56

CHAPTER IV
NATURE AND EXTENT OF RURAL NON-FARM
EMPLOYMENT: EVIDENCE FROM LITERATURE AND
PRESENT STUDY
Many studies on rural non-farm employment in developing countries indicate
a lively engagement of rural households in various kinds of non-farm activities. An
early study on rural employment in India (Dantwala, 1953) examined the nature and
extent of non-farm employment and factors influencing them. Signifying the
importance of non-farm employment, the study asserts that there are more avenues of
productive employment than the planners usually think of.
Various country-level studies, for example, by Ho (1986a,1986b) of China and
Japan respectively; Kada (1983, 1986) of Japan; Fabella (1986) of Philippines:
Onchan and Chalamwong (1986) of Thailand; Chadha (1986) of Indian Punjab; White
(1991) of Java; Lanjouw (1999) of Ecuador; de Janvry and Sadoulet (2001) of
Mexico; Adams and He (1995), Khokhar (2004) and Arif, Nazli and Haq (2000) of
Pakistan; and by Hossain (2004) of rural Bangladesh all put forth evidence to show
that not only rural non-farm employment is a significant component of rural
employment in developing regions, the engagement of rural workers in various nonfarm activities has also been increasing over time.
Before discussing the nature and structure of rural non-farm activity in Punjab
as flowed from the results of study, it would be appropriate to briefly review the
literature concerned with the nature and structure of rural non-farm employment, its
composition, size, location of employment, cyclicity of farm and non-farm operations,
and finally, dynamics and evolution of rural non-farm activities over a period of time.
These studies provided a much needed foundation and context to locate and analyze
the importance of rural non-farm activities in the state. The discussion has been
divided into two sections. Section I is devoted to theoretical contours and empirical
evidences available in the literature. Empirical evidence emerging from the present
study has been discussed in Section II.
I
4.1

Theoretical underpinnings and empirical evidence of RNFS

57
Numerous studies have revealed various facts about nature, extent and
structure of rural-non-farm employment in India and abroad.

The following

discussion highlights all these aspects of rural non-farm sector.

4.1.1 Heterogeneity in RNFS
Hymer and Resnick (1969) conceptualized rural non-farm activities or Z-good
sector as broadly homogeneous, composed of traditional non-agricultural activities
carried out in individual households or at the village level. Ranis and Stewart (1993),
however, asserted that rural non-farm activities ranges from the household and village
production system producing very simple, on a small scale, low quality products, to
small modern factories using mechanical horse-power, sometimes using imported
technology and producing modern high quality products. They reformulated the
Hymer and Resnick model by dividing the Z-good sector into two components: ZT,
using traditional household and village processes and products, and ZM, covering nontraditional or modern rural non-agricultural processes and products. The latter are
more likely to be located in rural towns. An example of ZT would be household rice
milling or hand-loom weaving, while metal making or machinery repair shops would
constitute typical ZM activities.
Clearly, rural non-farm sector is highly heterogeneous, comprised of activities
with a wide range of labour and capital productivities. Within the rural manufacturing
component of the RNF sector, there is surprising diversity of both with regards to the
manufacturing techniques used and the types and qualities of final products. To a
large extent, this diversity is linked to nature and income level of markets which
determine both the range and quality of products in demand; on the supply side, local
income levels (labour costs), capital availability, infrastructure, and competition from
large scale industry are the most important factors determining production techniques
and product types. Similarly, in construction, commerce, transport and service
activities, considerable variations are found regarding the types and qualities of
products offered between different regions (Chuta and Liedholm, 1979; Anderson and
Leiserson, 1980). Displaying the similar tendency, the rural non-farm sector in India
is highly diverse, ranging from primary activities such as mining, through
manufacturing and construction, tertiary services like transport, trading and public
services. Enterprises in the sector range from single self-employed worker at home to

