Role of Non-farm Activities in Poverty Reduction: Problems and Prospect – A case of Bangladesh

Introduction

Poverty is the greatest enemy that a developing country must win against. If there is a great poverty rate in one country, there is a possibility for the delayed development. Poverty is invisible yet creates a devastating impact in the people and in the country. Even if there are developed countries that aim to provide the necessary help, the developing countries remains stagnant because of the indication of poverty. Therefore both government and business sectors are pushed to bring the initiative appropriate in their country’s situation.

Background and Problem Statement

The Rural Non-Farm sector or unorganized part of the economy can play a potentially important role in generating income and employment for the large sections of the population. Rural Non-Farm sector activities are usually defined as having several characteristics: requiring minimal capital investment with low entry barriers; involving mostly self-employment and employment of unpaid family workers; using labor-intensive technology requiring low-level skills; and operating mostly outside the formal legal framework. However, what is the essential role/s of the non-farm activities in the aim of Bangladesh in reducing the poverty remains the intriguing question.

Research Aim and Objectives

The main aim of the study is to identify the role of the non-farm activities in the current situation of Bangladesh. The sole objective of the country in terms of economic terms and development overlaps the issue of poverty. With this, there are objectives that should be observed. First is the interaction and impact of the non-farm in the community. Second is to recognize the problems and prospects in which the non-farm activities delivered. And third is to create a link in the non-farm activities in answering the poverty reduction.

Literature Review

The point of return of the cause of poverty will lead back to the level of education in Bangladesh. This paralyzes the continuous growth of people and disregarding their right to contribute in their own socio-economic growth. Bangladesh is one of the many countries that are in the center of issue in inequality in terms of education and many researchers concluded that the poverty rate will continue to rise if the country did not find the specific solution (Ahmad, 2003). The issue of poverty reduction remains the central challenge for Bangladesh. It is crucial to develop the rural areas to reduce poverty in the country. And in fact, Bangladesh needs to accelerate the growth of agriculture and non-farm sectors, improve the quality of social services, ensure proper functioning of the rural institutions and expand the rural infrastructure (ADB, 2001). The non-farm activities and the associated income are identified important for the rural poor for two reasons. First, the direct agricultural income obtained by the poor is not enough to sustain their livelihoods, either because of landlessness or because the land they own or lease is insufficient. Second, wage employment in agriculture is highly seasonal, so that the poor value non-farm sources as employment supplementation. Therefore, the non-farm activities are suitable for poor households because they require little capital and generate more employment per unit of capital than do farm activities. In addition, there is an empowerment for the women and other benefits for the unemployed or underemployed youth, small farmers, landless workers and poor people living in rural towns (IFAD, 2003). Non-farm activities can be general strategy should focus on identification and acceleration of poverty-focused growth elements within the economy. There is an identified continuous support on the non-farm activities because of the significant development in the rural infrastructures in the country. With the support of the country in the non-farm activities, there is an identified continuity in income mobility for land-poor households and human resources are developed particularly in the education and skills that can contribute in the national aim to eliminate the poverty. The development priority of Bangladesh, however, should also be focused on the efficient growth policies and persistence of the people (Mujeri, 1998).

Methodology

The proposed method in the study is the use of the comparative case studies that nestled in the regions of Bangladesh. With the utilization of the case studies there is a great advantage for the study to answer the literature gaps and process of development in the country. The works of the early authors are good materials to start the investigation in the poverty reduction of the country. Every region in Bangladesh is facing the poverty and through reviewing the studies made beforehand, the study can definitely sort the necessary ideas associated with the non-farm activities.

References:

ADB, (2001) Rural Development Priorities for Poverty Reduction in Bangladesh, Asian Development Bank [Online] Available at: http://www.adb.org/documents/epps/ban/rural_development/rural_development.pdf [Accessed 22 July 2010].

Ahmad, A., (2003) Inequality in the Access to Education and Poverty in Bangladesh [Online] Available at: http://www.nek.lu.se/publications/workpap/Papers/WP03_5.pdf [Accessed 22 July 2010].

IFAD, (2003) Rural Enterprises and Poverty Reduction, Asia and the Pacific Division [Online] Available at: http://www.ifad.org/events/gc/27/roundtable/pi/discussion.pdf [Accessed 22 July 2010].

Mujeri, M.K., (1998) Bangladesh, Rural Development for Asia and the Pacific, Dhaka [Online] Available at: http://www.unescap.org/rural/doc/gov_ngo_1998/Bangladesh.PDF [Accessed 22 July 2010].