Publication: The Rural Nonfarm Sector and Livelihood Strategies in Sri Lanka: Background Report to Sri Lanka Poverty Assessment
Loading...
Date
2021-10-01
ISSN
Published
2021-10-01
Author(s)
Editor(s)
Abstract
Sri Lanka’s economy underwent steady structural transformation over the last two decades. During this time, economic activities increasingly shifted toward industry and services. Poverty fell significantly during this period, mainly led by nonfarm income growth. The nature of rural nonfarm activities is quite heterogeneous and nonfarm activities can entail low-return activities. Understanding the nature of the rural nonfarm economy is a first step towards assessing its potential to facilitate economic transformation and where policy interventions could be useful. The main findings are two-fold. First, there has been a clear shift from farm to nonfarm activities over the last decade, and livelihoods sources vary significantly across the income distribution. For example, poor households are much more likely to be engaged in farm activities or wage employment in industries, whereas rich households have a higher likelihood of working in services. While both farm and nonfarm activities are vital to support rural livelihoods, it is the nonfarm sector that engages the majority of rural workers. Second, better education is strongly associated with higher participation and payoff from nonfarm activities. Interestingly, education does not seem to influence the choice between engaging in farm and unskilled nonfarm employment, highlighting a possible skills barrier to moving to better-paying nonfarm jobs.
Link to Data Set
Citation
“2021. The Rural Nonfarm Sector and Livelihood Strategies in Sri Lanka: Background Report to Sri Lanka Poverty Assessment. © World Bank. http://hdl.handle.net/10986/36513 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Poverty Decline, Agricultural Wages, and Non-Farm Employment in Rural India 1983–2004(2009-03-01)The authors analyze five rounds of National Sample Survey data covering 1983, 1987/8, 1993/4, 1999/0, and 2004/5 to explore the relationship between rural diversification and poverty. Poverty in rural India declined at a modest rate during this period. The authors provide region-level estimates that illustrate considerable geographic heterogeneity in this progress. Poverty estimates correlate well with region-level data on changes in agricultural wage rates. Agricultural labor remains the preserve of the uneducated and also to a large extent of the scheduled castes and scheduled tribes. Although agricultural labor grew as a share of total economic activity over the first four rounds, it had fallen back to the levels observed at the beginning of the survey period by 2004. This all-India trajectory masks widely varying trends across states. During this period, the rural non-farm sector grew modestly, mainly between the last two survey rounds. Regular non-farm employment remains largely associated with education levels and social status that are rare among the poor. However, casual labor and self-employment in the non-farm sector reveal greater involvement by disadvantaged groups in 2004 than in the preceding rounds. The implication for poverty is not immediately clear - the poor may be pushed into low-return casual non-farm activities due to lack of opportunities in the agricultural sector rather than being pulled by high returns offered by the non-farm sector. Econometric estimates reveal that expansion of the non-farm sector is associated with falling poverty via two routes: a direct impact on poverty that is likely due to a pro-poor marginal incidence of non-farm employment expansion; and an indirect impact attributable to the positive effect of non-farm employment growth on agricultural wages. The analysis also confirms the important contribution to rural poverty reduction from agricultural productivity, availability of land, and consumption levels in proximate urban areas.Publication Sri Lanka : Promoting Agricultural and Rural Non-farm Sector Growth, Volume 1. Main Report(Washington, DC, 2003-02-26)Economic development has brought about, the decline in contribution of the agricultural sector to the economy of Sri Lanka, and, consistent with this economic transformation, the structure of employment also changed. Thus, as labor migrates away from agriculture, the productivity, for those who remain in the land, needs to increase significantly. This report examines the constraints to promoting more rapid agricultural, and rural non-farm sector growth, and, reviews the recent performance of the agricultural, and rural non-farm sectors, in particular the non-plantation agricultural sector; scrutinizes the major policy, and regulatory barriers, that hinder a sustained growth in rural areas; and, proposes options for improvement in the key areas. A critical step to achieve this sector growth, and meet the changing demands of the overall economy, is the need to formulate, and implement a renewed rural development strategy, that builds on synergies in the agricultural, and non-farm sectors. This integrated rural development framework becomes an instrument that can complement a sustained growth in the non-farm sector, namely through the performance of public agricultural research, and extension systems, formulated under an updated National Agricultural Strategy and Policy, that modernizes technology policies, and regulations, commits to stabilizing tariff policies, and