58
large factories. Types of jobs vary from well paid regular employment to low paid
casual labour. In short, the rural non-farm sector cannot be treated as a homogeneous
sector, but needs to be seen in its component parts or sub-sectors (Fisher et al., 1997).
Wide heterogeneity is seen even in a single non-farm activity like wood
industry, where tiny, small and large units co-exist and even within the same category,
certain units use traditional technology and other may use modern techniques of
production producing highly differentiated products; some units are involved in petty
production, whereas others are organized on capitalistic mode of production. The later
units were found using computers, internet, etc. Some even have ISI certification
(Singh, and Vishwaballah, 2005).
A study of agriculturally advanced and dynamic areas of rural Punjab has
found 53 types of non-farm activities. Several of these were rooted in traditional
pursuits like blacksmiths, tailors, barbers, cobblers, goldsmiths, cloth merchants,
raggis, masons, saw-mill operators, carpenters, sweepers, etc. These non-farm
activities provide customary goods and services for the rural community. In general,
these activities were found to be performed by the poorer households in the villages.
Other non-farm activities were more 'modern' in their orientation. These include softdrinks manufacturers/sellers, radio and electrical repairs, taxi owners/drivers, video
and cassette sellers and cable television operators. There are, however, greater barriers
to entry, and these are largely confined to those households with sufficient human and
financial capital (Simmons and Supri, 1995). Almost similar findings have been
reported by Shand and Chew (1986) in a study of a rural Malaysian region.
Mukhopadhaya and Lim (1985) distinguish two types of rural non-agricultural
activities (RNAs) in Asia. First, (RNA sub sector I) is comprised of products and/or
activities exhibiting the following characteristics: enterprises run on a more or less
stable basis with an eye on surplus generation and growth, using hired labour, and a
certain degree of technical sophistication. Second, (RNA sub sector II) is comprised
of products/or activities which are often, though not always seasonal, which are run
solely with the help of unpaid family labour, using rather primitive technology
catering mostly to local market and responding more to the supply side of the labour
market than to the market demand for output.

59
The differences between the two categories are more discernible in terms of
capital use and production relations rather than broad product categories. They further
comment that it appears that RNA-I is predominant in East Asia, and these units with
strong links with urban industry in countries like Japan, Taiwan and Korea have
higher rates of profitability and dynamism than units which have stronger linkages
especially backward linkages with agriculture. RNA-II seems to be distinctly the
dominant type in South Asia with non-agricultural incomes often lower than
prevailing agricultural wages. In these circumstances, the issue is not just the creation
of employment but also whether such employment is sufficiently remunerative or not
(Mukhopadhaya and Lim, 1985; Harriss, 1991; Saith, 1992; Bhalla, 2007).
4.1.2 Diversity of earnings/productivity in RNFS
Wide diversity in earnings is another important feature of rural non-farm
employment. White (1991) asserts that in a differentiated and 'unreformed' agrarian
structure, households and individuals occupying different positions in the agrarian
structure engage in non-farm activities for different reasons, and under very different
conditions which also provide very different returns. Unni (1991) also remarks that
any study of rural labour markets has to take into consideration the vast differentiation
among households. The nature of non-agricultural activity as well as the factors
responsible for it would be quite different at the two ends of the income distribution
spectrum or at the extreme ends of land and asset class categories.
Abraham (2009), Leons and Feldman (1998), Varma and Kumar (1996), and
Hossain (1987) show that wide diversities exist in earnings and productivities in
various lines of rural non-farm employment. This diversity in productivities and
earnings has led some authors to abstract a dual structure of earnings in the nonagricultural sector based on low versus high labour productivity (White, 1976; Hart
1998; Islam, 1984; Koppel and Hawkins, 1994; Lanjouw and Lanjouw, 1995;
Haggblade et al., 2007). Islam (1984) has contended that in some agriculturally
advanced regions, there has been growth of activities requiring some education and
skill and thereby yielding good returns. To him, a proliferation of non-farm activities
in the South and South-East Asian countries is a part of the process of
proletarianisation that is going on in the rural areas of these countries. The type of
growth of non-farm activities that is taking place is an inevitable extension of this

60
process and results mainly from a struggle for survival by the rural poor. Studies by
Vaidyanathan (1986); Parthasarthy et al., (1998); Simmons and Supri (1995);
Ghuman (2005); and Ranjan (2009) report similar distress induced diversification.
Commenting on the nature of rural non-farm activities in India, Chandrasekhar
(2001) notes that the growth of non-farm activities has not been accompanied by the
growth of small capitalist enterprises based on hired labour, which would also be
indicative of dynamic diversification of economic activity. Rather, the share of ownaccount enterprises (OAEs) or enterprises that do not use hired labour has remained
constant at around 77 per cent of all non-farm enterprises in rural areas during the
1980s and 1990s. The domination of trade and services over manufacturing activities
in the composition of rural non-farm enterprises is also claimed as another indication
of their lack of dynamism. Clearly, smallness of rural enterprises is a characteristic
feature of rural non-farm employment in India. But the issue is: are small enterprises
universally characterized by low-productivity, low-returns and low levels of capital
creation?
An early study of Pakistani Punjab shows that small scale engineering
industry, which emerged concomitantly with the rapid agricultural growth, had been a
vehicle for marshaling indigenous 'minor' savings/investible funds for the
development of entrepreneurial and managerial talent as well as, for training of skilled
and semi skilled labour. The small scale enterprises operated with a cost advantage
large enough to permit survival and growth despite heavy subsidies given by the
government to the large scale firms of the economy (Child and Kaneda, 1975).
Fabella (1987) asserts that, in fact, the smallness and continuity with the tradition
which rural non-farm activity sports may be its strength and not weakness. It may
mean that the cost of social transformation is minimized because it is spread over a
longer period of time. It may also mean that it draws its dynamism from within the
socio-cultural matrix and not from some artificial subsidies from the government.
Chuta and Liedholm (1979) and Lanjouw and Lanjouw (2001), after reviewing and
summarizing a number of studies, note that in many branches of economic activity,
rural small sized enterprises are equally productive and give equal return to labour
and capital if not more than their large sized urban based counterparts. Rather, the use

