Non-farm Sector Research Articles

Factors influencing livelihood strategy choice and food security among youths in Mashonaland East Province, Zimbabwe

Several governments and development practitioners view youths as critical to the strategy of enhancing food and nutrition security and sustainable livelihoods in rural Africa. Despite youths being at the centre of food and nutrition security, their contribution to household food security remains understudied. The lack of such evidence has made it difficult to develop and implement effective and sustainable solutions to food insecurity and poverty in rural Africa. Thus, the study examines the factors influencing livelihood strategy choice and food security among youths in three districts of Mashonaland East Province, Zimbabwe. A total sample of 200 randomly selected youths was analysed using both descriptive and inferential statistics. The results show that agriculture was the main livelihood strategy followed by remittance dependant, self-employment, migration, and cross-border trading. In terms of remuneration, cross-border trading was found to be the most remunerative livelihood strategy followed by remittance dependant, self-employment, migration, and agriculture. The youths associated their choice of livelihood strategy with factors such as gender, age, land ownership, access to the internet, social group membership, access to credit and level of education. The study also finds food insecurity, notably severe food insecurity to be a general characteristic among the respondents. The nature of the livelihood strategy of the youths, their socioeconomic characteristics and livelihood capital were found to significantly influence household food security. The study recommends that the government implements strategies to make agriculture a sustainable livelihood option and policies to support youth in the non-farm sector should be a priority.

Women’s employment in rural Senegal: what can we learn from non-farm diversification strategies?

PurposeAs rural nonfarm activities grow in developing countries, less attention is being paid to the opportunities they may provide for women. The purpose of this study is to examine the gender-differentiated impact of nonfarm diversification strategies in rural Senegal.Design/methodology/approachThis study uses data collected from the Senegalese poverty monitoring survey and employs an instrumental variable (IV) approach and a multinomial endogenous treatment model to investigate the extent to which diversification strategies lead to improved outcomes for rural women and their households.FindingsWhile nonfarm diversification is a male-dominated livelihood strategy, rural women make the most of it, regardless of whether they diversify into low- or high-return nonfarm activities. At the individual level, diversification improves rural women’s well-being through large income-increasing effects and higher empowerment but has no effect on rural men’s well-being. At the household level, the authors find that, when only women diversify, households have lower per capita income but are less likely to be food insecure than when only men or both genders diversify.Research limitations/implicationsThis study is based on cross-sectional data, making it impossible to examine the dynamic effects of nonfarm diversification strategies on well-being outcomes.Originality/valueThis study contributes to the current literature on rural livelihood diversification. While much attention has been paid to the feminization of agriculture, remarkably little is known about the expanding role of rural women in the nonfarm sector.

Rural non-farm engagement and agriculture commercialization in Ghana

PurposeGhana's economy is largely agrarian, and the business of agriculture is dominated by smallholder farmers who are predominantly rural dwellers. As a result, efforts to lift rural farming households from poverty have been narrowed to the promotion of agricultural development to the neglect of the rural non-farm sector. However, this is fast changing in the advent of a burgeoning rural nonfarm economy and must engage the attention of policy actors. This study thus assesses the effect of non-farm participation on households' level of commercialization of agricultural crops in Ghana.Design/methodology/approachThe study applies a generalized structural equation model (GSEM) to the Ghana Living Standards Survey round 6 dataset, a stratified and nationally representative random sample of 16,772 households in 1,200 enumeration areas.FindingsThis study finds that non-farm participation increases the produce sold to output ratio. It is concluded that non-farm engagement by farmers boosts commercialization in Ghana. Thus, for the Ghanaian and similar contexts, agricultural development interventions that incorporate non-farm activities are more likely to be successful in improving livelihoods.Research limitations/implicationsThe study uses only the ratio of sales value to output value definition for commercialization and acknowledges use of multiple definitions could be superior.Originality/valueVarious empirical studies have examined the link between the farm and nonfarm sectors. This paper is original in its approach as it tackles an aspect of the subject that has been understudied, namely, an exploration of nonfarm and farm linkages from the perspective of agricultural commercialization.

