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This paper is intended as a background to discussion of
the role, nature and scope of rural non-farm employment
in contemporary Sri Lanka. As such, its aims are limited;
it is intended only to set the stage by introducing a number
of conceptual and methodological issues.
Discussions of the role of non-farm employment
in present-day Asia (Oshima 1971; ILO 1983; Chuta and Sethuraman
1984; Islam 1987) typically set out from the following scenario.
The countries of monsoon Asia have a large proportion and
a rising absolute number of their people in rural areas
where there are high levels of underemployment and (seasonal)
unemployment. The likelihood of a higher rate of labour
absorption in agriculture is limited; there are hints that,
technically, it could be raised if agrarian reforms were
politically feasible (Ishikawa, 1978), but as things stand
that is unlikely. There is evidence of labour displacement
in agriculture, and it seems quite implausible that the
agricultural sector can mop up any large part of the rural
underemployed and unemployed (Islam 1984).
With cultivated land per rural inhabitant
falling 1/m creating a situation in which large numbers
of people have no access to productive agricultural land
(or at best have access to nothing more than the most minuscule
plots) and have little or no chance of topping up their
meagre incomes with employment in agriculture 1/m there
are persistently high levels of rural poverty. In absolute,
if not in relative terms, the number of rural people living
in poverty can be shown to be increasing. And implicit in
the analysis is a view that, without policy change and new
forms of policy intervention, the scale of rural poverty
may see a significant increase.
There is out-migration from rural areas
to the main urban centres (and viewed from cities and towns
it is sometimes considerable). But, firstly, it does not
appear to have changed the situation in the migrants’
areas of origin significantly and secondly, as a policy
response, it flies in the face of other, equally serious
development issues. Major cities are increasingly congested;
there are diseconomies of scale, urban employment creation
cannot keep pace with the influx of migrants’ and
there are acute problems of urban housing, water and sanitation.
Hence the significance of rural non-farm activities as a
means of deconcentrating investment and argumenting productive
employment in rural areas.
At the same time, it is quite evident that
rural non-farm employment is in no way a new phenomenon.
It has been an integral part of the process of industrial
growth in many countries (not least Britain and Japan).
It is also clear that hawkers, peddlers or petty manufacturers
– who are in “non-farm-activities” - are
in many cases to be found among the very poor. It is not,
therefore that non-farm activity in itself is necessarily
productive or cannot be exploitative (the history of textiles
as a rural industry decrying the latter point). Much depends
on the kind of activity, the nature of the agrarian setting
in which it is located, the level of productivity and wages,
and the broader process of transformation of which it forms
a part.
This paper examines a number of these implications. It will
attempt to cast light on three main issues: On the definition
and conceptualisation of non-farm activities, on general
policy perspectives, and on relations between non-farm activity
and agricultural growth. Contents:
- Introduction
- A Note on Definitions
- Non-Farm Activities in a Policy Setting
- Non-Farm Activities and Agricultural Growth
- Some Concluding Remarks
- Bibliography
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