Rural Income Generating Activities: A Cross Country Comparison

A widely accepted tenet of the development literature is that, in the process of structural economic transformation that accompanies economic development, the farm sector as a share of the country’s GDP will decline as a country’s GDP grows (Chenery and Syrquin, 1975). In rural areas, this implies that a shrinking agricultural sector and expanding rural non-farm (RNF) activities, as well as a changing definition of rural itself, should be viewed as likely features of economic development. The available empirical evidence unequivocally points out to the existence of a large RNF economy. While few data sources exist which allow for consistent measurement of changes in RNF income and employment over time, available information points to an increasing role for RNF activities.