Farm sector, non-farm employment and rural livelihood: A study

In India, a majority of working force is engaged in farm sector, reflecting on the existence of widespread poverty in this sector. It is well known that agricultural growth stimulates non-farm activities through backward and forward linkages. The developmental factors like modernization and commercialization of agriculture, increased demand for non-agricultural goods and services, growing literacy, and urbanization, have tried to pull the labour force away from farm sector to more lucrative non-farm activities. At the same time, distress factors like poverty, unemployment, underemployment and natural calamities like droughts, floods, etc. have tried to push the rural workforce away from the farm sector to various nonfarm activities to supplement their income. While agriculture is undeniably the dominant source of employment in rural India, non-agricultural activities are by no means insignificant. The study has concluded that income is one of the pull factors responsible for shift of the households from farm to nonfarm sector. The non-farm sector may develop in the rural areas due to certain facilitating processes. These processes may emanate either within agriculture or outside it. The agriculture-led growth has suggested that a sustained rise in farm output and incomes can act as a prime mover in initiating the development of non-farm activities in the rural areas. Other processes such as urbanization, proximity to urban areas and development of infrastructure, which emanate outside agriculture, can also lead to the growth of non-farm activity within the rural areas. Both these processes lead to the shift of rural workers to productive employment in the non-farm sector.