Rural Transitions, Economies and Rural–Urban Links || Working Paper 11

Agricultural development takes place within the wider context of overall economic development. In the process, changes in agriculture – such as the increased commercialisation of farms in general and smallholdings in particular – interact with those in the rest of the rural economy and in the urban economy. As economies develop, in most cases their structure changes as agriculture declines in importance relative to industry and services. Yet agriculture usually grows absolutely, often ahead of population growth; while ideally labour productivity rises, allowing release of labour from farming to other activities. People move from rural to urban areas, cities grow, and economies become urbanised. A demographic transition takes place as well, as both death rates and birth rates decline, the latter after a lag during which population grows rapidly. Hence development usually brings both a structural transformation of the economy from one dominated by agriculture to one where manufacturing and services make up the bulk of activity; and a transition from a largely rural to a mainly urban society. This paper aims to summarise existing understandings of these changes, focusing on three aspects: the rural non-farm economy (RNFE), rural–urban links and migration from rural areas. In addition, social protection has been added since this is another key aspect of rural livelihoods, likely to increase in importance with growth and development.