similarly, commits to implementing policy reforms in land administration, water, labor, commodity marketing, and the commercial private sector. Nonetheless, the report further suggests that prior to implementing this strategy, the Government should formulate a Poverty Reduction Strategy, a critical vehicle for completing the rural strategy framework.Publication Household Enterprises in Sub-Saharan Africa : Why They Matter for Growth, Jobs, and Livelihoods(World Bank, Washington, DC, 2012-08)Despite 40 percent of households relying on household enterprises (non-farm enterprises operated by a single individual or with the help of family members) as an income source, household enterprises are usually ignored in low-income Sub-Saharan-African development strategies. Yet analysis of eight countries shows that although the fast growing economies generated new private non-farm wage jobs at high rates, household enterprises generated most new jobs outside agriculture. Owing to the small size of the non-farm wage job sector, this trend is expected to continue for the foreseeable future. This analysis of enterprises and their owners shows that although it is a heterogeneous sector within countries, there are many similarities across countries, indicating that cross-country learning is possible. For labor force participants who want to use their skills and energy to create a non-farm income source for themselves and their families, household enterprises offer a good opportunity even if they remain small. The paper finds that given household human capital and location, household enterprise earnings have the same marginal effect on consumption as private wage and salary employment. The authors argue that household enterprises should be seen as part of an integrated job and development strategy.Publication Priorities for Sustainable Growth : A Strategy for Agriculture Sector Development in Tajikistan, Technical Annex 6. Rural Poverty(Washington, DC, 2012)Agriculture sector growth has made a powerful contribution to post-war economic recovery in Tajikistan, accounting for approximately one third of overall economic growth from 1998 to 2004. Sector output increased by 65 percent in real terms during this period, and has now returned to the level extant at independence in 1990. Total Factor Productivity (TFP) has also increased, by 3 percent per year. Despite this progress, there is legitimate concern that this growth is unsustainable. Evidence suggests that it has been driven largely by the external factors noted above, rather than substantive changes to resources, incentives and the behavior of factor and commodity markets. First, an extensive program of policy reform, particularly in the area of land ownership, has yet to make a substantial impact on the incentive structure for agricultural workers cultivating the majority of arable land. Second, sustainable growth requires positive net investment. Third, commodity markets remain weak, with a limited capacity to translate increased demand into improved production incentives. And fourth, growth in crop production has been largely driven by low value food and cereal crops. A sustainable increase in access to rural finance will require much greater emphasis on the development of alternative sources of finance for all of agriculture, in addition to resolution of the cotton debt crisis. The capacity for agricultural loan appraisal and management also needs to be strengthened, new collateral instruments introduced and new loan products developed, which are suited to agriculture in general and small-scale farmers in particular.Publication Sri Lanka : Promoting Agricultural and Rural Non-farm Sector Growth, Voume 2. Annexes and Statistical Tables(Washington, DC, 2003-02-26)Economic development has brought about, the decline in contribution of the agricultural sector to the economy of Sri Lanka, and, consistent with this economic transformation, the structure of employment also changed. Thus, as labor migrates away from agriculture, the productivity, for those who remain in the land, needs to increase significantly. This report examines the constraints to promoting more rapid agricultural, and rural non-farm sector growth, and, reviews the recent performance of the agricultural, and rural non-farm sectors, in particular the non-plantation agricultural sector; scrutinizes the major policy, and regulatory barriers, that hinder a sustained growth in rural areas; and, proposes options for improvement in the key areas. A critical step to achieve this sector growth, and meet the changing demands of the overall economy, is the need to formulate, and implement a renewed rural development strategy, that builds on synergies in the agricultural, and non-farm sectors. This integrated rural development framework becomes an instrument that can complement a sustained growth in the non-farm sector, namely through the performance of public agricultural research, and extension systems, formulated under an updated National Agricultural Strategy and Policy, that modernizes technology policies, and regulations, commits to stabilizing tariff policies, and similarly, commits to implementing policy reforms in land administration, water, labor, commodity marketing, and the commercial private sector. Nonetheless, the report further suggests that prior to implementing this strategy, the Government should formulate a Poverty Reduction Strategy, a critical vehicle for completing the rural strategy framework.
