Abstract

Developed appropriately, rural non-farm economy (RNFE) will help make a relatively untroubled transition from an agrarian to an urban and industrialised economy and society. This chapter addresses four sets of issues: (a) how important is the RNFE for rural incomes and especially for the poor? (b) what affects the growth of the RNFE? (c) what policies are needed to stimulate the RNFE, and finally (d) what may be the future development of the RNFE? Agricultural growth can stimulate the local economy through links in production and, more strongly, in consumption. Increased access to cities should encourage some parts of the RNFE, but rural manufacturing is likely to decline in the face of competition from urban factories. For the RNFE, changes in policies may well see new enterprises and jobs in providing environmental services and in producing renewable energy.

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