**2. Vicious cycle poverty theory and agropolitan mechanism**

Poverty is a system that associates certain factors and affects each other. This concept corresponds to poverty factors and turned to beginning points of the poverty vicious cycle and ultimately prevents the development process [11]. With regards to poverty, rural sectors and farming activities participation is considered as a trap of poverty for individuals. Individuals in the rural areas are engaged in low scale production activities that affected their income. This situation is described as a setback and as a barrier and a system which connects barriers and causing the poor to fall into vicious cycle. If left unattended continuously, this will cause the poor will not be able to get food, health, and education adequately. In addition, poverty will cause the poor to not being able change or raise the standard of living better than their parents. The situation is due to low income and poverty that is sustained from generation to another generation as depicted in **Figure 1** that shows the poverty vicious cycle. At individual level, vicious cycle could be initiated by the poverty faced caused by failure to meet the nutritional diet requirement. Less nutritious diet intake ultimately affects health and the ability to work. Due to health issues, individuals are not able to work efficiently, and this leads to low productivity. The situation affects their ability to raise their income and thus continue to be in a state of poverty.

Poverty faced by individuals will also affect members of the family. Due to poverty, people are not able to provide sufficient and nutritious food to members of the family, particularly children, and will inhibit their mental growth. The study [12] found the lack of nutritious food affects children's health and eventually

**Figure 1.** *Individual poverty vicious cycle. Source: [12].*

#### *Agropolitan Project: Role in Rural Development and Poverty Eradication DOI: http://dx.doi.org/10.5772/intechopen.93441*

will contribute to weakening education and contribute to the low education achievement. Failure to obtain education causes them to continue to be engaged in low-income activities and consequently remain to be in a poor situation.

Even though the Vicious Cycle Theory can explain the poverty faced by individuals is associated with poverty factors, there was some criticism of the theory. First, this theory does not explain in detail the concept of poverty and setback. Secondly, the theory does not consider the differences of poverty faced by every country, and thirdly, the theory discusses poverty in static and unchanged situation. The theory is also unable to give a detailed description on how to overcome the vicious poverty cycle.

Theoretical discussions on vicious poverty cycle shows poverty is a societal problem that involve multiple factors and difficult to overcome. However, attempts to solve it are necessary because failure to alleviate poverty will reflect bad impression on one's society and nation. Gill [13] explained that a country cannot develop because of poverty. Therefore, the efforts to alleviate individuals from poverty should be given attention. According to the Organization for Economic Co-operation and Development (OECD) in [14] explained, there are five factors that allow a person to free oneself from poverty. These involve:


Matin and Hulme [15] discussed the perspective of materialism, which indicates individual is unable to meet the basic requirements due to (i) having low income to expend and (ii) shocks applied that caused the income of individuals to fall under the poverty line. In assisting this group, the government will conduct interventions such as micro-financing programs to increase individual income subsequently overcome poverty. Poverty eradication through this approach is called "poverty reduction" as the first step to increase household income (**Figure 2**).

**Figure 2.** *Reduction of poverty is the first to raise higher revenues contents home. Source: [15].*

In other situation, if shock happens unexpectedly, the situation is just temporary because it only affects the individual's income to obtain food at a certain time. If government intervenes to help people improve their income, this approach refers to the poverty reduction as a "one-off" grant, which would reverse the household income to the previous level (**Figure 3**). Although this approach is simple, it still fails to help the poor. Consequently, there exists the need to promote an approach that emphasizes the multi-dimensional design complex programs (multi-sector and partnerships between organizations), to help the poor. Not only has it met the minimum of physical needs but also access to health, education, and other services.

Sachs [16] in his book "The End of Poverty" discusses that government intervention is important to increase the poor's individual's ability to get the poor out of the situation and able to increase savings and investment which are becoming the driving force to the accumulation of capital to move out of poverty. He said there is a correlation between economic activities, savings, capital investment, and increasing economic activities. Household uses income as a means for consumption, savings, and taxes. The government uses the tax for current spending and development expenses. Capital is generated by household savings and government expenses. Higher capital formation leads to economic growth, which in turn increases household income as a

#### **Figure 3.**

*Poverty reduction as a "one-off" grant that return household income to previous level. Source: [15].*