61
of inputs of labour and capital by these rural based units is a real reflection of societal
availability of capital and labour in many populous developing countries.
Contrary to assertions of distress led diversification, examples are also there
which show that rural non-farm involvement is an indicator of economic and social
development with diversified and increased incomes to rural households. Jodhka
(2002) asserts that the regularity in and security of wage payment receipts, sense of
dignity, respect and a sense of self-worth amongst the participants of rural non-farm
sector are important issues which must be factored into while computing the returns
from rural non-farm activities. Shylendra and Thomas (1995) found that nearly 67 per
cent of the households pursuing rural non-farm employment did not opt for seasonal
migration meaning thereby that non-farm employment in the village has a salutary
effect on households' livelihoods. Chadha (1986) argues that a fast growing
agriculture, exemplified by Punjab Development Model, is capable of generating new
and expanding avenues of non-farm employment and income, especially for the
weaker sections of the society. Bhalla (1993a, 1993b) showed that overtime rising
labour productivity in Indian agriculture did not make the decisive contribution to the
observed rise in real wage rates. She contends that in the long term rise of real wage
rates in India, beginning in the 1970s, the prime mover in all states seems to have
been workforce diversification, rather than growing labour productivity. Basu and
Kashyap (1992) and Basant (1994) also contend that distress is not the main driving
force behind the growth of the rural non-agriculture sector especially in Gujarat.
Bhalla and Hazell (2003) also note that the expansion of rural non-farm sector
in India has resulted in an increase in productivity in agriculture also. Not only real
wages in agriculture have increased, but the wages in non-agricultural occupations are
now significant higher than in agriculture. Fisher et al. (1997) also noted that rural
non-farm sector jobs, on the average, are superior to those in agriculture. Workers in
the RNFS are better paid, less poor and more educated, and there is also less child
labour in this sector.
A lot of conflicting evidence and controversies like the above which are found
in literature regarding RNF sector arise precisely because of the heterogeneity which
characterizes the rural non-agricultural activities (Mukhopadhaya, 1985). A large part
of the confusion disappears if one analyzes the components of the RNF sector and

62
realizes that for all intents and purposes, this sector has a rather sharply bi-modal
nature. Actually, wide variations in levels of employment and income shares across
countries and regions within the same country are another feature of rural non-farm
sector. In the case of India, Lanjouw and Shariff (2004) show that the share of nonfarm income is the highest in the states of Himachal Pradesh, North-East, West
Bengal and Tamil Nadu. In these states, non-farm sources account for more than 45
per cent of total income. Conversely, in the states of Gujarat, MP, Andhra Pradesh,
Maharashtra and Karnataka, the share of income accruing from non-farm sources is
below 25 per cent (below 20 per cent in Maharashtra). For the remaining states, the
average share is typically around one-third. Even in one state wide variations have
been noted (Singh, 2005).
4.1.3 Composition of RNFS
Sectorally, despite a common policy emphasis on rural industries,
manufacturing typically accounts for only 20-25 per cent of rural non-farm
employment, while trade, transport, construction and other services account for 75 per
cent to 80 per cent. Spatially, the composition of non-farm activity varies as well.
While home-based cottage industries predominate in rural areas, mandi towns and
urban centres support an increasing concentration of factory manufacturing, services
and trade. The composition of services differs as well. While rural areas house small
retailers, basic farm equipment repair services, input supply firms and other services
such as primary schooling, health clinics, barber shops, milling and transport facilities
tend to locate in small towns. Larger settlements attract cinemas, restaurants,
wholesale distributors and higher level schools, health and communication facilities
(Wanmali, 1983; Hazell and Haggblade, 1990; Simmons and Supri, 1995; Renkow,
2007). Government services, likewise, provide significant rural employment
opportunities in some instances. In rural Egypt, government employment generates
over 45 per cent of rural non-farm incomes, while in rural Pakistan government jobs
provide about 25 per cent of rural non-farm earnings (Adams and He, 1999; Adams,
2003). In rural India, government jobs account for nearly 20 per cent of rural nonfarm employment (Fisher et al., 1997).
Remittances account for a large share of rural income at some locations. In the
mining economies of Southern Africa, remittances may account for as much as half of

