Africa in general, Ethiopia in particular has not yet had a successful agricultural revolution and as a vast majority of rural population remains trapped in poverty. Given past failures in promoting agricultural development, Ethiopian policy makers and donors are looking to the rural non-farm economy as an easier option for sparking a successful rural transformation. There for, rural non-farm activities are the most gifted agricultural activities in Ethiopia. Non-farm activities consists of all (national accounts) activities that are all public and private services and public administration in rural areas of Ethiopia. In concluding it consist of a few large companies (most big agribusinesses are located in urban areas), many micro, small and medium enterprises, cooperatives, producer groups and other community-driven groups. It is a large and usually growing share (usually in excess of one-third) of the overall economy of rural areas of Ethiopia. Hence this book is paramount important by giving a clue to illustrate the existing non-farm activities practice in the various regions of the country.
The literature on transition economies devotes relatively little attention to agriculture and the rural non-farm economy, despite the importance of the sector and its relevance to the livelihoods of the majority of the world's poor. This paper is part of a growing volume of empirical work on agriculture in transition countries and especially on the topic of the rural non-farm economy and livelihood diversification among the poor. The empirical work presented in this report is primarily based on large (nation-wide) rural household surveys and other field-related research activities using a broad range of methodologies. In recent years there has been growing recognition of the role of the non-farm sector for employment, income smoothing and income generation in rural areas in the developing, developed and transition countries. However, there has been limited focus on the factors that determine people's capacity to take advantage of or to generate these opportunities. It is hypothesised that two processes are apparent: demand-pull, where rural people respond to new opportunities; and distress-push, where the poorest are driven to seek non-farm employment as a survival strategy. Sometimes these processes work together. The non-farm sector is thus vital for rural employment and incomes in situations of both stagnant and buoyant agriculture and rural economy as a whole. It is vital for Armenia and Georgia's economic growth, as the development of remunerative and sustainable non-farm employment opportunities will have important effects in terms of poverty reduction. It is also important for Romania's EU accession, currently foreseen in 2007, as the development of remunerative and sustainable non-farm employment opportunities will have important effects in terms of the use of future structural funds, regional assistance and the implementation of the Common Agricultural Policy. This research identifies the key socio-economic factors, resources, activities and constraints to rural households and enterprises in the non-farm rural economy. These data were collected at the micro-level and analysed in the context of the sustainable livelihoods framework, farm systems theory and contemporary econometric methodologies. The aim was to derive policy conclusions conducive to the development of sustainable rural livelihoods.
In most developing countries, the rural labor force is growing rapidly, but rural employment opportunities are dwindling. This paper brings together empirical evidence on the nonfarm sector and analyzes policies for its future development. It examines the linkages between the farm and nonfarm sectors and between the nonfarm sector and urban enterprises, and considers ways the government can promote rural employment.
This paper empirically investigates the role of off-farm and non-agricultural activities in Myanmar’s rural sector, based primarily on the nationally representative MLCS 2016/17. We find evidence of extensive diversification: rural households are generating about 25 percent of their income on the farm; the remaining income comes from wage labor (34 percent), non-agricultural businesses (27 percent), and about 15 percent from passive sources (remittances and others). More than half of rural households engage in non-farm activities. Despite this large participation, the non-farm sector is informal and has yet to reach its full job-creating potential. Diversification is broad-reaching, and prevalent at all levels of income; however, wealthier households participate more heavily in the non-farm sector. Land constraints, household size, education levels, and gender all appear correlated with households’ propensity to diversify. Since the start of the twin crises, we continue to see significant diversification in rural incomes and all sectors – farm and non-farm – suffering very similar income shocks.
Contrary to conventional wisdom that equates rural economies with agriculture, rural residents in developing countries often rely heavily on activities other than farming for their income. Indeed, nonfarm work accounts for between one-third and one-half of rural incomes in the developing world. In recent years, accelerating globalization, increasing competition from large businesses, expanding urban markets for rural goods and services, and greater availability of information and communication technology have combined to expose rural nonfarm businesses to new opportunities as well as new risks. By examining these rapid changes in the rural nonfarm economy, international experts explore how the rural nonfarm economy can contribute to overall economic growth in developing countries and how the poor can participate in this rapidly evolving segment of the economy. The authors review an array of recent studies of the rural nonfarm economy in order to summarize existing empirical evidence, explore policy implications, and identify future research priorities. They examine the varied scale, structure, and composition of the rural nonfarm economy, as well as its relationship with agricultural and urban enterprises. And they address key questions about the role of public intervention in the rural nonfarm economy and how the rural poor can participate in and navigate the rapid transition underway in rural areas. The contributors offer new insights to specialists in rural development and to others interested in overall economic development.
Cross country comparisons of rural income generating activities are analyzed to identify ways to design more effective and better targeted rural development policies. The full range of rural income generating activities carried out by rural households are examined, including: 1) the relative importance of the gamut of income generating activities in general and across wealth categories, both at the level of the rural economy and the rural household; 2), the relative importance of diversification versus specialization in rural income generation; 3) the relationship between key household assets and the participation in and income earned from these activities; and 4) the influence of rural income generating activities on poverty and inequality. For most countries the largest share of income stems from off farm activities, and the largest share of households have diversified sources of income. Diversification, not specialization, is the norm, although most countries show significant levels of household specialization in non-agricultural activities as well.