Gig Economy

Gig economy is a free market system in which temporary positions are common and organisations contract with independent workers for short-term engagements Although the concept of the gig economy has been around for a long time, it has been under increasing scrutiny due to the increasing number of people who are able to access it through the Internet. Due to the technological advancements that have occurred in the past couple of years, it has become easier for people to access the gig economy. The concept of the gig economy was initially perceived as a side hustle. However, it has quickly become a trillion-dollar industry that has millions of participants. Due to the technological advancements that have occurred in the past couple of years, it has become easier for people to access the gig economy. In the modern digital world, it's becoming increasingly common for people to work remotely or from home. This trend accelerated during the 2020 COVID-19 pandemic. The gig economy can serve up to 90 million jobs in the non-farm sectors in India with a potential to add 1.25% to the GDP over the "long term". As India moves towards its stated goal of becoming a USD 5 trillion economy by 2025, the gig economy will be a major building block in bridging the income and unemployment gap.

Harnessing Demographic Dividend Before it is Lost Forever in India.

Based on the secondary data taken from Population Census, and the Employment-Unemployment Surveys and Periodic Labour Force Survey of the National Sample Survey, it is found that Indian economy is passing through a critical phase of economic development in which it is likely to lose its demographic advantage. Because, in India while about 4.5 million people wereleaving agriculture every year prior to the Covid-19 pandemic years, the non-farm sectors job was not growing adequately to accommodate the persons leaving agriculture, and the newly educated non-farm job seekers. As a result there was an upsurge in educated youth unemployment (18% and about 24 million) rate, and hence the discouraged youth labour force. On the other hand, an increase in the share (from 8.0 to 10.2%) and growth (3.0-5.1%) of elderly population put a question on the process of harnessing demographic dividend in India. Based on these findings it is argued that an integrated approach of development is necessary to boost the labour force participation of youth and overall population to boost the growth of per capita national state domestic product (NSDP) in Indian states. This could be achieved through the promotion of micro and small enterprises along with infrastructure development along with a systematic emigration and remittances policy.

Determinants of non-farm employment in Punjab: Evidence from National Sample Survey Rounds

There is growing consensus among the social scientist that for the development of rural economy, rural non-farm sector should be thriving. The present study is an attempt to study the factors enabling the rural households of Punjab to participate in the rural non-farm activities. In the present study, the household level data of National Sample Survey Organization’s employment-unemployment 50th round and 68th round is utilized. The rural households of Punjab are categorized into; self-employed, casual labourer, regular or salary earners and others in farm as well as non-farm sector. The logit regression model for both the rounds are utilised to study the factors impacting the participation as self-employed, casual labourers, and regular wage earners in rural non-farm sector. As compared to the year 1993-94, in the year 2011-12, the proportion of households earning their livelihood in rural non-farm sector has increased. Moreover, the proportion of casual labourer in rural non-farm sector has also increased. The choice of occupations among the self-employed, regular salary earners and causal labourer in the rural non-farm sector is also changing in Punjab. The factors like education, number of skilled members in the households, head’s education, household belonging to developed districts significantly impacted the choice of working in rural non-farm sector of Punjab. The study recommends that with increase in investment in education and developing the infrastructure in rural areas can develop the rural non-farm sector.

The dynamics of rural transformation, household income, and poverty reduction: Case study in North Sumatra, Indonesia

Rural transformation (RT) is a process in which the agricultural system undergoes transformation towards off-farm, commercial, and market-oriented ones. The research objective is to analyze the dynamics of rural transformation, farmer incomes, and poverty in rural areas in North Sumatra. This study used secondary data from Statistics Indonesia and analyzed using descriptive and tabular methods. The results show that the agricultural structure has shifted over the last two decades from low-value commodities (food crops) to high-value commodities. At the same time, non-farm employment opportunities also showed an increase. The development of high-value commodities and non-farm sectors has also contributed to reducing rural poverty rates. The plantation sub-sector is the highest contributor to agricultural GDP in North Sumatra and tends to increase yearly, in addition to the livestock and horticulture. The non-agricultural industry began to increase and contributed significantly to GDP. Per capita income in 2011-2020 has increased. Poverty depth and severity are still below the national average, meaning that efforts to alleviate poverty have been relatively successful to increase incomes and reduce poverty in rural areas, one of the strategies that need to be taken is to encourage the development of high-value commodities and expand non-agricultural employment opportunities in rural areas.