63
all rural household income. They likewise form an important part of household
income diversification and risk reduction strategies (Barrett, et al, 2001; Ellis and
Freeman, 2004). In most rural settings, however, local business and wage income
account for a majority of non-farm earnings, while remittances and transfers
including those from international migrants typically account for 15 per cent to 20
per cent of non-agricultural rural income and 5 per cent to 10 per cent of total rural
income.
Chuta and Liedholm (1979) on the basis of a review of many country-specific
studies show that manufacturing ranges from 22 to 46 per cent, commerce ranges
from 11 to 35 per cent, while services range from 10 to 50 per cent of total rural nonfarm employment. Other non-farm activities such as construction, transport and
utilities generally account for less than 25 per cent of rural non-farm employment.
Similar estimates have been provided by Anderson and Leiserson (1980). A number
of studies of rural non-farm employment in Sub-Saharan Africa (Haggblade et al.,
1989) informs that amid wide variations these studies indicate that commercial
establishments typically predominate employing 30 per cent to 40 per cent of rural
non-farm workforce. Services and manufacturing comprise about 25 per cent each,
with construction and mining accounting for the remainder. Within manufacturing
food preparation, tailoring, carpentry, and metal working activities predominate.
Arif et al. (2000), in a study of non-farm employment and poverty in rural
Pakistan, inform that within non-agriculture, four sub-sectors namely, construction,
service, manufacturing and commerce are relatively more important. Service sector
has grown impressively. Its share in total non-agricultural employment increased from
20 per cent in 1968-69 to about 33 per cent in 1997-98. Other important sectors were
household services, transport, textile (garments) and woodwork including handicrafts.
Hossain (2004) highlights that in Bangladesh in 2000; one-third of rural non-farm
employment was generated in business enterprises and service sector activities. The
proportion of workers engaged in these activities increased by nearly 60 per cent over
the time period of 1987-2000. The service sector activities are relatively full-time
activities, while a substantial proposition of workers takes up business activities as a
part-time occupation.

64
A common perception about rural non-farm employment in India is that it is
the manufacturing sector which dominates the rural employment scene. This is far
from true. Fisher et al., (1997) inform that only one-third of RNFS jobs are in the
manufacturing, while 60 per cent are in services. The remainder is in construction and
mining. Reading data pertaining to the year 1994, Rosegrant and Hazell (2000)
revealed that rural non-farm employment in India accounted for 23 per cent of total
rural employment and out of rural non-farm jobs 42.3 per cent were accounted for by
manufacturing and construction, 53.1 per cent by services and 2.2 by others. The
service sector, thus, is the dominant sub-sector of rural non-farm employment.
The fact that different sub-sectors of rural non-farm sector evolve over time
has also been confirmed by a study of China's town and village enterprises (TVEs).
The sub-sectoral composition of these TVEs underwent some significant changes
during 1978-2000 (Kabra, 2005). The share of agricultural enterprises which was onethird in 1978 came down to below one per cent in 2000. Industries, especially
manufacturing industries, constituted the main activity of more than one-half of the
TVEs during 1970s and early 1980s. Industries, however, lost ground to services such
as wholesale trade, transport and tourism over the years to some extent. Similarly,
Bhalla (2005), in her study of India's unorganized sector, notes that in terms of rural
employment generation in 1984-85 to 1994-95, the overall performance of the
unorganized service sector was outstanding; that of trade modest; and that of
manufacturing utterly dismal.
In nutshell, the literature review ends with a very recent study by Haggblade,
et al (2007). It reveals that in the developing countries of Africa, Asia, Latin America,
West Asia and North Africa, services and commerce generally account for the bulk of
rural non-farm activity, although shares vary perceptibly among countries and across
rural regions. Average employment shares across continents suggest that tertiary
activities typically account for between 50 per cent and 75 per cent of rural non-farm
activity. Rural manufacturing, despite the considerable attention it has received,
normally accounts for about 20 per cent to 25 per cent of total rural non-farm
employment in developing countries. Below the broad sectoral aggregates, details of
specific RNF activities reveal rich differences across countries and even across
regions within the same country.

