Rural nonfarm employment and incomes in Latin America: Overview and policyimplications

Rural nonfarm employment (RNFE) and incomes (RNFI) are crucial to Latin Ame rican rural households. The Il rural household income studies in this volum e, reviewed in this paper, use 1990s: data and show that RNFI averages 40% of rural incomes. RNFI and RNFE have grown quickly over the past three deca des. The review of evidence provided some surprising departures from tradit ional images of nonfarm activities of Latin American rural households. In t erms of shares of rural incomes: (1) nonfarm wage incomes exceed self-emplo yment incomes; (2) RNFI far exceeds farm wage incomes; (3) local RNFI far e xceeds migration incomes; (4) Service-sector RNFI Far exceeds manufactures RNFI. These findings suggest the need for more development pl ogram attenti on to wage employment in the service sector, versus the traditional focus o n small enterprise manufactures. Moreover, poor households and zones tend t o have higher shares in their incomes but lower absolute levels of RNFI as compared to richer households and zones. The RNFE of the poor tend to be th e low-paid nonfarm equivalent of semi-subsistence fanning. Raising the capa city of the poor to participate in the better-paid types of RNFE is crucial ;via employment skills training, education, infrastructure. credit. Finally , RNFE has grown fastest and been most poverty-alleviating where there are dynamic growth motors, in particular in the agricultural sector, but also i n tourism, links to urban areas, mining and forestry, This means that devel oping RNF jobs cannot be done at the expense of programs promoting agricult ural development. (C) 2001 Elsevier Science Ltd. All rights reserved.