Developing economies that rely heavily on the agriculture sector for economic growth, view the promotion of the rural non-farm sector as a key rural development strategy to tackle the vicissitudes of the agricultural sector that transmit employment and income shocks to those segments of the population dependent on the sector. The close nexus between the agricultural sector and the industries dependent should by itself advocate for the promotion of the non-farm sector activities in the rural areas.Development of the rural non-farm sector, if properly planned and implemented can open opportunities for the rural poor to be gainfully employed in their own place for their sustenance and thus, reduce migration to urban agglomeration.

Several factors stifle the realisation of the growth potential of the rural non-farm sector. Chief among these are lack of skilled manpower and entrepreneurial capabilities, absence of rudimentary marketing infrastructure networks, including storage and transport, low public/private investments in rural industries, lack of basic amenities in rural areas, etc. Besides these, there are also issues of institutional arrangements for the promotion of this sector, the extent of encouragement given by the State through its policy and fiscal framework as also a delineation of the role that development financial institution, the NGO sector and the micro-finance institution should play in addressing these issues.

The growth of the MSME sector in many developing countries across the world is ample evidence of the potential that the rural non-farm sector promises. Whether the growth in non-farm sector is a result of distress diversification, or due to the demand response as the rural economy develops through linkages with the agricultural sector needs to be studied to further strengthen the case for promoting the rural non-farm sector.

In the forthcoming issue of the Asia-Pacific Rural Finance Journal, we carry well researched papers highlighting not only the theoretical and policy framework but also the experiences and insights gained from implementing the rural non-farm sector programmes in the Asia-Pacific Region, with paper contributions from Africa.

Mr. Pham Thanh Tan
General Director, AgriBank Vietnam
And Chairman, APRACA