Improving poor people's access to employment and income in rural areas of developing countries:
Harnessing the benefit of globalisation for the poor in rural areas calls for a competitive, market oriented production and service sector. This offers development opportunities for new enterprises. A pro-poor growth approach that is ecologically sustainable is advocated.
Between 70 and 85 % of the poor people in developing countries live in rural areas. Limited resources for agriculture, few alternative job opportunities in the countryside and the lack of modern skills of the poor rural population increase the pressure on the natural resources and frequently leave migration as the only way to escape poverty.
Many households in rural areas depend to a significant degree on income from sources outside agricultural production.
- The poorest segments of the rural population typically derive most of their income from wage labour.
- Even households primarily engaged in agricultural production depend on non-farming activities to supplement their income and to mitigate risk.
- Many non-farming economic activities are linked to agriculture, e.g. through value-adding, processing raw materials, supplying inputs and services, and using surplus labour.
The poverty reduction strategies of many governments and donor organisations acknowledge the importance of combating rural poverty. Therefore, rural economic development linked to agriculture has a high priority. The non-farming economy and agricultural production provide positive growth linkages, but they compete when it comes to labour, capital and natural resources. Availability and productivity of labour are often key factors for the emergence of a viable and sustainable non-farming rural economy.
Yet little is known about the ingredients of success, of interventions that promote rural non-farming economic development. Approaches undertaken to date include Small and Medium Enterprise (SME) development, streamlining of value-adding chains of production, vocational training, Community Based Natural Resource Management (CBNRM), investment in basic infrastructure, provision of access to markets and public goods, and preferential access to capital.
A holistic analysis and planning framework was developed by a multi-organisational working group. The Guide to Rural Economic and Enterprise Development (REED) can be combined with other approaches.
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