Key emerging and conceptual issues in the development of the rural non-farm economy in developing countries and transition economies

The rural non-farm economy (RNFE) is of interest to governments, multilateral donor organisations, non-governmental organisations (NGOs) and development practitioners because of its increasing prevalence in both developing and transition economies. In many parts of the world, the number of poor people in rural areas exceeds the capacity of agriculture to provide sustainable livelihood opportunities. Even with a decline in fertility rates and a slowing of population growth, this situation will not change significantly. Out-migration is not possible for all types of people, and urban centres cannot (or should not, for economic and social reasons) be assumed capable of providing adequate livelihood opportunities for all those unable to make a living in agriculture. For these reasons, a healthy RNFE holds out the prospect of improved livelihoods for people living in rural areas. This set of circumstances puts the spotlight on the RNFE as a potential vehicle for poverty reduction in rural areas. This paper reviews contemporary empirical and conceptual thinking on the economics of diversity, non- agricultural growth and the rural non-farm economy.