The Rural Non-Farm Economy
The Rural Non-farm Economy
The nonfarm economy includes all economic activities other than production of primary agricultural commodities. Nonfarm, thus, includes mining, manufacturing, utilities, construction, commerce, transport and a full gamut of financial, personal and government services. Agroprocessing – the transformation of raw agricultural products by milling, packaging, bulking or transporting – forms a key component of the rural nonfarm economy. A broad definition of rural regions as encompassing both dispersed rural settlements as well as the functionally linked rural towns where many agroprocessing and ancillary nonfarm service and commercial activities congregate to service surrounding agricultural settlements.
Size: Policy interest in the rural nonfarm economy arises in large part because of its increasing importance as a source of income and employment across the developing world. Evidence from a wide array of rural household surveys suggests that nonfarm income accounts for about 35 percent of rural income in Africa and roughly 50 percent in Asia and Latin America. Standing roughly 20 percent higher than rural nonfarm employment shares, these income shares confirm the economic importance of part-time and seasonal nonfarm activities. Rural residents across the developing world earn a large share of their income—35–50 percent—from nonfarm activities. Agricultural households count on nonfarm earnings to diversify risk, moderate seasonal income swings, and finance agricultural input purchases, whereas landless and near-landless households everywhere depend heavily on nonfarm income for their survival. Over time, the rural nonfarm economy has grown rapidly, contributing significantly to both employment and rural income growth.
Income data, which include earnings from seasonal and part-time activity, offer a more complete picture of the scale of the RNFE.
Rural nonfarm employment holds special importance for women. Women account for about
The nonfarm economy includes all economic activities other than production of primary agricultural commodities. Nonfarm, thus, includes mining, manufacturing, utilities, construction, commerce, transport and a full gamut of financial, personal and government services. Agroprocessing – the transformation of raw agricultural products by milling, packaging, bulking or transporting – forms a key component of the rural nonfarm economy. A broad definition of rural regions as encompassing both dispersed rural settlements as well as the functionally linked rural towns where many agroprocessing and ancillary nonfarm service and commercial activities congregate to service surrounding agricultural settlements.
Size: Policy interest in the rural nonfarm economy arises in large part because of its increasing importance as a source of income and employment across the developing world. Evidence from a wide array of rural household surveys suggests that nonfarm income accounts for about 35 percent of rural income in Africa and roughly 50 percent in Asia and Latin America. Standing roughly 20 percent higher than rural nonfarm employment shares, these income shares confirm the economic importance of part-time and seasonal nonfarm activities. Rural residents across the developing world earn a large share of their income—35–50 percent—from nonfarm activities. Agricultural households count on nonfarm earnings to diversify risk, moderate seasonal income swings, and finance agricultural input purchases, whereas landless and near-landless households everywhere depend heavily on nonfarm income for their survival. Over time, the rural nonfarm economy has grown rapidly, contributing significantly to both employment and rural income growth.
Income data, which include earnings from seasonal and part-time activity, offer a more complete picture of the scale of the RNFE.
Rural nonfarm employment holds special importance for women. Women account for about