Conventional wisdom holds that non-farm incomes help to decrease inequality in the distribution of rural incomes as the needy, presumed to be those who own less land, seek alternative sources of livelihood. Such thinking may, however, be naive, suggest researchers from the University of London and University of Reading. Higher farm incomes may mean extra power, capacity and choice. Less needy people may (it follows) be better placed to take up non-farm work options. Investigations into conditions in two of Zimbabwe's Communal Lands found conflicting evidence, indicating there is no general rule. Yet opportunities arising from new labour markets and non-farm ventures can be potent forces to curb inequality.

Non-farm income is clearly important to farm households in developing countries, yet no clear pattern has emerged to help trace its effect on the distribution of rural incomes as a whole. Sample surveys of mixed arable and livestock farms in Chiweshe and Gokwe, in Zimbabwe's Communal Lands, were used to examine the distribution of income in each area. Chiweshe has more fertile land, higher rainfall and closer access to Harare. Gokwe is more remote and is in an area of relatively poor soil and low rainfall.

Main income sources in both cases are farm production of crops and animals (both for subsistence and for sale) and non-farm income, including remittances. A survey of household and individual incomes broken down by source for the two Communal Lands revealed that:

• distribution of farm income to households was far more equal in Gokwe than Chiweshe
• income from animals was more unequal than that from crops in both areas
• both animal and crop income were less equal in Chiweshe than in Gokwe

When non-farm and remittance income were included, the degree of inequality in the distribution of total household income increased in Gokwe (see charts, above). This can be accounted for partly by a highly unequal distribution of remittances in this region, although only a few people from this region leave their families to work outside the household. The opposite effect was found in Chiweshe. Here, including non-farm income and remittances in total household income results in a more equal distribution of income. Significant lessons for policymakers are that:

• Orthodox assumptions that non-farm income alleviates rural inequality are overly simplistic.
• In more remote areas with traditional agriculture, those who have higher farm incomes also tend to be better placed to exploit non-farm income opportunities.
• Where there is better infrastructure and closer access to urban markets, commercialisation of agriculture can mean that there are more opportunities for non-farm employment. Thus, households wishing to supplement income from the farm can do so, resulting in lower levels of inequality overall.

In more general terms, spurring entrepreneurs on to provide enough skilled and unskilled non-farm work opportunities remains a crucial policy goal, although for the more remote regions, this requires the necessary infrastructure to enable access to these. Collecting more micro-level income data and analysing it in ways that separate out the component sources of income will make it easier for policymakers to identify the causes of inequality.

Source(s):
Modernisation, Multiple Income Sources and Equity in the Communal Lands in Zimbabwe. Agrekon vol. 38, Special Issue: 243 - 259. By Piesse J., Simister J. and Thirtle C. (May 1999)
Legacies of Apartheid: The Distribution of Income and Basic Needs. By McDonald S and Piesse J. Birkbeck College, University of London Working Paper. Also in: The New Poverty Strategies: What have they achieved? What have we learned? Mosley P. (Ed), Macmillan (forthcoming))
On Economic Inequality. Clarendon Press, Oxford. Amartya Sen (expanded edition, 1997) >

Funded by: Not known

id21 Research Highlight: 15 September 1999

Further Information:
Jenifer Piesse
Birkbeck College
University of London
Malet St
London
WC1E 7HX
UK

Tel: +44 (0)171 631 6760
Fax: +44 (0)181 995 3437
Contact the contributor: j.piesse@bbk.ac.uk

Birkbeck College, University of London

Colin Thirtle
University of Reading
Reading
RG6 6AR
UK

Tel: +44 (0)118 931 8965
Fax: +44 (0)118 975 6467
Contact the contributor: C.Thirtle@reading.ac.uk

Other related links:
Search Eldis for sources on Agriculture

"For richer, for fairer", Insights #31, ID21, Institute of Development Studies, University of Sussex (1999)