An Empirical Study on Rural Non-farm Employment in Developing and Urbanised Regions of Maharashtra, India

Maharashtra accounts for a meagre share of employment in the rural non-farm sector compared to the other states. There is a high degree of disparity in the socio-economic development, level of urbanisation and social infrastructure in Maharashtra, due to which there are differences in the factors affecting participation in rural non-farm employment (RNFE) across the different regions in the state. An empirical study of Kadam Wak Wasti village in the Pune district in Maharashtra reveals that rural men dominate RNFE while rural women are engaged in the farm sector. The service sector accounts for the majority of RNFE in the village. The casual nature of non-farm employment dominated the sector. The educated and skilled individuals in the village were engaged in RNFE, while most of the landless and uneducated individuals were confined to the farm sector. Agricultural labour was considered the last resort due to low wages and a lack of required skills. Thus, urbanisation and proximity to an urban area positively impact the growth of RNFE, affirming that the growth of RNFE in the developing and urbanised regions of the state is due to pull or growth-induced factors. JEL: A10, J01, J21, R10, R11

Nonfarm entrepreneurship, crop output, and household welfare in Tanzania: An exploration of transmission channels

AbstractThis study analyzes panel data from the Tanzania Living Standards Measurement Study‐Integrated Surveys on Agriculture by the World Bank to investigate the impact of nonfarm entrepreneurship as a nonfarm activity on the value of crop output and household welfare, and to explore the potential transmission channels among rural farm households. Using a dynamic panel model to address endogeneity, our results reveal that nonfarm entrepreneurship has a positive impact on the value of crop output and household welfare. Our findings suggest that income from nonfarm entrepreneurship may enhance crop output through crop production technology and credit access, and household welfare through an increase in consumption expenditure and food expenditure as potential transmission mechanisms. Policies that enhance nonfarm entrepreneurship may also reinforce crop production and the welfare of farm households and are thus imperative. We suggest that policies that boost nonfarm sector growth such as agro‐processing and agribusiness enterprise development might achieve the twin objectives simultaneously: enhancing crop production and household welfare [EconLit Citations: C33, D24, Q12, 012].

Land consolidation, rice production, and agricultural transformation: Evidence from household panel data for Vietnam

Land consolidation is important to increase the economies of scale in farming, and understanding its determinants and effects is useful for policy-makers to support rural transformation. In this paper, we examine the factors determining the voluntary participation of farm households in land consolidation and investigate its impacts on crop production costs, rural poverty, and rural transformation. Our results show that land consolidation is driven by farming efficiency. It significantly decreases land preparation and harvest costs, increases farm income, and reduces poverty. We conclude that land consolidation should be promoted to facilitate the redistribution of farm land from farmers who want to leave agriculture to those who continue to work in agriculture. The redistribution of farmland promotes agricultural transformation by reallocating labor from farm to non-farm sectors.

Socio-Economic Aspects of Rural Transformation in Punjab

The objective of this study was to examine the rural transformation in rural Punjab and India. Both Kerala and Punjab experienced top positions in rural transformation in an economic context. Nevertheless, Kerala remained at the top while Punjab witnessed an intermediate position among other states in the socio-economic context. Amritsar and Bathinda recorded a high level but Hoshiarpur's low level of rural transformation in a socio-economic context. The analysis revealed a disparity between backward and developed regions at the state and district levels that led to socio-economic inequality in the region. Hence, the rural non-farm sector is a viable option for inclusive growth.

Adoption of improved agricultural practices: Learning from off-season vegetable production in Nepal

This study examines factors that appear to contribute to farmers’ adoption and discontinuation of poly house technology for off-season vegetable production. We collected cross-sectional survey data from a sample of 151 households in Kaski district, Nepal during October 2018. The data are analyzed using Heckman’s two stage sample selection model. The study reveals that the family members report being engaged in nonfarm sector that there is an increased probability of discontinuation of poly house technology. Farmers may be diverting their labor towards nonfarm activities that result in higher returns to labor and different risks. At the same time, the results indicate that farmers who did not receive training on vegetable production were more likely to discontinue poly house technology. It was also found that increasing farmers’ engagement with marketing activities increased the likelihood of farmers to continue poly house technology and increase household income. The provision of continued technical support (e.g., training), input supply (e.g., seeds, fertilizers) and market information are essential to sustain the adopted technologies. The study sheds light on the sustainability of technology adoption by underpinning the importance of extension services for longer-term adoption. We believe that the combined effect of various technologies would be associated with sustained adoption of the improved off-season technologies. This provides a new direction to operationalize farmer-oriented policies in agricultural extension and helps in devising programs for sustained adoption of technology.

