International Journal of Agricultural Policy and Research
Vol.2 (5), pp.198-202,May 2014
Article ID JPR138/13/05 Pages
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Original Research Paper
Assessing the potential of non-farm and off farm enterprises in spurring rural development in Uganda
Accepted 31 April, 2014
Moses Kazungu1 and Reginald Tang Guuroh2*
1University of Bonn, Department of Economics and Agricultural Policy, Germany. Nussallee 21, 53119, Bonn Germany.
2University of Bonn, Department of Geography, Germany, Walter Flex Str. 3, 53113, Bonn, Germany.
*Corresponding Author Email:firstname.lastname@example.org
Rural non-farm activities play an important role in providing supplementary employment to small and marginal farm households thus reducing income inequalities and rural-urban migration. The rural non-farm sector has the potential to absorb a growing rural labor force, contribute to national income growth, and promote more equitable distribution of income. The objective of this paper is to review existing literature on the rural non-farm sector and assess the sector’s contribution to rural development. The study covers the entire nation of Uganda and is mainly based on the review of existing literature. A desk study was conducted focusing on government policies, as well as the national development plan. In addition, academic journals, related case studies and some text books were used during the development of this paper. In Uganda, agriculture contributes less than 25% of GDP. Complex interactions between social, economic and ecological factors might cause a further reduction and this could make non-farm income sources even more important. Research findings in Uganda show that 58% of the people working outside agriculture are in the non-farm sector and there are suggestions that non-farm income could lead to higher agricultural incomes. The rural non-farm sector must incorporate the dynamic dimensions of self-sustaining growth. The success of a strategy of rural industrialization would therefore, depend on its ability to generate income. This could be achieved through appropriate savings and investment decisions of agents involved with respect to the internal surpluses of rural non-farm activities; but it could also be met if the local multiplier created by the activity leads to an increase in investment on the part of agents other than those directly involved in the initial activity.
Key words: Rural, non-farm sector, industrialization, development, enterprises