65
4.1.4 Size of RNF enterprises
Size of enterprises and variations in it are important points for ascertaining the
equity implications of rural non-farm policies and programmes. Haggblade et al.,
(1989) assert that whether they use employment or capital investment as the yardstick,
studies of African rural non-farm activity overwhelmingly conclude that non-farm
enterprises are small. Similar findings have been reported from elsewhere (Bhalla,
2004; Fisher et al., 1997). The latter study reveals that in rural India, on average, each
rural enterprise provides work to only 2.3 persons. About 80 per cent enterprises run
without power, and 18 per cent without any premises. The typical rural undertaking
has two people of whom one is hired, eking out a living with very limited capital
investment and without any electricity. Nearly, 92 per cent of the rural enterprises
were under private ownership, the rest been cooperatives: 90 per cent were perennial
in nature. About 78 per cent operated under premises of any sort. While the majority
of the rural small scale enterprises may be of survival type and that the rest may not
grow into large scale enterprises, their contribution in terms of mobilization of capital
and entrepreneurial experience, and attempts at inter-generational improvement of
household incomes, needs to be emphasized. Even, the large segments of the
enterprises that appear to have a limited growth potential provide a vital source of
employment and incomes to a large number of rural households (Eapen, 2005).
4.1.5 Location of RNF enterprises
Rural non-farm employment may be generated in villages or towns or even in
cities. Shand and Chew (1986) inform that 58 per cent of household heads and 84 per
cent of wives found some or entire of off-farm work in their own villages. This was
not true of their children for whom the proportion was far less. Shylendra and Thomas
(1995) have found that 71 per cent of the rural non-farm jobs were available within
the village and were mostly regular in nature. Every village, however, cannot create
non-agricultural jobs. Commuting from rural residences to urban work places has
been happening widely. Basant (1994) found that about 25 per cent of male nonagricultural workers in rural Gujarat commuted to urban areas for work. Basu and
Kashyap (1992) provide evidence to show that the growth of agro based activities like
cold storage facilities, sugar processing units; tomato ketchup units, etc. are located
more in small and medium towns than in villages. In fact, location of the units would

66
be a function of the nature of product, size of market, scale and agglomeration
economies (Papola, 1987; Saith, 2000).
Various micro level studies reviewed by Basu and Kashyap (1992) reveal that
temporary migration of labour force from rural to urban areas, particularly of
commuting variety accounts for a sizable portion of workforce in various economic
activities of the urban centres. A major share of such off-season employment is taken
by agricultural labour and small farmers. Studies by Shylendra and Thomas (1995)
and Gupta (1997) also reveal the importance and significance of earnings from
temporary/seasonal migration as source of rural livelihoods. Rural areas, thus, should
not be viewed as bounded spaces as far as the creation and expansion of rural nonfarm employment is concerned (Basu and Kashyap, (1992); Gupta, 2005). For self
employment component of rural non-farm employment, it has been observed that the
most common location is the residential houses. Some units are situated at
conglomerations of retail premises situated along side bus stops, cross-roads and
markets. These included tea/sweet shops, vegetable and karyana (dry goods) stores
and cycle repairs. Their overriding characteristic is their reliance upon high customer
throughout. Hawkers selling vegetables or trinkets, painters and building contractors
do not use a fixed location. In some of the situations, they refer to the address of a
hardware store or a shop selling building materials (Simmon and Supri, 1995, 1996).
4.1.6 Cyclicity of RNF employment
There are large swings in farm and non-farm employment over the agricultural
cycle. Chuta and Liedholm (1979) and Anderson and Leiserson (1980) informed that
farm and non-farm employment moved in opposite directions. Over the whole
agricultural cycle, non-farm work occupied a rough average of 40 per cent of working
hours; and during slack seasons, 75 per cent of working hours. Seasonal fluctuations
of this kind in farm and non-farm work are common in all agricultural regions.
Monsoon economy hypothesis (Choe, 1995) supposes that non-farm employment
should be counter-cyclical with respect to agricultural operation as it is substituting
the missing agricultural work during the off-season. In the same breath, Unni and
Unni (2005) claim that in the years of high growth of agricultural employment in rural
areas, the growth of non-agricultural employment is low and vice versa. However,
there is no period when non-farm employment disappears completely. And, thus, non-

