Rural non-farm employment (RNFE) has an increasing role to play in areas where populations are rising and natural resources are being depleted. While it is generally agreed that a dynamic agricultural sector is important for the development of RNFE, there is a risk that policies assist those who are already relatively well-off rather than the poorest.

A study from the Natural Resources Institute presents the results of a participatory rural appraisal (PRA) and a questionnaire survey examining livelihoods of poor households in the Indian state of Madhya Pradesh. Researchers from local non governmental organisations sought to identify farm and non-farm income sources of rural households, constraints on the uptake of non-farm employment and opportunities which can be translated into policy recommendations.

The research took place in sixteen villages in two districts. Betul is located in hilly terrain, has a relatively high tribal population and is rich in forest resources. Narshimpur is renowned for its fertile agricultural land and high yields of crops such as sugarcane or soybeans. In addition to crop production, people in Betul earn income from the collection of forest products such as tendu leaves which are used for making traditional cigarettes. The main sources of non-farm livelihoods include food processing, carpentry, construction, small-scale trading, transport and employment in health and other government services.

Mechanisation is starting to transform agriculture in Madhya Pradesh and in some areas is leading to a loss of jobs for labourers. While new employment opportunities are emerging for tractor drivers, thresher operators and mechanics these new jobs are introducing a gender bias as they are almost exclusively being taken up by men. The majority of villagers surveyed perceive mechanisation as having a negative impact on their livelihoods.

The survey indicated that:

• 49 per cent of the household heads had RNFE income sources in 2001, compared to 31 per cent in the mid-1990s.
• 19 per cent of those wives (i.e. non-household heads) that declared themselves as income earners had RNFE income sources in 2001, compared to 12 per cent in the mid-1990s.
• In poor families female household members continue to rely significantly on agricultural wage labour.
• Most people have more than one source of income.
• Villages with a feudal landholding system and higher concentration of land ownership are less likely to develop a dynamic non-farm sector.
• In feudally organised communities landlords are able to restrict access to relevant information and tie down labourers by giving them loans which they must work to pay back.

The diversification of livelihoods beyond farm work is hampered by inadequate credit facilities, especially for small entrepreneurs. Intermediary traders block the flow of information on market prices and opportunities. State-run markets are insufficient and many would-be innovators lack technical and managerial skills. Raw material supplies are often inadequate and traditional products face stiff competition from industrially manufactured substitutes. Electricity supply is unreliable and roads poorly maintained. Caste and class hierarchies hold back the marginalised.

Government, the private sectors and NGOs must work together to improve local governance and accountability and create business-friendly environments. They should:

• strengthen self- help savings and credit groups and facilitate linkages with flexible development credit institutions and groups elsewhere in Madhya Pradesh
• assist the poor to diversify into dairy production, small ruminants and poultry
• reduce harassment faced by people collecting forest products and other raw materials
• create business development services to support small and medium enterprises
• improve local storage facilities and the efficiency of local markets and cooperatives
• introduce vocational training in schools at a young age, especially targeting neglected girls from tribal/scheduled caste backgrounds.

Source(s):
‘Household access to rural non-farm livelihoods: synthesis of participatory rural appraisals and questionnaire surveys in four blocks of Madhya Pradesh’ by Ulrich Kleih, Richa Som, Yogesh Kumar, Surendra K Jena, Amitabh Singh, and Leena Singh, Natural Resources Institute, Report no 2378 NRI Project V0167, May 2003 Full document.

Funded by: Department for International Development, UK

id21 Research Highlight: 16 February 2004

Further Information:
Ulrich Kleih
Natural Resources Institute
The University of Greenwich at Medway
Chatham Maritime
Kent ME4 4TB
UK

Tel: 44 (0) 1644 883065
Fax: 44 (0) 1634 883706
Contact the contributor: U.K.Kleih@gre.ac.uk

The University of Greenwich, UK

Yogesh Kumar
Samarthan
Centre for Development Support
E–7/81, (Banker’s Colony), Arera Colony
Bhopal 462 016, M.P.
India

Tel: 91 755 467 625
Fax: 91 755 468 663
Contact the contributor: samarth_bpl@sancharnet.in

Samarthan Centre for Development Support, India

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