#### **Figure 4.**

*The Agropolitan project is a government intervention to eradicate poverty to increase income. Source: Adapted from [15].*

*Agropolitan Project: Role in Rural Development and Poverty Eradication DOI: http://dx.doi.org/10.5772/intechopen.93441*

result of income growth. Capital assistance for projects would lead to capital accumulation, economic growth, and an income increase among the household members who receive benefits from the given assistance. In the context of this study, Vicious Poverty Cycle Theory describes the poverty situation faced by the extreme poor group. The extreme poor not only lack income but also basic needs such as housing, education, health, and other amenities. This poverty will continue to be inherited by their children to the next generation. The Agropolitan project was a government intervention to eradicate poverty to increase income (**Figure 4**).

## **3. Development of Gahai Agropolitan for rural development and poverty eradication**

Agropolitan is a development alternative model which is also known as Region Klauster that was introduced in 1974 by an economist, John Friedman. Agropolitan is a development concept that prioritizes the development of much lower level and aims to improve the socio-economic community in rural area. Agropolitan development highlights network development between urban and rural areas [17–20]. Agropolitan development prioritizes on micro-planning that involves specific target group, government, local research and development (R&D), and education institutions [21]. It is an integrated development involving complete physical and institutional infrastructure as well as optimal resource utilization. Besides, the economic farming and non-farming complement agropolitan development projects as agricultural town. Economic activities in the areas of the Agropolitan project is able to contribute to the region in addition to providing opportunities for employment in off-farm and nonfarm and existing commercially available in the agropolitan area. Today, agropolitan has become the choice of several countries in planning rural development by the developing countries such as Indonesia, Nepal, and Malaysia [8, 22, 23].

Agropolitan is different when compared to conventional development models like Growth Pole Model. Conventional development model is "above to below approach" and give priority to competition than cooperation for development [24, 25]. Instead, agropolitan prioritizes planning and cooperation establishment starting from the bottom. **Table 2** shows the agropolitan difference which is also known as Region Klauster and conventional development model namely, Pole Growth Model.

The agropolitan model is also known as the Klauster Regional Model which conducts economic activities that depend on the availability of resources in the development area. The agropolitan concept encouraged the development of side economies in the project area. In terms of urbanization, agropolitan development prioritizes a horizontal (decentralized) urbanization system that has major areas and is linked to the more interior areas. In view of planning, it is decentralized in nature prioritizing on diversifying the economic sectors.

#### **3.1 Case study: development of the Agropolitan Gahai Project**

The Agropolitan project is one of the government's initiatives to eradicate poverty and also involves several districts in the state of Pahang, Malaysia. According to records, there are 11 agropolitan projects which were launched by the government under the Ministry of Rural and Regional Development (MRRD) until 2016, and Pahang have two agropolitan projects which are the Chemomoi Agropolitan Project and Gahai Agropolitan Project [10]. The implementation of Chemomoi Agropolitan still runs and ends in September 2016. While the process of development of the Gahai Agropolitan Project, Lipis, Pahang has stopped in 2012 and has shown results to participants through the income acquisition.


#### **Table 2.**

*Comparison between growth pole model and Agropolitan model.*

The selection of the Gahai Agropolitan Project, Lipis for this study is based on the following criteria:


Gahai Agropolitan Project, Lipis, Pahang encompasses the area of 238.76 hectares, which involves a total of 80 projects participants. Each participant of the project was selected from the extreme/hardcore poor group. The participants of the project were divided into two categories: 50 individuals with house placements and 30 individuals without placements. Although there are 80 registered participants of the Gahai Agropolitan Project, only 50 local participants are actively involved in economic activities and utilize the benefits of the development of economic components, physical components, and human capital components in the Gahai Agropolitan Project. While another 30% are registered participants but are not involved in economic activities, living in the Gahai Agropolitan Project area and they only receive an annual dividend from the Rubber Industry Smallholders Development Authority (RISDA). Gahai Agropolitan Project, Lipis is managed by the implementing agency, Rubber Industry Smallholders Development Authority (RISDA) which was entrusted by the Ministry of Rural and Regional Development (MRRD). The Gahai Agropolitan Project involves the development of economic, physical, and human capital components.

