The literature on transition economies devotes relatively attention to agriculture and the rural non-farm economy, despite the importance of the sector and its importance to the livelihoods of the majority of the worlds poor. This paper is part of growing volume of valuable 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 focus of this paper is on rural non-farm livelihoods in Romania. The main aim of this paper is to improve understanding of the dynamics of the RNFE in providing employment and income diversification opportunities in Romania.
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.
The radical changes that have occurred in the Romanian economy during the last decade have created new pressures on the country's rural areas. Increasing industrial unemployment generated an urban-rural migratory flow of the population. The collapse of the agri-industrial processing and industrial sector increased rural unemployment. Since 1991, land reform has also generated new relationships in rural areas, and a massive redistribution of land. However, agriculture continues to function inefficiently, and is unable to provide a decent and sustainable standard of living for most rural inhabitants. Therefore, many donors and multilateral agencies are focusing on the potential of the rural non-farm economy (RNFE) and more specifically, Non-Farm Diversification (henceforth NFD) to reduce rural underemployment. NFD through the development of the RNFE may also provide means of increasing rural incomes, assist the improved utilisation of locally available resources and promote a better standard of living for rural population through enhanced non-farm employment opportunities and growth. There are several reasons underlying the rural poor' decision to diversify: low on-farm incomes or returns on labour, the existence of a surplus of resources (land, capital, labour or knowledge), as a strategy to spread risk, or to smooth the impact of the fluctuations in a unique source of income (e.g. agriculture). The present paper relies on community-level data from a survey conducted in two Romanian Counties, Dolj and Brasov, to analyse the main determinants of NFD in rural areas. The main findings are placed in a national context and policy proposals are advanced.
Of the ten Central and Eastern European countries that have applied for membership in the European Union, Romania ranks among the largest and most impoverished. Romania represents the final challenge in the European Union's enlargement to the east, largely due to its major, but underdeveloped, agriculture and food sectors. The agriculture industry, which is a major component of the national economy, extends its pervasive influence to both Romanian social life and environment. Consequently, the transition towards a market oriented economic system will pose new obstacles for the country's farmers, processors, traders, and policymakers. While identifying the impediments that surround Romanian agriculture and its inevitable progression towards transition is a simple task, the challenges lie in recommending solutions. Through careful analysis of numerous recent studies on reform policies in the Romanian agri-food sector during its economic transition, this comprehensive examination offers perspicacious suggestions and insights on the following topics in particular: international trade, credit for agricultural development, price policies, and rural development. The conclusions reached are not only of domestic importance and application, they are also of immediate relevance for many post-socialist countries, for which the agri-food sector is a principal vehicle for rural development.
This book provides an analytical framework for studying the rural non-farm economy (RNFE) in developing countries, as well as a detailed analysis of rural inequalities and agrarian differentiation, demand constraints in the RNFE, and successes and failures of targeted programmes.; The book uses examples - mainly from Asia - to challenge the received ideas and attempts to cast the discussion in a wider context.
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).
Food problems - the efficient production or procurement of food and its appropriate distribution among members of society - are problems endemic to mankind. Yet the nature and dimensions of these problems have been changing over time. As economic systems have developed, specialization has increased; and this has led to increased interdependences of rural and urban areas, of agricultural and nonagricultural sectors, and of nations. When the International Institute for Applied Systems Analysis (IIASA) began the Food and Agriculture Program (FAP) in 1976, we started with these objectives: (1) To evaluate the nature and dimensions of the world food situation. (2) To identify the factors that affect it. (3) To suggest policy alternatives at national, regional, and global levels: (a) To alleviate current food problems. (b) To prevent food problems in the future. To realize these objectives, FAP was organized around two major tasks. The first task was directed at national policy for food and agriculture in an international situation. Here, computable general equilibrium models were developed for nearly 20 major developed and developing countries and were linked together to examine food trade, aid, capital flows, and how they affect hunger, in addition to the effects of national government policies, which were also considered in detail. This approach, however, needed to be complemented by another approach that dealt with food production at the farm level.
