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is also being experienced in many rural areas with land fragmentation,drought, groundwater scarcity, and falling agricultural commodity prices.While it is clear that increasing agricultural productivity and growth mustremain key goals for poverty reduction, it must also be recognized that asole focus on enhancing productivity growth in agriculture as a source ofpoverty reduction in rural areas is likely to be insufficient in the context ofa global economy. Not only are small farmers exposed to many new risksdue to price volatility, but also many marginal areas are unlikely to providesignificant opportunities for expansion of agricultural yields. While somemarginal areas such as the eastern Indian states may still have the agroclimaticpotential to yield high returns in agriculture because of goodrainfall, untapped groundwater, and perennial rivers, many other marginalareas do not have this potential. This points to the need to recognize that: a)other sectors such as urban areas and manufacturing may be equally if notmore important in some contexts; b) efforts to keep people within difficultand marginal areas may yield poor results. Indeed, there is some evidencethat landless laborers are better off than marginal farmers in locationswhere agriculture has become highly risky and urban labor markets haveexpanded.Huge amounts of money are currently invested in improving productivityin marginal areas – for example, in excess of a billion dollars is investedin watershed development projects in India. On the one hand, given thatthe fiscal, environmental, institutional, infrastructural, and governanceconstraints in marginal areas have shown little improvement over the yearsand are unlikely to change dramatically in the next ten to twenty years, thegoal of keeping people in rural areas seems elusive. On the other hand,well-supported rural-urban links can reduce regional inequalities throughtransferring some of the benefits of intensive agriculture, construction, andurbanization to poorer regions.174It is very likely that short-term/circular/seasonal migration will continue toincrease in India with increasing populations of young adults, a concentrationof economic growth in some locations, and persistent regional disparitiesdue to stagnation in rural areas. Although the demand for skilled laborwill probably increase in some sectors, the demand for unskilled laborwill continue to increase for informal employment in road and buildingconstruction, cable networks, and coastal activities where mechanizationcontinues to be limited despite growth.