12 An Overview of Programs for Promoting the Rural Nonfarm Economy

Over the past five decades, the world has unleashed enormous energy and creativity into improving the lot of the rural poor. Outside India and China, efforts have often drawn inspiration from these two leaders, initially from India and more recently from China. Following the early India model, much of this effort has targeted small rural nonfarm enterprises, on which the landless poor of the developing world often depend. Featuring a cast of literally thousands, these efforts have involved a wide array of professionals—including civil servants, agronomists, economists, geographers, regional planners, engineers, managers, bankers, businessmen, farmers, and craftsmen—experimenting with virtually every imaginable combination of technical, financial, and policy support for rural nonfarm enterprises. Indeed, because opportunities and constraints vary widely across countries and settings, this considerable programming diversity is highly appropriate. Would-be promoters of the rural nonfarm economy (RNFE) must navigate a highly variegated landscape populated by a spectrum of nonfarm activities ranging from painfully poor, labor-intensive “survivalist” activities to highly sophisticated, large-scale agribusinesses. Agronomic potential, policy environments, human endowments, and even weather all vary across locations—and frequently over time—generating rapid turnover and mutation of firms (Chapter 5). The resulting heterogeneity of enterprise sizes, activities, and economic environments leads to widely varying prospects for growth, further complicating the task of those who wish to stimulate rural nonfarm activity. Not surprisingly, the diversity of situations and opportunities leads to a potentially bewildering array of programming options and experiences. This chapter attempts to summarize and categorize the principal approaches adopted to date in developing countries outside of India and China. Because of their scale and contrasting experiences, these two goliaths are treated separately, in Chapter 13. The discussion here traces the broad history of promotional efforts elsewhere, identifying key players, contrasting the premises on which they have based their work, and summarizing available evidence on impact and cost.