NON-FARM LIVELIHOOD DIVERSIFICATION AND SUB-SAHARAN AFRICA’S RURAL STRUCTURAL TRANSFORMATION: A REVIEW

In the past, rural households’ were generally regarded as farmers, foresters or fisher-folk that participate only marginally in non-farm activities, except when they migrate out of rural areas. Nevertheless, despite the common generalization of the rural populace, especially in the developing world, as subsistence farmers, in certain cases a substantial portion of the income that accrue to rural households’ emanates from the rural non-farm sector. Hence, while agriculture has traditionally played a key role in the economy of developing countries, of late an increasing participation of farm households in the non-farm sector has been reported. Accordingly, one phenomenon that is gaining traction in the rural development parlance is the promotion of, and support for, non-farm livelihood diversification. A pertinent question to ask is whether this rising interest in the rural non-farm sector suggests that structural transformation away from agriculture has been taking place in Sub-Saharan Africa?

PERANAN ASSET NAFKAH TERHADAP STRATEGI NAFKAH RUMAH TANGGA PETANI GUREM LAHAN KERING DI KECAMATAN CAMBA KABUPATEN MAROS

Nationally, the large number of smallholders in Indonesia with small land tenure, individual and traditional management patterns have prevented Indonesian agriculture from reaching the desired economic scale. Based on this aim of this study was to determine the livelihoods and livelihood strategies of dryland smallholders. The results show that the livelihood assets that play an important role in the livelihood strategy of smallholders are the social capital of land tenure in the form of acquisition of teseng land and sanra land (land pledge agreements) to conduct agricultural activities and implement livelihood strategies. Livelihood strategies carried out by smallholders in drylands are mostly still in the agricultural (off-farm) sector, namely the strategy of intensification of agricultural land by diversifying cropping patterns in paddy fields and land. in the dry season by planting seasonal crops on dry land. like peanuts. To maintain a year of food subsistence and increase the economic resilience of smallholders, they are implementing a dual livelihood strategy in the non-agricultural sector, such as space engineering by migrating gardening to other provinces. One of the activities of the smallholder dual income strategy is to develop a cocoa plantation and become a construction worker for a project in their village which is a non-farm sector activity. A forward-looking sustainable livelihood strategy for smallholders is through the development of intensive agroforestry diversification by planting legumes, peppers, tomatoes and ginger.

The gendered effects of droughts: Production shocks and labor response in agriculture

Climate change has increased rainfall uncertainty, leading to greater production risks in agriculture. We examine the gender-differentiated labor impacts of droughts using unique individual-level panel data for agricultural households in India over half a decade. Accounting for unobserved heterogeneity across individuals, we find that women’s workdays are 19% lower than men’s when a drought occurs, driven by the former’s lack of diversification to the non-farm sector. Women are less likely to work outside their village and migrate relative to men in response to droughts and are consequently unable to cope fully with the adverse agricultural productivity shock. We find suggestive evidence in support of social costs emanating from gender norms that constrain women’s access to non-farm work opportunities. The results highlight the gendered impact of climate shocks, potentially exacerbating extant gender gaps in the labor market.

Shocks, household consumption, and livelihood diversification: a comparative evidence from panel data in rural Thailand and Vietnam

We examine the roles of land and labor diversification in mitigating the effects of covariate and idiosyncratic shocks in the two middle-income countries Thailand and Vietnam. We use an unbalanced panel dataset of rural households obtained from five survey waves during 2007–2016 (9291 households for Thailand and 9255 households for Vietnam). We employ the System-Generalized Method of Moments estimators to control for endogeneity. Our study finds that (i) rural households in both countries are able to maintain per capita consumption in the face of idiosyncratic shocks but not covariate shocks; (ii) labor diversification in Thailand and land diversification in Vietnam are used as ex-post coping strategies against covariate shocks but their shock-mitigating roles are insignificant; and (iii) land diversification in Thailand and labor diversification in Vietnam are helpful in improving per capita consumption when households face covariate shocks. Our findings suggest that facilitating access to credit, enhancing farm mechanization, and improving road quality in Thailand as well as promoting the development of local rural nonfarm sectors in Vietnam would benefit rural households in dealing with covariate shocks.

