REED

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Current situation

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 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. About 20 – 60 % of the rural population's income is generated by non-farming activities or comes from transfer payments.