Five? Okay, perfect. What I'm going to show you here is total income, agricultural income, and agricultural wages for each of the five countries that we have. And what we find for all the countries, except for El Salvador, is that as the average of land holding size increases, income is going to increase. Total agricultural income is going to increase. Total income, agricultural income, and wages, agricultural wages. So we do see a positive correlation between land holding sizes and income. Salvador, no. In Salvador, we have, this is a country with very small farm sizes and with very primitive production for most of your agricultural sector. Okay? Household. It's household income, agricultural income at the household level and wages at the individual level. Okay? When we go to Chile and to Paraguay, you can see here we have a steep relation for household income also in Paraguay. And for wages here, we have a very, for agricultural income, we have a very steep correlation, positive correlation. So really there is, what we seem to be finding is that a very strong, not very strong, but in all the countries that we have seen so far, a positive correlation between farm size and agricultural income, total household income, and wages. And we believe this is important for all the discussions about agrarian reform, for example, because one of the rationales for doing the agrarian reforms is that the small producers are the most productive ones. And what we're finding here is that this is not necessarily the case. Of course, we have to go much more into details. One of the mediating mechanisms, and this is only for Colombia, because we had access to the other senses just a few months ago, but when we do it for Colombia, what we find when we relate farm size to the value of output per worker is that the relation is quite strong. So what you see is that in departments where the farm size is larger, the productivity per worker is higher. You find it here in these two slides, defining revenue per worker in two different ways. But when we do it per hectare, we find this negative effect. So just to conclude what we find, and as we use more countries, we hope to find have more findings for this and explore a little bit more in detail. What we find is that there is a positive correlation between agricultural average farm size and total household income, agricultural income and wages for most of the countries, but for Salvador. We find as well that these dynamics play an important role on inequality, maybe for the rural sector, but also at the country level as well. So it's very important to try to understand it. And we want really to explore much more what is the relation between this productivity, agricultural productivity, average farm size and the rural labor markets. Thank you very much. I'm sorry for the initial glitches.