Importance of rural nonfarm economy
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Answer:
The rural non-farm economy is of great importance to the rural economy for its productive and employment effects, while the income it provides to rural households represents a substantial and growing share of rural incomes.
Answer:
Abstract
Increased importance of rural non-farm economy (RNFE) to the livelihoods of rural population has been reported in recent studies. The RNFE includes all income generating activities (either as a paid work or as self-employment) that are not agricultural but provide income to the rural households. The RNFE is of great importance to the rural economy for its productive and employment effects as well as for creating demands for agricultural commodities. This paper has documented the occupational patterns among rural households in semi-arid tropics (SAT) of India. It has identified various types of rural non-farm (RNF) activities and quantified the contribution of various RNF activities to employment and household income. We have studied participation behaviours of household members in non-farm employment and factors affecting the RNF activities. The study is based on household level panel data collected by ICRISAT under the Village Dynamics Studies in south Asia (VDSA) project. A total of 864 panel households covering 18 villages across six states in India (Andhra Pradesh, Gujarat, Karnataka, Madhya Pradesh Maharashtra and Telangana) are studied for four years (2009-10 to 2012-13). The study villages and sample households come from different rainfall zones representing varied infrastructural and socioeconomic conditions. Descriptive analyses are carried out for understanding the occupational pattern and contribution of RNF activities to employment and income. The Tobit model was used to know the contribution of various factors such as land ownership and tenancy, age of household head, number of household workers, dependency ratio, average education of working family members, asset ownership, etc. which are affecting the intensity of participation in RNF activities. The study has revealed significant contribution of RNF activities as a source of primary and secondary occupations, and increased importance for employment and household income. However, the extent and contribution of RNF activities varied across villages and states.
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