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Rural economy and farm income diversification in developing countries

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  • Delgado, Christopher L.
  • Siamwalla, Ammar

Abstract

Farm-level diversification, the adoption of alternative income-generating activities by farm households, is rarely deemed an explicit objective by economists. Where agricultural transformation has occurred, markets function well and agriculture is a waning portion of overall national product, such as the rice growing regions of Southeast Asia, farm diversification might be a desirable outcome of pursuing a market liberalization objective, but is probably not an end in itself. In Sub-Saharan Africa, where these conditions often do not hold, development depends on pro-actively commercializing rural areas. African farmers tend to diversify their production activities widely to mitigate risk, but to only produce one or two exportable commodities. High transaction costs are common barriers to diversification into new export opportunities, especially for the poor and less well-informed, who tend to fall behind during times of rapid structural change. Identifying appropriate rural institutions to incorporate rural people into new export opportunities is a major priority for relevant policy research; contract farming and participatory cooperatives offer promise and merit further study.

Suggested Citation

  • Delgado, Christopher L. & Siamwalla, Ammar, 1997. "Rural economy and farm income diversification in developing countries," MTID discussion papers 20, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:mtiddp:20
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    References listed on IDEAS

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    1. repec:dgr:rugcds:cds-27 is not listed on IDEAS
    2. Rashid, Shahidur & Sharma, Manohar & Zeller, Manfred, 2002. "Micro-lending for small farmers in Bangladesh," MTID discussion papers 45, International Food Policy Research Institute (IFPRI).
    3. Minot, Nicholas, 2003. "Income Diversification And Poverty Reduction In The Northern Uplands Of Vietnam," 2003 Annual meeting, July 27-30, Montreal, Canada 22029, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Goletti, Francesco, 1999. "Agricultural diversification and rural industrialization as a strategy for rural income growth and poverty reduction in Indochina and Myanmar," MTID discussion papers 30, International Food Policy Research Institute (IFPRI).
    5. Tobgay, S., 2006. "Agriculture Diversification in Bhutan," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25409, International Association of Agricultural Economists.
    6. Van Nam, M. & Lensink, R., 2008. "Economic Development of the Mekong Delta in Vietnam," CDS Research Reports CDS-27, University of Groningen, Centre for Development Studies (CDS).
    7. Cocchi, Horacio & Bravo-Ureta, Boris E. & Quiroga, Ricardo E., 2004. "Farm Benefits And Natural Resource Projects In Honduras And El Salvador," 2004 Annual meeting, August 1-4, Denver, CO 20328, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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    Keywords

    Alternative agriculture ; exports ;

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