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Transforming the rural nonfarm economy: Opportunities and threats in the developing world


  • Haggblade, Steven
  • Hazell, Peter B. R.
  • Reardon, Thomas


"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. Long neglected by policymakers, the rural nonfarm economy has attracted considerable attention in recent years. In poor agrarian countries struggling with growing numbers of marginal farmers and lackluster agricultural performance, such as those in much of Africa, policymakers view the rural nonfarm economy as a potential alternative to agriculture for stimulating rural income growth. In countries whose economies are successfully shifting from agriculture to other sectors, policymakers see the rural nonfarm economy as a sector that can productively absorb the many agricultural workers and small farmers being squeezed out of agriculture by increasingly commercialized and capitalintensive modes of farming. Given frequently low capital requirements in the nonfarm economy, policymakers in both settings view the rural nonfarm economy as offering a potential pathway out of poverty for many of their rural poor. Expectations everywhere are high. How realistic are these expectations? Can the rural nonfarm economy indeed grow rapidly enough to productively absorb a growing rural labor force? And in doing so, can it, in fact, provide a pathway out of poverty for the rural poor? A recent book published for IFPRI by Johns Hopkins University Press and Oxford University Press in India, Transforming the Rural Nonfarm Economy: Opportunities and Threats in the Developing World, marshals empirical evidence from around the globe to explore these key policy questions. The book, edited by Steven Haggblade, Peter B. R. Hazell, and Thomas Reardon, examines key factors affecting growth and equity in the rural nonfarm economy in order to identify settings and policies that favor rural nonfarm growth and enable the poor to participate in growing segments of the evolving rural nonfarm economy." from text

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  • Haggblade, Steven & Hazell, Peter B. R. & Reardon, Thomas, 2009. "Transforming the rural nonfarm economy: Opportunities and threats in the developing world," Issue briefs 58, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:issbrf:58

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    References listed on IDEAS

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    1. Christiaensen, Luc & Pan,Lei & Wang, Sangui, 2010. "Drivers of Poverty Reduction in Lagging Regions: Evidence from Rural Western China," WIDER Working Paper Series 035, World Institute for Development Economic Research (UNU-WIDER).
    2. Loayza, Norman V. & Olaberría, Eduardo & Rigolini, Jamele & Christiaensen, Luc, 2012. "Natural Disasters and Growth: Going Beyond the Averages," World Development, Elsevier, vol. 40(7), pages 1317-1336.
    3. Gibson, John & Olivia, Susan, 2010. "The Effect of Infrastructure Access and Quality on Non-Farm Enterprises in Rural Indonesia," World Development, Elsevier, vol. 38(5), pages 717-726, May.
    4. Fritzsch, Jana, 2011. "A Composite Fuzzy Indicator for Assessing Farm Household Potential for Non-farm Income Diversification," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114349, European Association of Agricultural Economists.
    5. Christiaensen, Luc & Demery, Lionel & Kuhl, Jesper, 2011. "The (evolving) role of agriculture in poverty reduction--An empirical perspective," Journal of Development Economics, Elsevier, vol. 96(2), pages 239-254, November.
    6. Akramov, Kamiljon T. & Shreedhar, Ganga, 2012. "Economic development, external shocks, and food security in Tajikistan:," IFPRI discussion papers 1163, International Food Policy Research Institute (IFPRI).
    7. Michael R. Cabalfin & Josef T. Yap, 2008. "Sustainable Development Framework for Local Governance," Governance Working Papers 22619, East Asian Bureau of Economic Research.
    8. Christiaensen, Luc & Todo, Yasuyuki, 2014. "Poverty Reduction During the Rural–Urban Transformation – The Role of the Missing Middle," World Development, Elsevier, vol. 63(C), pages 43-58.
    9. Nakasone, Eduardo, 2011. "The impact of land titling on labor allocation: Evidence from rural Peru," IFPRI discussion papers 1111, International Food Policy Research Institute (IFPRI).
    10. Olivia, Susan & Gibson, John, 2008. "The Effect of Infrastructure Access and Quality on Non-farm Employment and Income in Rural Indonesia," 2009 Conference, August 16-22, 2009, Beijing, China 49919, International Association of Agricultural Economists.
    11. Moss, Charles & Oehmke, James & Mbaye, Samba, 2015. "Marketing Channels, Wages and Employment: Wula Nafaa in Senegal," 2015 Conference, August 9-14, 2015, Milan, Italy 212476, International Association of Agricultural Economists.
    12. Luca Tiberti & Marco Tiberti, 2015. "Rural Policies, Price Change and Poverty in Tanzania: An Agricultural Household Model-Based Assessment," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 24(2), pages 193-229.
    13. Ayele, Gezahegn & Moorman, Lisa & Wamisho, Kassu & Zhang, Xiaobo, 2010. "Infrastructure and cluster development," IFPRI discussion papers 980, International Food Policy Research Institute (IFPRI).
    14. Mather, David & Boughton, Duncan & Jayne, Thomas S., 2011. "Smallholder Heterogeneity and Maize Market Participation in Southern and Eastern Africa: Implications for Investment Strategies to Increase Marketed Food Staple Supply," Food Security International Development Working Papers 118473, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    15. Dil Bahadur Rahut Chhetri & Pradyot Ranjan Jena & Akhter Ali & Bhagirath Behera & Nar Bahadur Chhetri, 2015. "Rural Nonfarm Employment, Income, and Inequality: Evidence from Bhutan," Asian Development Review, MIT Press, vol. 32(2), pages 65-94, September.
    16. Bezu, Sosina & Barrett, Christopher B. & Holden, Stein T., 2012. "Does the Nonfarm Economy Offer Pathways for Upward Mobility? Evidence from a Panel Data Study in Ethiopia," World Development, Elsevier, vol. 40(8), pages 1634-1646.
    17. Loening, Josef & Mikael Imru, Laketch, 2009. "Ethiopia: Diversifying the Rural Economy. An Assessment of the Investment Climate for Small and Informal Enterprises," MPRA Paper 23278, University Library of Munich, Germany.
    18. Ali, Merima & Peerlings, Jack H.M., 2011. "Farm Households Entry and Exit Into and From Non-farm Enterprises in Rural Ethiopia: Does Clustering Play a Role?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114220, European Association of Agricultural Economists.
    19. Olale, Edward & Nazli, Hina, 2010. "The Influence of Market Barriers and Farm Income Risk on Non-Farm Income Diversification," Annual Meeting, 2010, Denver Colorado, July 25-27 60915, Canadian Agricultural Economics Society.

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    Agricultural industries Developing countries; Agriculture Economic aspects Developing countries; Developing countries Rural conditions.; Nonfarm economy;

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