Transforming the Rural Nonfarm Economy: Opportunities and Threats in the Developing World

Contrary to conventional wisdom that equates rural economics with agriculture, rural residents in developing countries often rely heavily on activities other than farming for their income. Indeed, nonfarm work accounts for between one-third and one-half of rural incomes in the developing world. It proves particularly important for landless and near-landless households, and among farm households it provides a critical source of cash flow for financing input purchases in agriculture. In recent years, accelerating globalization, increasing competition from large businesses, expanding urban markets for rural goods and services, and greater availability of information and communication technology have combined to expose rural nonfarm businesses to new opportunities as well as new risks. By examining these rapid changes in the rural nonfarm economy, the international experts contributing to this volume explore how the rural nonfarm economy can contribute to overall economic growth and poverty reduction in developing countries. The authors review an array of recent studies of the rural nonfarm economy in order to summarize existing empirical evidence, explore policy implications, and identify future research priorities. They examine the varied scale, structure, and composition of the rural nonfarm economy, as well as its relationship with agricultural and urban enterprises. And they address key questions about the role of public intervention in the rural non-farm economy and how the rural poor can participate in and navigate the rapid transition underway.The contributors offer new insights to specialists in rural development and to others interested in overall economic development.