English - IFAD

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Rural Poverty Report 2011
Introduction
Agriculture will not be a way out of poverty for all rural people. Some smallholder
farmers – particularly those with adequate levels of assets and access to transforming
agricultural markets – certainly will be able to develop sustainable, commercialized
production systems and these will allow them to move up and work their way out of
poverty. Acquiring new land that enables them to expand their production and
marketed surplus will in many cases be part of that process. On the other hand, many
poor rural people have extremely limited, or no, access to land and markets, and they
will not be able to rely on farming in this way. Instead, they will need to seek
opportunities in the rural non-farm economy, in either wage employment or selfemployment,
that can provide them with their main route out of poverty. For youth,
many of whom aspire to move beyond agriculture, the rural non-farm economy will
be of particular importance. In most countries, the rural non-farm economy is
expected to become increasingly significant over time, as a result of expanding
agricultural production, a growing economy and the emergence of new economic
linkages between urban and rural areas. As such, the opportunities that it offers for
creating jobs and contributing to rural poverty reduction are likely to grow.
This chapter outlines the importance to rural people of the rural non-farm
economy and of migration, and identifies a number of areas where policy initiatives
are most needed to create economic opportunities in the rural non-farm economy and
reduce the attached risks for poor rural people.
The rural non-farm economy
Typically, as an economy grows and GDP per capita increases, the non-farm economy
also grows in importance within the rural economy as a whole. In agriculture-based
economies, the share of rural income derived from non-agricultural sources may be
only 20 to 30 per cent. Typically, it grows as a share of rural income as the economy
grows, and in urbanizing economies it can be as high as 60 or 70 per cent (see
figure 12). At the regional level, there is the least diversification away from agriculture
in sub-Saharan Africa, 290 while the most diversification is found in Latin America and
the Caribbean, and in the Middle East and North Africa.
Its importance to rural people
Many rural households already have a foot, and sometimes much more, in the rural
non-farm economy. In most of the RIGA countries, a majority of households
participate: in Asia and Latin America, typically between 50 and 60 per cent and in
sub-Saharan Africa, between 25 and 50 per cent. However, only 20 to 25 per cent of