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Agriculture remains principal activity of rural people
Rural income diversification is an important way out of rural poverty
16 January 2006, Rome - Despite significant progress in income diversification of rural households, agriculture is still the principal activity of rural households in developing countries, according to a study released today by the UN Food and Agriculture Organization (FAO).

The study, covering three regions of the developing world, shows that 84 percent of rural households participate in agricultural activities and in some countries the number reaches as high as 99 percent.

However, the study also shows that rural households derive a large share of their incomes from non-farm rural activities, and these are often more remunerative. The share of money earned by rural households from such activities varies from region to region and from country to country. For more developed countries like Panama, the share of rural household income derived from non-farm activities reaches 75 percent while for Nicaragua, a lower income country, the share is 28.5 percent.

Institutional cooperation leads to improved data

The findings are the preliminary results of a joint project by FAO, the World Bank and the American University in Washington, DC. The project, known as the Rural Income Generating Activities (RIGA) project, is building a detailed database to show sources of rural income based on nationally representative household surveys. The ultimate objective is to use country-by-country analysis and cross-country evidence on rural income-generating activities to help reduce rural hunger and poverty.

Kostas Stamoulis of FAO’s Agricultural and Development Economics Division and one of the project’s coordinators said, “Before one jumps to quick conclusions regarding the role of agriculture in rural income, one should think that many of the rural non-farm activities, such as transportation services and food processing for instance, depend on a strong agriculture for their survival and growth.”

Mr Stamoulis added: “This study, and the workshop where it was released, marks the first time that non-farm and farm sources of income have been analyzed in such detail, mainly because this has been made possible by the vast amount of household-level data which have been meticulously analyzed and organized.”

Top experts at workshop to examine rural development issues

Evidence on the structure of rural income and a number of other issues on the rural economy are being discussed during a two-and-a-half-day FAO workshop, which opened today, looking for creative ways to help rural families escape hunger and poverty.

The workshop, called "Beyond Agriculture? The promise of the rural economy for growth and poverty reduction", brings together some of the top people in agricultural economics from around the world. Issues such as migration, government expenditures for rural areas, marketing chains and their relation to rural economies are being discussed during the workshop. Representatives from multilateral development banks will present and discuss the rural strategies of their organizations.

“In organizing the workshop, FAO is seeking to raise awareness on how recent trends and changes such as globalization shape the context in which rural economies operate and what are the implications for policies to reduce rural poverty,” according to Mr Stamoulis.

Contact:
John Riddle
Information Officer, FAO
john.riddle@fao.org
(+39) 06 570 53259

Contact:

John Riddle
Information Officer, FAO
john.riddle@fao.org
(+39) 06 570 53259

FAO/22757/G. Diana

Fruit and vegetable market in Nepal.

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Agriculture remains principal activity of rural people
Rural income diversification is an important way out of rural poverty
16 January 2006 - Despite progress in income diversification of rural households, agriculture is still the principal activity of rural households in developing countries, says FAO.
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