67
farm employment does compete with farm employment during periods of peak
agricultural demand. Fabella (1986) theorized that non-agricultural pursuits are of two
types (i) those competing with agriculture for labour and (ii) those complementary
with agriculture. The latter are referred to as 'cyclical' and former as 'counter cyclical'.
'Cyclical' rural non-farm activities (RNAs) are of interest because they tend to be
linked with agriculture, not through the labour force but through the market demand.
During peak periods, employment is generally available in the rural areas and demand
for non-food items arises. Cyclical RNAs help to satisfy this demand. Counter
cyclical RNA, on the other hand, are labour supply induced phenomena. The
availability of surplus labour force swells the workforce for these types of RNAs. It
was observed that manufacturing, construction, commerce and transport activities by
male workers in rural areas are cyclically linked with farm activities, while the
government and domestic services are counter cyclical. It was also observed that the
female labour was always counter cyclical or neutral to the cycles of farm operations.
This may indicate the absence of linkages between farm and non-farm activities that
most women engage in rural Philippines. It also means that the involvement of males
in manufacturing, construction and commerce tend to be market demand determined
while that of women is labour supply determined. Thus, one may view the rural nonfarm sector as a source of meaningful employment in its own right, which may
develop and grow from various developmental linkages with agriculture and urban
based activities/industries, and after gaining maturity, between its own components.
4.1.7 Duration of RNF employment
Reardon (1997), in a review of a number of rural non-farm studies pertaining
to African continent, observed that in Africa non-farm income was a means for the
poor to stabilize income during drought years. Walker and Ryan (1990) observed that
in the semi-arid tropics in India, non-agricultural self employment was a means of
dampening household income variability. Hossain (2004), however, shows that
business, services, shop keeping and transport operations are relatively full time
occupations, while construction work and non-agricultural wage labour are relatively
part time occupations. Thus, the hypothesis that non-farm activities are undertaken for
seasonal smoothening of employment and income is valid only for a small fraction of
non-farm activities. The comparison of the number of work-days worked in 1987 and

68
2000 indicate that the duration of employment has increased over time, particularly
for trade and business, shop keeping and transport operations.

Ho (1986b) also

informed that in Taiwanese economy between 1960 and 1975, the growth in demand
for farm household labour for use in non-agricultural activities came, not from
traditional rural industries that employed farm workers during agriculturally slack
seasons, but from enterprises that required a regular labour force on a year-round
basis. Shand and Chew (1986) study of a rural Malaysian region also shows that in
1981, non-farm employment duration amongst the farm households' members was in
a range of from a month or less through to 12 months of continuous employment for
household heads and sons. By far the largest concentration was in the full time
category of 11 to 12 months.
4.1.8

Emerging and decaying of RNFS

Many researchers view that different rural non-farm activities show a distinct

but differentiated stages of growth (Oshima, 1986; Saith, 1992 and Start, 2001;
Otsuka, 2007). For example, Start (2001) claims that rural non-farm sector travels
through the distinct stages of 'growth', 'demise' and 'recovery'. In the traditional and
subsistence societies, stage one is characterized by high remoteness and low level of
urbanization; the rural non-farm activities emerge just to serve the agricultural
activities. The size of such RNF sector is small. In stage two, as the agricultural sector
grows, accompanied perhaps by growth in some other sectors, productivity increases,
agricultural surpluses emerge, rural income rises, fuelling rural non-farm activities
and thus expansion of RNF sector. As development proceeds, transport and
transaction costs come down and so do the costs of urban imports. The RNF sector
faces competition from urban-based mass produced goods and services, and the
erosion of protective barriers to rural markets spell the demise of the RNF sector. As
rural purchasing power grows, rural preferences shift towards modern, urban products
and services. The rural industrial activities shed their rural linkages and locations as
these are modernized or are competed away. Only sectors with real competitive
advantage survive. In stage four, finally, the same factors that led to the economies of
scale, proximity and agglomeration also gave rise to urban congestion, stretched
social and infrastructural resources and soaring costs. As the economic and social
costs of urban congestion grow, new kinds of RNF activities may develop, perhaps

