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Rural nonfarm employment : a survey

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  • Lanjouw, Jean O.
  • Lanjouw, Peter

Abstract

So little is known about the rural nonfarm sector that those making policy to assist rural small-scale enterprises have done so largely"unencumbered by evidence". The Lanjouw survey of nonfarm data and policy experience attempts to correct this. Until recently, the commonly held view was that rural nonfarm employment was relatively nonproductive, producing goods and services of low quality. The rural off-farm sector was expected to wither away with development and rising incomes, and this was viewed as a positive, rather than a negative, event. A corrollary of this view was that the government need not actively worry about the sector -- or be concerned about how policies elsewhere might harm it. More recently, opinion has swung the other way, and it is increasingly argued that neglect of the sector would be mistaken. The survey highlights the positive roles that the rural nonfarm sector can play in promoting both growth and welfare. In the widespread situation of a rural workforce growing faster than the employment potential in agriculture, the nonfarm rural sector can lower unemployment and slow rural-urban migration. It is particularly useful in employing women and providing off-season incomes. The technologies used in small-scale rural manufacturing may be more appropriate and thus generate greater income from available productive inputs. What role could government play in promoting the nonfarm sector? The emphasis of government policy has been on large-scale urban industry as the main engine of growth. More recently, there has been a move toward a more"broad-based growth"approach, with greater emphasis on the development of agriculture and the rural economy. Increasingly countries have targeted project assistance schemes, for example to provide training, infrastructure, and technology to support small-scale and rural enterprises. Nonetheless, in most countries it remains true that projects to support the nonfarm rural sector are undertaken in a policy environment which is biased against this sector.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1463.

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Date of creation: 31 May 1995
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Handle: RePEc:wbk:wbrwps:1463

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Related research

Keywords: Environmental Economics&Policies; Municipal Financial Management; Economic Theory&Research; Banks&Banking Reform; Labor Policies; Environmental Economics&Policies; Economic Theory&Research; Banks&Banking Reform; Municipal Financial Management; Crops&Crop Management Systems;

References

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  1. Haggblade, Steven & Liedholm, Carl & Mead, Donald C., 1986. "The Effect of Policy and Policy Reforms on Non-Agricultural Enterprises and Employment in Developing Countries: A Review of Past Experiences," Food Security International Development Working Papers 54744, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  2. Uribe-Echevarria, F., 1991. "Small-scale manufacturing and regional industrialization : the urban and regional development perspective," ISS Working Papers - General Series 18820, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  3. Liedholm, Carl & Mead, Donald C., 1987. "Small Scale Industries in Developing Countries: Empirical Evidence and Policy Implications," Food Security International Development Papers 54062, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  4. Smyth, I., 1988. "Differentiation among petty commodity producers : the effects of a development project on handicrafts production in a Sundanese village (West Java - Indonesia)," ISS Working Papers - General Series 18886, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  5. Haggblade, Steven & Hazell, Peter B. & Brown, James, 1988. "Farm-nonfarm linkages in rural sub-Saharan Africa," Policy Research Working Paper Series 6, The World Bank.
  6. Saith, A., 1989. "Location, linkage and leakage : Malaysian rural industrialisation strategies in national perspective," ISS Working Papers - General Series 18840, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  7. Ranis, Gustav & Stewart, Frances, 1993. "Rural nonagricultural activities in development : Theory and application," Journal of Development Economics, Elsevier, vol. 40(1), pages 75-101, February.
  8. Hazell, Peter B. & Haggblade, Steven, 1990. "Rural - urban growth linkages in India," Policy Research Working Paper Series 430, The World Bank.
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  10. Anderson, Dennis & Leiserson, Mark W, 1980. "Rural Nonfarm Employment in Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 28(2), pages 227-48, January.
  11. Uribe-Echevarria, F., 1992. "Small-scale industrial development : policy and strategic issues," ISS Working Papers - General Series 18821, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
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Citations

