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Rural nonfarm employment : a survey

  • Lanjouw, Jean O.
  • Lanjouw, Peter

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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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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  1. Hazell, Peter B. & Haggblade, Steven, 1990. "Rural - urban growth linkages in India," Policy Research Working Paper Series 430, The World Bank.
  2. Hymer, Stephen H & Resnick, Stephen, 1969. "A Model of an Agrarian Economy with Nonagricultural Activities," American Economic Review, American Economic Association, vol. 59(4), pages 493-506, Part I Se.
  3. 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.
  4. 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.
  5. Haggblade, Steven & Hazell, Peter & Brown, James, 1989. "Farm-nonfarm linkages in rural sub-Saharan Africa," World Development, Elsevier, vol. 17(8), pages 1173-1201, August.
  6. 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.
  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. Uribe-Echevarria, F., 1991. "Small-scale manufacturing and regional industrialization," ISS Working Papers - General Series 18820, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  9. 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.
  10. 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.
  11. 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.
  12. Meyer, Richard L, 1992. "Supporting Rural Non-Farm Enterprises: What Can be Learned from Donor Programs?," Philippine Journal of Development JPD 1992 Vol. XIX No. 2-e, Philippine Institute for Development Studies.
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