RURAL LIVELIHOODS: INTERPLAY BETWEEN FARM ACTIVITIES, NON-FARM ACTIVITIES AND THE RESOURCE BASE - Science for Agriculture and Rural Development in Low-income Countries - page 79

such a three-way classification allows a study of the dependence of rural households
on the local or more distant economies, (local) intersectoral linkages, rural-urban
linkages, and the importance of foreign sources of income.
Households engage in non-farm activities for various reasons. These are commonly
divided in push and pull factors. Push factors result from diversification to reduce
risk (for example because of climatic variability), diminishing factor returns,
liquidity constraints, crises and a need for self-subsistence in goods and services due
to high transaction costs. Pull factors result from opportunities created by skills or
endowments or by complementarities between activities. The latter are accumulating
strategies generating surpluses, while push factors result in coping or survival strategies
running down stocks (Start 2001). The role of non-farm activities in household live-
lihood strategies thus matters for their impact on household income. This suggests
addition of the role of non-farm activities as a fourth dimension to the classification
of Barrett et al. (2001) discussed above.
The scope for rural non-farm employment opportunities is to a large extent
determined by geographical factors. The role of geography, or, more specifically,
topology (spatial neighbourhood) in economic development is well-known, dating
back to the work of Von Thünen in 1826. Interest in the role of geography in
economic development was revived by the work of Krugman and co-workers in the
1990s (Fujita et al. 1999). The finding of these models is that urbanization arises
because of agglomeration effects (large local market, skilled workers, variety of
inputs, technological spill-overs, lower costs of infrastructure) (Lanjouw and Lanjouw
2001). These benefits of concentrating activities that are not bound to immobile
natural resources, limits the scope for developing non-farm activities in rural areas.
Immobility of natural resources results in agriculture, forestry, fishing and mining in
rural areas. Distance to urban centres plays a central role in determining the options

Table 1. Likely 'activities' in different rural zones

Remote rural areas Rural area in between Peri-urban areas

Agriculture Subsistence farming, Arable farming, livestock, Market gardening

livestock, forestry and
fishing; limited
surpluses of which only
high value items can be
sold elsewhere due to
high transport costs

forestry and fishing with
intensity and market
surpluses depending on
natural resources and
distance from urban areas

and dairying

Resource
extraction

Depending on natural
resources

Depending on natural
resources

None

Manufacturing
and services

Crafts and services for
local markets

Some crafts and services
for local markets (de-
pending on accessibility);
rural industries

Industries avoiding
congestion in city

Migration Migration Migration Daily commuting

Source: based on Wiggins and Proctor (2001) and Barrett et al. (2001).