For the first component, economic activities involving primary and downstream activities contribute to participants' income and thus help to increase the standard

#### *Agropolitan Project: Role in Rural Development and Poverty Eradication DOI: http://dx.doi.org/10.5772/intechopen.93441*

of living. Primary economic activities refer to the participation of participants in the Well-Being Farm (Ladang Sejahtera). Presently, 232.69 hectares of Well-Being Farm are planted with 117,940 trees and have been producing incomes in the form of wages and dividends. In addition to that, there are downstream activities that can contribute to the participant's income, majority of them are from the extreme poverty group. This is evidenced by the increase in participants' income. Before joining the Gahai Agropolitan Project, participants who are from the extreme poor were with an average income of RM400 a month. After participating in the Agropolitan project, participants receive income in the form of rubber tapping wage and dividends with an average income of RM1900 per month.

As of May 2015, a total of RM400,000 has been paid to participants as "Well-Being Farm" dividends. For downstream activities, host of bird's nests are still active, which is managed by the Gahai Participants Cooperative (KOPEGA). The project involved initial cost totaling RM58,000 which was contributed by 80 agropolitan participants. The management cost for the project up till May 2015 was RM4,591 which focused on the maintenance and pest control. For bird's nest marketing, it involves the sale of products such as bird's nests and drinks. In 2014, the bird's nest project was already producing output of 8.020 kg with an average price of RM1,200 per kilogram with total income of RM6,000.

Development of physical component also includes home, basic infrastructure, amenities, and business infrastructure. This physical component was provided by the implementing agencies during the project development. Basic infrastructure covering roads in settlements, Rural Water Supply (BALB), Rural Roads (JALB), Village Road Project (PJK), and drain and good drainage system. Besides that, the Gahai Agropolitan Project participants also enjoy the convenience of amenities such as the multi-purpose hall, place of worship, playground, and much more. In addition to the basic physical development, the project development also provided business infrastructure, namely booths, workshops, kiosks, and Small and Medium Enterprises (SMEs) infrastructure.

Besides the economic and physical components development, emphasis is also given to the human capital component. This component refers to the course preparation or training for pre-placement and post-placement. For pre-placement courses, the courses were conducted before participants enter the settlement or participate in agropolitan projects. The course was attended by the head of the households (KIR), and it was for the participants' settlement only. Post-settlement course was conducted continuously after the inclusion of participants in the Agropolitan project. The course is not limited to head of households but also involve members of the house. The courses include on entrepreneurship, skills and technical, spirituality, and family well-being.

#### **3.2 Gahai Agropolitan Project participants' profile**

The analysis of this study include 50 participants of the Gahai Agropolitan Project who are actively involved in economic activities and utilize the benefits of the development of economic components, physical components, and human capital components in the Gahai Agropolitan Project. A total of 50 participants were defined as the study population. During the survey, only 45 participants of the Gahai Agropolitan Project were actively involved in providing feedback as sampling units. Despite not obtaining the entire project participants, 45 participants were sufficient to be used as a sample using simple random sampling technique. Sampling size is following to [26] if the total population is 50, a total of 44 samples are required, and for this study, it meets the number of samples to be analyzed.

**Table 3** shows the percentage information regarding the profiles of participants of the Gahai Agropolitan Project. Participants' profile shows that the majority of


#### **Table 3.**

*Research respondents.*

respondents (82.2%) are men and the remaining (17.8%) are female. The age breakdown showed participants aged between 46 and 50 years represented the highest (28.9%) followed by the participants aged between 36–40 years and 41–45 years with the same percentage (22.2%). Participants aged 56 years and over also participated but the percentage is small (11.1%). While participants aged 35 years and below are only 2.2% equivalent to one person.

In terms of education, the study shows that the majority of participants, (51.1%) successfully obtained mid-secondary level (Sijil Pelajaran Malaysia [SPM]) while 17.8% graduated with lower secondary (PMR/SRP). About 26.7% of respondents completed with only primary school education up to Primary 6. Even though the number of respondents with primary school education is quite high, most of these respondents are 50 years old and above. Regarding employment, the majority of participants (88.9%) are rubber tappers while the remaining 11.1% are employed in other types of occupation. For respondents who did not rubber tapping as main occupation, they still receive income from the rubber plantation activities which

were paid in the form of dividends for their status as project participants. These dividends contribute to their household income.
