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Rural Income Generating Activities; A Cross Country Comparison

  • Benjamin Davis

    (Agricultural and Development Economics Division, Food and Agriculture Organization)

  • Paul Winters

    (Agricultural and Development Economics Division, Food and Agriculture Organization)

  • Gero Carletto

    (Agricultural and Development Economics Division, Food and Agriculture Organization)

  • Katia Covarrubias

    (Agricultural and Development Economics Division, Food and Agriculture Organization)

  • Esteban Quinones

    (Agricultural and Development Economics Division, Food and Agriculture Organization)

  • Alberto Zezza

    (Agricultural and Development Economics Division, Food and Agriculture Organization)

  • Kostas Stamoulis

    (Agricultural and Development Economics Division, Food and Agriculture Organization)

  • Genny Bonomi

    (Agricultural and Development Economics Division, Food and Agriculture Organization)

  • Stefania DiGiuseppe

    (Agricultural and Development Economics Division, Food and Agriculture Organization)

This paper uses a newly constructed cross country database composed of comparable variables and aggregates from household surveys to examine the full range of income generating activities carried out by rural households in order to determine: 1) the relative importance of the gamut of income generating activities in general and across wealth categories; 2), the relative importance of diversification versus specialization at the household level; 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. Analysis of the RIGA cross country dataset paints a clear picture of multiple activities across rural space and diversification across rural households. This is true across countries in all four continents, though less so in the African countries included in the dataset. 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. Nevertheless, agricultural based sources of income remain critically important for rural livelihoods in all countries, both in terms of the overall share of agriculture in rural incomes as well as the large share of households that still specialize in agricultural sources of income.

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Paper provided by Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA) in its series Working Papers with number 07-16.

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Length: 68 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:fao:wpaper:0716
Contact details of provider: Postal: Agricultural Sector in Economic Development Service FAO Viale delle Terme di Caracalla 00153 Rome Italy
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  1. Reardon, Thomas & Berdegue, Julio & Escobar, German, 2001. "Rural Nonfarm Employment and Incomes in Latin America: Overview and Policy Implications," World Development, Elsevier, vol. 29(3), pages 395-409, March.
  2. Lanjouw, Peter & Shariff, Abusaleh, 2002. "Rural non farm employment in India : Access, income and poverty impact," Working Papers 81, National Council of Applied Economic Research.
  3. Alberto Isgut, 2004. "Non-farm Income and Employment in Rural Honduras: Assessing the Role of Locational Factors," Journal of Development Studies, Taylor & Francis Journals, vol. 40(3), pages 59-86.
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  7. Lanjouw, Jean O. & Lanjouw, Peter, 2001. "The rural non-farm sector: issues and evidence from developing countries," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 26(1), October.
  8. Marcel Fafchamps & Forhad Shilpi, 2003. "The spatial division of labour in Nepal," Journal of Development Studies, Taylor & Francis Journals, vol. 39(6), pages 23-66.
  9. Benjamin Davis & Marco Stampini, 2002. "Pathways Towards Prosperity in Rural Nicaragua: Why households drop in and out of poverty, and some policy suggestions on how to keep them out," Working Papers 02-12, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
  10. Elbers, Chris & Lanjouw, Peter, 2001. "Intersectoral Transfer, Growth, and Inequality in Rural Ecuador," World Development, Elsevier, vol. 29(3), pages 481-496, March.
  11. de Janvry, Alain & Sadoulet, Elisabeth & Zhu, Nong, 2005. "The role of non-farm incomes in reducing rural poverty and inequality in China," CUDARE Working Paper Series 1001, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  12. Jonathan Morduch & Terry Sicular, 2002. "Rethinking Inequality Decomposition, With Evidence from Rural China," Economic Journal, Royal Economic Society, vol. 112(476), pages 93-106, January.
  13. Reardon, Thomas & Taylor, J. Edward, 1996. "Agroclimatic shock, income inequality, and poverty: Evidence from Burkina Faso," World Development, Elsevier, vol. 24(5), pages 901-914, May.
  14. Ferreira, Francisco H. G. & Lanjouw, Peter, 2001. "Rural Nonfarm Activities and Poverty in the Brazilian Northeast," World Development, Elsevier, vol. 29(3), pages 509-528, March.
  15. Yunez-Naude, Antonio & Edward Taylor, J., 2001. "The Determinants of Nonfarm Activities and Incomes of Rural Households in Mexico, with Emphasis on Education," World Development, Elsevier, vol. 29(3), pages 561-572, March.
  16. 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.
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  25. repec:cup:cbooks:9780521029018 is not listed on IDEAS
  26. Lanjouw, Peter, 1999. "Rural Nonagricultural Employment and Poverty in Ecuador," Economic Development and Cultural Change, University of Chicago Press, vol. 48(1), pages 91-122, October.
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