Browsing by Subject "Diversification index"

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Außerlandwirtschaftliche Diversifikation im Transformationsprozess. Diversifikationsentscheidungen und -strategien ländlicher Haushalte in Slowenien und Mazedonien
(2005) Möllers, Judith; Heidhues, Franz
Non-farm rural diversification is gaining prominence in the debate on rural development since the end of the 1990s. The expansion of non-farm employment and the diversification of incomes are important policy objectives because they offer a solution to the employment and structural problems of a shrinking agricultural sector. Development policies focusing on the rural non-farm sector aim at offering employment options and reducing urban migration. They can contribute to poverty reduction, economic growth and a more equal income distribution. This research is based on a household survey including 240 randomly selected rural households in Slovenia and Macedonia. Since empirically based insights on diversification dynamics in transition countries are hardly available, the objective of this research is to contribute to filling this gap. The analysis focuses on diversification strategies and determinants of the decision-making process of rural people in regard to non-farm employment. The methodology combines an inductive and deductive approach with qualitative and quantitative components. For the statistical analysis primarily logistic regression models are applied. The results show that rural households in the research area are highly dependent of non-farm incomes. As expected the poverty risk between the two countries differs: Rural household incomes in Macedonia are less equally distributed. Decomposed Gini-coefficients based on non-farm incomes point at their positive effect on the income distribution. The analysis of diversification strategies indicates that coping strategies as well as risk-minimising strategies prevail. Accumulation strategies, which point at demand-pull dynamics and entrepreneurship, are less common. Attitudes towards agriculture seem to influence diversification decisions in particular. While attitudes towards non-farm activities are predominantly positive, they vary towards agriculture. Negative attitudes towards agriculture are wide-spread among the younger generation. In the age group from 16 to 25 years the proportion of negative attitudes is high in both countries, but the share in Macedonia with 50% is twice as high as in Slovenia. Important constraints of diversification in Macedonia are the non-farm labour market, low wages, insecurity and late wage payments. In both countries capital and credit availability are named as the most important reasons for not starting a business in the non-farm sector. The pressure to adapt income strategies is lower in Slovenia in general. When looking at individual employment strategies it becomes apparent that in both countries there is a declining trend of agricultural and combined employment while non-farm employment alone is increasing. In Slovenia the high level of diversification at the household level is stabilising while the structural problems in the agricultural sector persist. In contrast, the level of diversification in Macedonia is expected to further increase even though the willingness to give up agricultural activities altogether is significantly higher than in Slovenia. A promotion of the rural non-farm sector is an important policy objective as non-farm employment has a positive impact on rural incomes, particularly in poorer households. The effect of non-farm incomes on the income distribution is positive. This underlines the importance of the non-farm sector as an essential component of a poverty-oriented rural development policy. In the long term rural development policies should aim at overcoming the unfavourable small-scale agricultural structure which is the main cause of distress-pushed diversification ? particularly if full-time employment in the non-farm sector is not available. For this it is essential to support education and knowledge-building, and to offer expert advice. The intention should be to enhance entrepreneurship, creativity and the willingness and ability to take economic risks. Furthermore, the success of any effort to improve rural development policies depends on locally developed strategies, since the heterogeneity of the non-farm sector calls for decentralised political concepts. With these prerequisites the non-farm sector will be able to absorb labour released from agriculture, and the necessary structural adjustment of the agricultural sector can take place.