Rural Livelihoods: Interplay Between Farm Activities, Non-Farm Activities and the Resource Base

Despite ongoing urbanization, over 70% of the world's poor are located in rural areas (IFAD 2001). Agriculture plays an important part in their livelihoods. Rural households play a central role in realizing policy objectives. Production decisions at farm household level determine the current availability of agricultural produce (food security objectives; Roetter and Van Keulen 2007), as well as future production potentials (sustainability objectives; Verhagen et al. 2007). The majority of the poor are furthermore located in the rural areas of developing countries. Rural households are, thus, also key to poverty reduction policies. Farm households, however, do not live of farming alone. Parallel to the developments in agricultural science, the view on rural households has changed in the past decades. Analyses of single production systems have given way to a view on rural households as diversified enterprises. Rural household enterprises are not limited to the agricultural sector. Non-farm activities play an important role in income of these households all across the world, even in regions commonly thought of as subsistenceoriented, such as Sub-Saharan Africa. In a rare worldwide comparison of the importance of non-farm income in developing countries, Africa ranked first with 42% of total rural income, followed by Latin America (40%) and Asia (32%) (Reardon et al. 1998)