Users also downloaded
Showing related downloaded files
Publication Economic Recovery(World Bank, Washington, DC, 2021-04-06)World Bank Group President David Malpass spoke about the world facing major challenges, including COVID, climate change, rising poverty and inequality and growing fragility and violence in many countries. He highlighted vaccines, working closely with Gavi, WHO, and UNICEF, the World Bank has conducted over one hundred capacity assessments, many even more before vaccines were available. The World Bank Group worked to achieve a debt service suspension initiative and increased transparency in debt contracts at developing countries. The World Bank Group is finalizing a new climate change action plan, which includes a big step up in financing, building on their record climate financing over the past two years. He noted big challenges to bring all together to achieve GRID: green, resilient, and inclusive development. Janet Yellen, U.S. Secretary of the Treasury, mentioned focusing on vulnerable people during the pandemic. Kristalina Georgieva, Managing Director of the International Monetary Fund, focused on giving everyone a fair shot during a sustainable recovery. All three commented on the importance of tackling climate change.Publication Education, Social Norms, and the Marriage Penalty(Washington, DC: World Bank, 2024-10-16)A growing literature attributes gender inequality in labor market outcomes in part to the reduction in female labor supply after childbirth, the child penalty. However, if social norms constrain married women’s activities outside the home, then marriage can independently reduce employment, even in the absence childbearing. Given the correlation in timing between childbirth and marriage, conventional estimates of child penalties will conflate these two effects. The paper studies the marriage penalty in South Asia, a context featuring conservative gender norms and low female labor force participation. The study introduces a split-sample, pseudo-panel approach that allows for the separation of marriage and child penalties even in the absence of individual-level panel data. Marriage reduces women’s labor force participation in South Asia by 12 percentage points, whereas the marginal penalty of childbearing is small. Consistent with the central roles of both opportunity costs and social norms, the marriage penalty is smaller among cohorts with higher education and less conservative gender attitudes.Publication Media and Messages for Nutrition and Health(World Bank, Washington, DC, 2020-06)The Lao People’s Democratic Republic (Lao PDR) has experienced rapid and significant economic growth over the past decade. However, poor nutritional outcomes remain a concern. Rates of childhood undernutrition are particularly high in remote, rural, and upland areas. Media have the potential to play an important role in shaping health and nutrition–related behaviors and practices as well as in promoting sociocultural and economic development that might contribute to improved nutritional outcomes. This report presents the results of a media audit (MA) that was conducted to inform the development and production of mass media advocacy and communication strategies and materials with a focus on maternal and child health and nutrition that would reach the most people from the poorest communities in northern Lao PDR. Making more people aware of useful information, essential services and products and influencing them to use these effectively is the ultimate goal of mass media campaigns, and the MA measures the potential effectiveness of media efforts to reach this goal. The effectiveness of communication channels to deliver health and nutrition messages to target beneficiaries to ensure maximum reach and uptake can be viewed in terms of preferences, satisfaction, and trust. Overall, the four most accessed media channels for receiving information among communities in the study areas were village announcements, mobile phones, television, and out-of-home (OOH) media. Of the accessed media channels, the top three most preferred channels were village announcements (40 percent), television (26 percent), and mobile phones (19 percent). In terms of trust, village announcements were the most trusted source of information (64 percent), followed by mobile phones (14 percent) and television (11 percent). Hence of all the media channels, village announcements are the most preferred, have the most satisfied users, and are the most trusted source of information in study communities from four provinces in Lao PDR with some of the highest burden of childhood undernutrition.Publication Remarks at the United Nations Biodiversity Conference(World Bank, Washington, DC, 2021-10-12)World Bank Group President David Malpass discussed biodiversity and climate change being closely interlinked, with terrestrial and marine ecosystems serving as critically important carbon sinks. At the same time climate change acts as a direct driver of biodiversity and ecosystem services loss. The World Bank has financed biodiversity conservation around the world, including over 116 million hectares of Marine and Coastal Protected Areas, 10 million hectares of Terrestrial Protected Areas, and over 300 protected habitats, biological buffer zones and reserves. The COVID pandemic, biodiversity loss, climate change are all reminders of how connected we are. The recovery from this pandemic is an opportunity to put in place more effective policies, institutions, and resources to address biodiversity loss.Publication Global Regulations, Institutional Development, and Market Authorities Perspective Toolkit (GRIDMAP) - Framework and Methodology(Washington, DC: World Bank, 2024-12-05)GRIDMAP--the Global Regulations, Institutional Development, and Market Authorities Perspective Toolkit--provides emerging markets and developing economies (EMDEs) with a “Minimum Package” of policies to build markets that are trustworthy, safe, and competitive. The “Minimum Package” sets out essential regulatory provisions, institutional arrangements, and implementation and enforcement needed for those markets to thrive. GRIDMAP will provide modules focused on various subjects of market regulation, such as consumer protection and data markets.