The role of the non-farm sector in rural development in Lesotho
Rantšo, Tšepiso Augustinus
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It is stated in this research report that even though rural development policies and programmes in many developing countries focus on improving agricultural productivity to ensure food security, little attention has hitherto been paid to improving the rural non-farm sector as an alternative or complementary rural development strategy. Lesotho has been no exception in this regard. For instance, the research findings indicate that although rural development in Lesotho has improved agriculture, productivity in agriculture has in recent decades been in decline because of physical and economic factors. The rural non-farm sector has not been prioritised in rural development in Lesotho. This is the first study in Lesotho to look into the role played by the non-farm sector in rural development as regards the different sectors, namely manufacturing, trade/commerce and service. The thesis firstly scrutinises the changing paradigms of rural development in developing countries. After the Second World War, rural development in developing countries started to improve agricultural production through the adoption of Green Revolution technologies. Evidence from the research reveals that developing countries are characterised by poverty, unemployment, food insecurity and low standards of living and that modernisation in agriculture has aimed to increase food production. The research findings further indicate that though rural non-farm enterprises depend on agriculture for the supply of raw materials, the Green Revolution packages did not explicitly state that agricultural surplus would be used as raw materials in rural non-farm enterprises. What they did emphasise was the idea of ensuring food security. This was accomplished through using different policies and programmes. Most prominent was the Integrated Rural Development, which applied the integrated approach to rural development. At that point the idea of establishing/improving a rural non-farm sector came into being, but the focus was on agro-industries and not on small-scale enterprises. It can thus be said that scant attention was devoted to the rural non-farm sector in developing countries in past decades. The research findings have revealed the rural non-farm sector to have been an alternative or complementary strategy with a view to ensuring momentum in and recognition for agriculture in developing countries in the late 1980s and early 1990s during the adoption of Structural Adjustment Programmes and macroeconomic reforms. The research findings further indicate that Structural Adjustment Programmes advocated retrenchment in the public sector and that this caused unemployment and poverty. The research findings moreover show that the reduction of government subsidies, especially in agriculture ‒ as a specific condition of Structural Adjustment Programmes ‒ caused agriculture to decline, which in turn resulted in food insecurity in many countries. Therefore, as a response to escalating poverty, increasing unemployment and food insecurity, many people participated in non-farm activities so as to make a living. During the period of rural-urban linkages, the establishment of non-farm enterprises gained momentum in developing countries in the 1990s. Evidence shows that rural-urban linkages established good communication networks between urban and rural areas, which served to facilitate trade between rural and urban areas. Research on Lesotho indicates that many people lost jobs in the public sector when Structural Adjustment Programmes were adopted in 1991, and which resulted in unemployment, poverty and food insecurity. Unemployment in Lesotho was further aggravated by retrenchment of Basotho males on the South African goldmines from the early 1990s onwards. In this regard, those families dependent on migrant labourer remittances as a source of livelihood faced food insecurity. However, in order to make a living, many former mineworkers used the retrenchment packages as start-up capital towards the establishment of non-farm enterprises. As a result, the non-farm sector created employment opportunities for the former Basotho mine workers. The research findings moreover indicate that, subsequent to the decline in agricultural production and the loss of jobs in the South African goldmines, rural non-farm incomes have, for many people, become the main livelihood sources for many people. Although rural non-farm enterprises contribute to rural development by creating incomes, employment and ensuring food security, there are various factors that affect the performance of non-farm enterprises: demographic factors and factors related to location, business linkages, competition and government support. For instance, the research findings reveal that education levels have a bearing on the performance of the non-farm enterprises, so much so that the performance of non-farm enterprises owned by entrepreneurs with tertiary education is better than that of enterprises owned by people with low levels of education. Even though enterprises owned by people with tertiary education tend to perform better, the contribution of non-farm enterprises in terms of employment creation, income earnings and ensuring food security is however not significant. Thus, rural development policy should, to a larger extent, focus on the rural non-farm sector, and the different stakeholders should do their part towards improving the sector.