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Despite Diversification, Agriculture Still King in Rural Areas

A new report says despite significant progress in income diversification, agriculture remains the principle activity of rural households in developing countries. The issue was the topic of a three-day seminar this week in Rome. Voice of America’s Joe De Capua has the story.

The UN Food and Agriculture Organization report shows that in three regions of the developing world – including sub-Saharan Africa – about 84 percent of rural households participate in agricultural activities.

Kostas Stamoulis is with the FAO’s Agriculture and Development Division.

“There’s been quite a bit of talk in the last few years about income diversification. So, a lot of people have gotten this argument as evidence that agriculture matters less in developing countries. However, the preliminary analysis that we have of a few country data that indeed households have pretty high participation in agriculture in the sense that at least one member of the household or some members of the household spend some time on agricultural activities,” he says.

The findings are among the preliminary results of a joint project by the FAO, World Bank and American University in Washington, DC.

Stamoulis, one of the project coordinators, says families try to find alternative means of generating income to prepare for future problems, such as drought.

“For example, a household with a number of members, let’s say, can do different things. They can have crop activity. They can raise some livestock. They may have somebody doing small trade or processing of agricultural commodities. They may have somebody working as a laborer in another farm or they have somebody working as a laborer in something not related to agriculture. They may have a migrant who sends remittances. So, households have strategies,” he says.

Nevertheless, despite those strategies, families face obstacles.

Stamoulis says, “Poor households face constraints in diversifying. It’s not that easy. Sometimes there are barriers to some activities. You can’t enter, let’s say, small trade if you don’t have some initial capital. So, there are constraints to diversification.”

Stamoulis adds many rural non-farm activities rely heavily on agriculture, such as transportation services and food processing. So agriculture’s importance to rural economies remains very high.

The FAO is using events, like this week’s seminar, to raise awareness about recent trends, such as globalization, and how they affect rural economies.