The Effects of Revolving Funds on Milk Yields in Kenya

The study primarily aimed at determining the effects of revolving funds on milk yields among smallholder dairy farmer groups in Bomet County, Kenya. A cross-sectional quantitative data from 288 sampled dairy farmers, both the adopters and non-adopters of revolving funds was used. Propensity score matching technique was employed and the study results demonstrated that adopters of revolving funds had no significance difference with the non-adopters. This contradicts with the theory of credit access and the possible explanation could be the diversion of these funds to other non-farm sectors. Hence it is recommended that factors inhibiting maximum absorption of farm credit in the farm sectors should be considered by the policy analysts. Specifically, a policy debate of whether to give cash or farm input should be reinforced to ensure that monies set for input purchases are directed to the intended sectors.

Poverty Stories of rural households in China: The case of North Jiangsu

After decades of rapid economic growth and massive rural-to-urban migration, rural poverty in China has been largely alleviated. Existing literature has highlighted the crucial role played by non-farm employment in the rural population's escape from poverty. However, despite some engagement in non-farm employment, a huge population in rural China remains poor. Why rural households remain poor in spite of non-farm employment has not been sufficiently explored by scholars. To fill the research gap, this paper explores the underlying mechanisms of poverty among the poor rural population, based on a recent questionnaire survey (n = 2,822) conducted in rural North Jiangsu in China. Our multinomial logistic regression model and OLS regression model show that education is positively associated with the likelihood of engaging in non-farm sectors. Relatively low education attainment of working-age household members (secondary education and below) restricted the earnings from non-farm activities, reducing the likelihood of escaping poverty. Supporting higher education for their children is often a heavy burden for poor non-agricultural rural households, driving them into the poverty trap. The results also show that significant family events, such as severe illness and children's college enrollment, have kept rural households poor, even if some household members have participated in non-farm activities through migration or working in the local non-rural sector. In addition, instead of being looked after, some apparently dependent family members (the elderly) undertake agricultural activities and domestic work to support the out-migration of the labor force in poor rural households to enable household wealth accumulation. The findings suggest that policymakers should implement a series of reforms, especially regarding improvement in health insurance and education and the economic development in the local areas (incl. rural areas and nearby towns) to deal with rural poverty.

Reducing Rural Poverty Through Non-farm Job Creation in India.

Based on secondary data, this paper estimates the incidence of poverty by sectoral employment status of individuals and it explores the factors determining individual’s joint probabilities of being poor and being engaged in the non-farm sector jobs (at micro-level). It also finds the impact (at macro-level) of rural non-farm sector employment on the incidence of rural poverty, and it identifies the subsectors of the non-farm sector, which help reduce the incidence of rural poverty in India. Using bivariate probit, recursive bivariate probit regression models, it finds that individual’s human capabilities owing to better education and training and higher occupations of their head of the family significantly determine their probability of being employed in the non-farm sectors, which in turn help reduce their chance of being poor. The panel system generalized methods of moment result suggest that the provincial states of India, which have achieved higher level of non-farm sector NSDP growth along with the creation of jobs through an improved level of infrastructure (roads, railways, banking, and industries) base, have succeeded to reduce the incidence of rural poverty to substantially low levels. Based on these findings, it is argued that the incidence of rural poverty can be reduced on a sustainable basis through the development of rural manufacturing, and by promoting growth of modern service sectors like education, health, communication, real estate, and finance and insurance, along with the infrastructural development.

Employment Scenario in Indian Punjab: Some Disquieting Features

This article aims at analysing the changing dynamics of employment across sectors and sub-sectors in Punjab and explore the factors determining workforce participation. NSSO unit level data and the PLFS data have been used for the period 2004–05 to 2017–18. Besides performing trend analysis, econometric analysis was carried-out to identify the determinants of employment. Evidence reveals that the employment avenues generated by non-farm sectors (industry and services) during the reference period remained insufficient to absorb the workforce leaving agriculture sector. Thus, a massive employment loss has been observed in the recent decade, and youth in the state remained the worst sufferer. The sub-sectors that have experienced absolute decline in employment include food & other products, textile products, wood & paper, metals & plastic, electronics, electrical medical machinery in case of manufacturing sector and transport, health and education and other services in the tertiary sector. Accordingly, unemployment in Punjab in general and youth in particular reached above the national average. This article draws some implications caused by rising unemployment in the state.