Papua New Guinea (PNG) is the country with the largest rural population share in the East Asia and Pacific region. In addition, PNG is affected by El Niño Southern Oscillation (ENSO) climatic events that in severe years cause significant food insecurity due to failed agricultural production. Shrinking land holdings for agricultural production due to the growing population together with climate risk motivates many rural households to explore off-farm income generating opportunities. The analysis reported on here evaluates the importance of nonfarm employment in rural areas in PNG in diversifying risk to household welfare (associated with weather shocks, crop pests and diseases, agricultural price fluctuations, etc.), in smoothing seasonal income fluctuations, and in absorbing excess labor in households with limited agricultural resources. Our study draws upon a wide-ranging literature focused on the role of nonfarm enterprises in the livelihood strategies of rural households globally, e.g., de Janvry and Sadoulet 2001; Lanjouw and Lanjouw 2001; Jayne et al. 2003; Barrett et al. 2005; Haggblade et al. 2007; Lay et al. 2008. We use data collected from rural households in PNG between May and July 2018 by the International Food Policy Research Institute (IFPRI). The survey was administered to 1,026 households in 70 communities across specific districts in East Sepik, Madang, and West Sepik provinces and in the Autonomous Region of Bougainville. Respondent households were asked detailed questions about any nonfarm enterprises (NFE) in which they were involved, including questions on ownership, labor characteristics, and income generation. We explore how engaging in an NFE affects household welfare. In doing so, we evaluate two questions: 1) What barriers to entry exist for male- versus female-owned NFEs? 2) Do the welfare effects of NFE ownership differ by the sex of the owner? Overall, we find that households with an NFE have significantly higher annual per capita consumption compared to matched households without an NFE, amounting to an average increase in the value of annual household consumption of 180 kina (PGK) per capita. In addition, households with an NFE consume approximately 9.5 grams more protein per person per day and achieve greater diversity in their diets compared to households without an NFE. We find that the positive effects of NFE ownership on welfare outcomes are largely driven by male-owned and jointly-owned (male and female) NFEs. The welfare outcomes attributable to female-owned NFEs are much smaller.
This open access book discusses the current role of smallholders in connection with food security and poverty reduction in developing countries. It addresses the opportunities they enjoy, and the constraints they face, by analysing the availability, access to and utilization of production factors. Due to the relevance of smallholder farms, enhancing their production capacities and economic and social resilience could produce positive impacts on food security and nutrition at a number of levels. In addition to the role of small farmers as food suppliers, the book considers their role as consumers and their level of nutrition security. It investigates the link between agriculture and nutrition in order to better understand how agriculture affects human health and dietary patterns. Given the importance of smallholdings, strategies to increase their productivity are essential to improving food and nutrition security, as well as food diversity.
Evidence from many low income countries over the last decade shows that the share of rural household income from non-farm sources is growing. Empirical research found that non-farm sources contribute 40-50% to average rural household income. Most of this income originates from local rural sources. Thus, non-farm rural employment is gaining prominence in debates on rural development, particularly in the sense of reducing poverty in farm households and contributing to sustainable livelihoods. Farm households have been observed to follow a multitude of strategies to prepare for and cope with different kinds of risks and thus reduce their livelihood vulnerability. As it concerns income creating strategies, they can be grouped into two categories: (i) adjusting and diversifying farm production activities and (ii) non-farm activities (on- and off-farm) such as wage- and self-employment in the same region or urban centres, implying temporary or permanent migration. In summarysing, it can be stated that diversity and sustainability of livelihoods play a key role in rural households' strategies to ensure survival under difficult ecological and economic conditions. Some common patterns can be identified: if access to farm land is a limiting factor for rural households, even low-paid jobs in the non-farm sector are of key importance to make a living. If land supply is elastic and accessible to rural households, the diversification of farm activities is followed as the main strategy to secure their livelihoods, often supplemented by some form of non-farm rural employment. In general, the farm size must surpass a critical threshold to create capacities to engage in better paid non-farm rural employment, which limits policy options to refer to non-farm rural employment as a silver bullet accessible to all social groups when fighting rural mass poverty. Also, the role of social capital assets cannot be underestimated as it paves the way for profitable forms of non-farm rural employment. This edited volume is a collection of topical papers presented at the Deutsche Tropentag (DTT) 2001 "One World - Research for a Better Quality of Life" that was held at the University of Bonn from October. 9th to 11th, 2001 in Bonn. Papers of the thematic sessions on "Conflicts, Migration and Rural Development" as well as "Poverty and Livelihood Strategies" are combined in this publication. The papers deal with the issues of non-farm rural employment for sustainable rural livelihoods. It also includes one topical paper that was presented at the 42nd Annual Conference of the Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaus (GEWISOLA) "Perspectives for the European Agricultural and Food Sector Following Eastern Enlargement", September 30 to October 2, 2002, at the Martin Luther University, Halle, Germany. The contributions in this volume on non-farm rural employment and its poverty alleviation impact on farm households and policy options contains are from six case countries (Bolivia, Brazil, Guatemala as well as Bulgaria, Kosovo, and Romania) in two distinct regions (Latin America and Central and Eastern Europe).
