Beyond the sectors an analysis of economic differentiation in rural economy

This paper analyses rural change in industrialised countries according to a long term economic perspective. From a structural point of view, the key feature of the current rural transformation is productive differentiation, that is the change in sectoral composition of the economy in rural areas due to the emergence of non-farm activities in an environment traditionally dominated by agriculture. Differentiation points out the presence of new actors in the countryside and innovative equilibria in the use of rural resources and, as a process, is at the source of a new form of productive and social organisation of the rural space, giving rise to new patterns of relations between sectors and actors (internally to the rural space) and new modes of integration of the rural world within the economic system. The emphasis on differentiation discloses the limits of conventional approaches, which consider the current rural transition as a ""renaissance"" of the countryside or, alternatively, as a by-product of the restructuring processes which occur in the global economy. In one case, the emphasis is on the conservation and re-production of rural values within a sort of idyllic vision of the country life which embodies the long lasting isolation of the farm economy; in the other, the stress is on the subordination of rural world to the global system, implicitly assuming the countryside as an economic and, at the same time, as a spatial periphery. On the contrary, differentiation shows the capacity of reaction of rural areas to structural change in the economy through intersectoral linkages, and emphasises their integration with the socioeconomic system: in a way, rural differentiation may be seen as the result of an interplay of local forces from rural areas and global forces from macro processes. Therefore, the investigation on differentiation patterns is a key to a wider comprehension of structural dynamics exerting an impact on the rural world. The new form of economic and social organisation resulting from the interplay of local and global forces gives rise to the rural economy, which may be conceptualised as a socio-spatial system characterised by sectoral differentiation and spatial localisation. In this sense, the rural economy would be a sort of new sector differing from agriculture and industry for the scope and pattern of intersectoral relations, and from the urban sector for its links with the territory and physical environment. The rural economy is the subject of our analysis, which aims to explore its socio-economic organisation and its position within an advanced economic system. The paper is organised as follows. The next section supplies the general framework for our analysis; this part is not intended to be a literature review, but rather a sort of review of relevant issues for the analysis of the link between rural change and economic growth from three complementary perspectives : the balance of the sectors in the economy and in rural areas, and the balance of functions between town and country. The second section investigates on socio-economic processes at the source of rural differentiation; in particular, we focus on three aspects of the rural change in industrialised countries: the impact of integration and adaptation of agriculture into the capitalist economic system (what we call the homologation process) on the use of agricultural resources; the dispersal of industry on rural space as a mover of local development processes involving agricultural resources; the emergence of new consumption patterns which support rural differentiation on the demand side. The third section summarises the whole argument and analyses the position of the rural economy within the capitalist economic growth. Here, we argue that rural differentiation is to be considered as an evolution of rural production relations and we show how our analysis supports this hypothesis; we also show that this conclusion does not necessarily implies that the rural economy represents a progress in life conditions in the countryside.