Rural household sources of income, livelihoods strategies and institutional constraints in different commodity contexts - Institutional Constraints to Small Farmer Development in Southern Africa - page 35

provide 15.4% and 12.3% of total household income for Guquka and Koloni, respectively,
with the rest of the income being derived from non-farm sources and transfers. Kirsten
and Moldenhauer (2001) report almost similar results, finding that almost 76.8% of total
income received by rural households in the former homelands in 1997 was from non-
farm sources with farm income contributing only 23.2% of total income (Kirsten and
Moldenhauer, 2001).

This situation is not peculiar to South Africa. Selected studies in other countries in Africa
reflect a similar pattern. Based on a nationally-representative household budget survey in
Egypt, Adams (1999) found that agricultural income accounts for less than one-quarter
(26.6%) of total rural household income with non-farm income accounting for 42.2%. The
above statistics are quite revealing about typical African rural economy. Barrett et al. (2001)
also found an average of 42.2% for Africa as a whole, 42.2% of household income in rural
areas is from non-farm sources. Similar results were also found in Bangladesh by Nargis and
Hossain (2006). Income patterns recorded in Bangladesh were not only among the landless;
landholders equally depend on non-farm income to supplement their agricultural earnings.

Table 2.2 provides regional data on the share of non-farm income to total household
income. The table presents a summary of the proportion of income derived from non-farm
activities by households from the three continents, Africa, Asia and Latin America.

Besides providing a higher share of rural households' income, non-farm activities are sources
of rural income growth. Findings by Fraser et al. (2003) suggest that income derived from
non-farm sources by rural communities represents a substantial and sometimes growing
share. In their studies on growth in rural households' income in Bangladesh over the period
of 1988-2004, Nargis and Hossain (2006) attributed most of the growth in income to
widespread diversification into non-farm activities. Income increase during the period was
a factor of occupational shift into the non-farm sector with trade, business and service
provision topping the list. Rural income pattern is therefore not static but growing in favour
of non-farm employment.

Table 2.2. Proportion of income from non-farm activities according to region.

Area Proportion of income

from non-farm activities

Sources

Africa 40-45% Holden et al. , 2004; Barrett et al. , 2001; AllAfrica.com, 2007; Escobal, 2001

Asia 30-40% Onchan, 2001; De Janvry et al. , 2005; Escobal, 2001

Latin America 40-50% Escobal, 2001; Sanchez, 2005; De Janvry and Sadoulet, 2001; Deininger and

Olinto, 2001