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Cited by:
  1. Dethier, Jean-Jacques & Effenberger, Alexandra, 2012. "Agriculture and development: A brief review of the literature," Economic Systems, Elsevier, vol. 36(2), pages 175-205.
  2. Christiaensen, Luc J.M. & Todo, Yasuyuki, 2009. "Poverty Reduction during the Rural-Urban Transformation - The Role of the Missing Middle," 2009 Conference, August 16-22, 2009, Beijing, China 51467, International Association of Agricultural Economists.
  3. Nguyen Viet, Cuong, 2008. "Measuring the Impact of Cash Crops on Household Expenditure and Poverty in Rural Viet Nam," MPRA Paper 24921, University Library of Munich, Germany.
  4. Das Gupta, Monica & Grandvoinnet, Helene & Romani, Mattia, 2000. "State-community synergies in development : laying the basis for collective action," Policy Research Working Paper Series 2439, The World Bank.
  5. Ruben, Ruerd & Van den berg, Marrit, 2001. "Nonfarm Employment and Poverty Alleviation of Rural Farm Households in Honduras," World Development, Elsevier, vol. 29(3), pages 549-560, March.
  6. Das Gupta, Monica & Grandvoinnet, Helene & Romani, Mattia, 2003. "Fostering community-driven development - What role for the State?," Policy Research Working Paper Series 2969, The World Bank.
  7. Bhaumik, Sumon K. & Dimova, Ralitza & Nugent, Jeffrey B., 2006. "Pulls, Pushes and Entitlement Failures in Labor Markets: Does the State of Development Matter?," IZA Discussion Papers 2258, Institute for the Study of Labor (IZA).
  8. Dirk Bezemer & Kelvin Balcombe & Junior Davis & Iain Fraser, 2005. "Livelihoods and farm efficiency in rural Georgia," Applied Economics, Taylor & Francis Journals, vol. 37(15), pages 1737-1745.
  9. Adugna Lemi, . "The Dynamics of Income Diversification in Ethiopia: Evidence from Panel data," Working Papers 3, University of Massachusetts Boston, Economics Department.
  10. World Bank, 2003. "From Goats to Coats : Institutional Reform in Mongolia's Cashmere Sector," World Bank Other Operational Studies 14431, The World Bank.
  11. Lanjouw, Peter, 1998. "Ecuador's rural nonfarm sector as a route out of poverty," Policy Research Working Paper Series 1904, The World Bank.
  12. Ranjan, Sharad, 2006. "Occupational Diversification And Access To Rural Employment: Revisiting The Non Farm Employment Debate," MPRA Paper 7870, University Library of Munich, Germany.
  13. Pham, Hung T, 2006. "Rural Nonfarm Employment Under Trade Reform Evidence From Vietnam, 1993-2002," MPRA Paper 6476, University Library of Munich, Germany.
  14. Mundlack, Yair & Larson, Donald F. & Butzer, Rita, 2002. "Determinants of agricultural growth in Indonesia, the Philippines, and Thailand," Policy Research Working Paper Series 2803, The World Bank.
  15. G. M. Arif & Hina Nazli & Rashida Haq, 2000. "Rural Non-agriculture Employment and Poverty in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 39(4), pages 1089-1110.
  16. Kimura, Yuichi, 2011. "Knowledge Diffusion and Modernization of Rural Industrial Clusters: A Paper-manufacturing Village in Northern Vietnam," World Development, Elsevier, vol. 39(12), pages 2105-2118.
  17. Anne Booth, 2002. "The Changing Role Of Non-Farm Activities In Agricultural Households In Indonesia: Some Insights From The Agricultural Censuses," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 38(2), pages 179-200.
  18. Newman, Constance & Canagarajah, Sudharshan, 2000. "Gender, poverty, and nonfarm employment in Ghana and Uganda," Policy Research Working Paper Series 2367, The World Bank.
  19. Lopez, Ramon & Galinato, Gregmar I., 2007. "Should governments stop subsidies to private goods? Evidence from rural Latin America," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 1071-1094, June.

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