69
benefiting from outsourcing and clustering arrangements. As ruralurban linkages
prosper, urban producers become increasingly more dependent on small, subcontracting and decentralized enterprises in both rural locations and small townships.
This, in turn, increases employment opportunities to the rural workers and producers
to link with the urban industries.
The growth, decay and recovery model, however, does not imply a sequential
process and homogenous pattern of RNF growth across countries and regions of a
country as different regions of a country may develop at different rates and many rural
locations would display varying degrees of all the four stages concurrently. The actual
position and mix will depend on the levels of agricultural development, rural incomes,
rural infrastructure, urbanization, etc. Further more, the transition from one stage to
another is often not a smooth and painless process. In the stage one, the artisans who
make ploughs, carts and other implements needed in traditional agriculture are at their
wits end when gets modernized. Having neither land nor capital, this segment of rural
society has been bypassed by the traditional strategies of agricultural intensification
and modernization (Singh, 1979). A large majority has joined the cadre of agricultural
labour (Gill, 1980) because in a caste-ridden traditional society, it is not easy for the
artisans to be resilient and shift to new and different professions. They usually do not
have the wherewithal to invest in new equipment and new skills (Sarma, 2004).
Sainath (2004, quoted by Sarma, 2004) narrates a heart-wrenching story of a village
carpenter in Nalgonda district of Andhra Pradesh who died of hunger, unable to make
both ends meet when the demand for his services collapsed as a result of
mechanization of agriculture in the village.
Otsuka (2007) compares Taiwan and South Korea experience to lay bare the
basic nature of rural industrial transformation in East Asia. He models the process of
rural industrialization in two stages. In stage I, rural industry consists of activities
based on households and small workshops in larger and central villages that produce a
wide range of locally consumed low quality commodities, which had been called Zgoods by Hymer and Resnick (1969). Rather than experiencing permanent demise of
rural industry predicted by Hymer and Resnick, however, the majority of East Asia
instead underwent a shift from stage 1 to stage 2 of rural industrialization in which
decentralized, small scale industries have played a major role in the development of

70
the overall economy for many decades. To explain this transition, Otsuka refers to the
concept of modern 'Z-goods' introduced by Renis and Stewart (1993) which are
distinct from the traditional Z-goods envisaged by Hymer and Resnick (1969).
The shift from traditional to modern Z-goods production took place during the
period from 1970 onwards. With shift from food processing to the production of metals
and machinery, specifically, the weight of the food processing cum beverages and
tobacco industry rapidly declined in rural areas. Meanwhile, the importance of heavy
industries and chemical industries in rural areas increased appreciably in both the
countries because these are new industries that are known to grow on imports and
assimilation of foreign technologies. Subcontracting arrangements played a key role in
stimulating light industries such as textiles, apparel, and footwear in South Korea. In the
later stage of rural industrialization, linkages with urban enterprises become much more
important. As forward and backward growth linkages from agricultural propelled much
of rural industries in the earlier phase, cooperation and coordination between rural and
urban enterprises became much more important in the later, but a more mature phase of
rural industrialization.
II
4.2

RNFS and empirical evidence from Punjab based on present study

In India, an analysis of NSSO data and Census 1981 data revealed that, for the

first time, a significant and sustained proportion of rural employment was observed
towards more diversified non-farm occupations. The percentage share of rural
workers employed in agriculture, which was 83.2 per cent in 1972-73, has come down
to 76.8 per cent in 1983. The movement towards non-farm employment was seen to
be more pronounced for the males than that of the females (Vaidyanathan, 1986;
Hazell and Haggblade, 1990; Dev, 1990; Unni, 1991).
Like everywhere, rural non-farm sector has grown significantly in Punjab too.
The NSSO data show that percentage of rural male workers engaged in non-farm
pursuits increased from 20.7 per cent in 1972-73 to 36.2 per cent in 1999-2000. It has
been found that on a usual status (ps+ss) basis, rural non-farm male workers in the
state of Punjab grew at a rate of 3.47 per cent per year during 1972-73 to 1977-78, at
2.62 per cent during 1977-78 to 1983, and at 7.58 per cent during 1983 to 1987-88.
During the decade of 1990s, the growth of RNF workers came down significantly.

71
Specifically, it grew at a rate of 1.85 per cent per annum during 1987-88 to 1993-94,
picking up to 2.81 per cent during 1993-94 to 1999-2000.
An engagement of 36.2 per cent of rural male workers in various non-farm
activities has placed the state of Punjab in the category of states of India having a
relatively high share of rural non-farm employment. However, share of female rural
non-farm workers in total female rural workers came down drastically from 33.2 per
cent in 1972-73 to 7.2 per cent in 1993-94. Even as late as 1999-2000, only 9.4 per
cent of rural female workers in the state were in non-farm employment (Bhaumik,
2002). Bhalla and Chadha (1983) and Chadha (1986) show how a dynamic
agricultural sector in Punjab is capable of generating a host of non-farm activities in
rural areas and involvement in them tends to improve the distribution of rural
incomes. Simmons and Supri (1995) found that more than 30 per cent of rural
workers were in non-farming activities. A study by Chahal et al., (1995) also found
that 38 per cent of rural workers were engaged in various non-farm activities.
Census 2001 data also shows the increasing tendency of rural workers in the
state to seek employment outside agriculture. By adding livestock and other
agricultural related activities as a component of rural non-farm sector [as suggested by
Saith (1992) and Papola and Sharma (2005)], then the dependence of rural main
workers on non-farm endeavours increased from 26 per cent in 1991 to 46 per cent in
2001 in Punjab. Such a huge increase in a period of 10 years has been a matter of
much discussion and debate (Ghuman, 2005). Ghuman et al. (2002) found only 6.7
per cent of rural male workers in non-farm activities. Not even a single female worker
in these activities was reported by the study. Besides, more than 90 per cent of the
self-employed workers in RNFS were found to be engaged in petty activities with a
low level of earnings. Sidhu and Toor (2002) and Rangi et al. (2002) analyzed various
other aspects of rural non-farm economy in Punjab. Ghuman (2005) found that only
around 16 per cent of rural workers were engaged in non-farm occupations. The study
concluded that the informal, private activities in RNFS could not generate
employment with reasonable level of earnings so as to equate with incomes earned
from cultivation by marginal and small farmers.
Notwithstanding the results of these micro studies, the fact remains that NSSO
(2000) and Census 2001 data point towards un-mistakable increased reliance of rural

