This section deals with literatures under the following themes: Definition of rural non-farm activities, determinants of rural non-farm activities, challenges of rural non-farm activities and the contribution of rural non-farm activities to poverty reduction.
Rural non-farm activities
Junior R. Davis (2005), defines rural non-farm activities as comprising all those activities associated with wage work or self employment in income generating activities(including income in kind that are not agriculture but which generate income) including remittances etc. in rural areas. Rural non-farm activities also refers to those activities that are not primarily agriculture or forestry or fisheries but includes activities such as trade or processing of agricultural products (even if in the case of micro processing activities which take place on the farm)(Gordon Ann and Craig Catherine, 2005). Rural non-farm activities is also defined as all economic activities conducted in rural areas except agriculture, livestock rearing, fishing and hunting (Lanjouw and Lanjouw, 1995). Rural non-farm activities include agro processing, small businesses in rural areas, migration or switching from farming to commodity trading or household assets selling in response to negative circumstances (Davis and Pearce, 2001). In the context of this research, rural non-farm activities is defined as all economic activities in rural areas with the exception of agriculture( the growing of crops and the rearing of animals for sale or for consumption) which provides a source of livelihood for the rural people. Some of these activities include petty trading, food processing, craftworks, carpentry works and all other activities that are not agriculture.
Determinants of rural non-farm activities
The establishments of rural non-farm activities require very low levels of capital investment and are some are also based on locally available raw materials (G. S. Mehta, 2002). Monica Janowoki and Anna Bleahu (2003) identifies that the ethnicity and religious affiliations of a group of people influence their ability to be involved in some kind of activities. David Rider Smith (2002) reveals that social, historical as well as contemporary levels of investment being the determinants of varying levels of livelihood sources. Mariya Portyanko (2007) also identifies infrastructure as the determinant of rural non-farm employment citing that, the only infrastructural factor that affects non-farm employment is the availability of telecommunication. Access to infrastructure is a factor that affects rural non-farm employment and income and that the quality of two key types of infrastructure: road and electricity determine its success. (John Gibson and Susan Olivia, 2010). Taylor and Francis (2004), emphasizes the role of location factors in the determination of rural non-farm employment possibilities in rural Honduras. They found that while rural non-farm wage jobs are predominantly located close to urban areas, rural non-farm self employment jobs are geographically dispersed around the country depending on local motors such as a profitable agricultural activity, an important road or a tourist attraction. Martine Dirven (2004), also indicates that, location and various distances that go with it are a vital determinant of rural non-farm economy. A study by Peter Lanjouw in the Brazilian North-east revealed that education and location is an important determinant of both employment and earnings in rural non-farm activities. Others like Reardon Thomas, Julio Berdegue and German Escobar (2001), reviews the results of a number of country specific studies in Latin America and the general findings from these studies were that rural non-farm employment and income are significant parts of rural household income. The important determinants of employment in the rural non-farm sector from the study are education and access to infrastructure. Alexander Freese...
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