72
workers in Punjab on non-agricultural occupations and by 2004-05, 46 per cent of usually
working rural persons in the state were employed in these occupations (NSSO, 2006).
4.2.1 Nature of RNF employment
In all sampled 24 villages, the census study found that 7660 workers were
engaged in various non-farm activities (Table 4.1). Of these, 30.61 per cent were
employed as casual workers. Another 30 per cent were in self employment activities.
Almost 16.70 per cent in the government/para-government employment; 16.46 per
cent as regularly employed in private organizations, factories, workshops, and
transport and service sector. Another shade of RNF workers were working in foreign
countries who sent remittances back fairly regularly or otherwise assist the parent
households in their quest for making investments in housing, land purchase and
gaining entry in relatively higher productivity yielding non-farm occupations. It is
clear that in rural non-farm employment in study villages, 33 per cent of workers were
employed as regular workers in a salaried capacity.
Table 4.1: Nature of rural non-farm employment in Punjab: all zones combined
Name of
Casual
Self
Regular / Salaried
Immigrants
Total
zone
labour
employment
Govt.
Private
Zone-I
Zone-II
Zone-III
Total

1131
626
588
2345
(30.61)

910
647
740
2297
(29.98)

536
420
323
1279
(16.70)

515
396
350
1261
(16.46)

248
197
33
478
(6.24)

3340
2286
2034
7660
(100.00)

Note: Figures in brackets denote percentage share.

Source: Field Survey.

Table 4.2 presents percentage share of each category of employment at the

zonal level. Casual employment is more in Zone I and least in Zone III. In fact, out of
casually employed, 48.31 per cent are in Zone I, 26.70 per cent in Zone II and 25.03
per cent in Zone III. Regular employment, immigrant workers and casual employment
are more in Zone I than Zone II than Zone III. As the Zone I is highly developed,
Zone II moderately developed and Zone III the least developed in terms of many
economic, social and demographical factors, it means that quality of employment
(indicated by share of regular employment) improves when one move from Zone III
to Zone I.

73
Table 4.2: Percentage shares of different kinds of rural non-farm employment in
sampled villages in Punjab
Employment type
Zone
All Zones
I
II
III
Casual work
48.31
26.70
25.03
100.00
Self employment
39.62
28.17
32.22
100.00
Regular (govt. & private)
41.38
32.12
26.50
100.00
Immigrant workers
51.88
41.21
6.90
100.00
Source: Field Survey.

4.2.2 Heterogeneity of RNF Activities

In the sample of 300 RNF households, 452 workers were found to be working
in 81 RNF activities. Such is the level of heterogeneity. Of these, 48 activities were in
the domain of self employment and the remaining 33 in wage-employment. In a study
of off-farm employment in Jalandhar district of Punjab, Simmons and Supri (1996)
found 53 RNF activities. It means that over a period of 10 years or so, the number of
activities have rather increased giving rise to more heterogeneity. Self employment
contains employment in such pursuits as flour mills, scooter/cycle, tractor workshops,
quilt filling, labour contractors, wheat-reaper trading, livestock trading, grain traders
or commission agents (Arhtiyas), transporters of various hues, and so on. Alongside
the traditional occupations like quilt filling, hair cutting, tailoring, sepi, etc., modern
activities like generators and auto repair shop, sound service, selling and repairing
mobile phones, labour contractor-ship are also there. The list of 48 self employment
activities is given in Annexure 4.1.
Similar variety is found in wage employment activities. Rural workers engage
themselves in all kinds of non-farm wage activities. If there are casual workers in
sweets making and construction activities, so are in modern professions like working
as plumbers, auto mechanics, turners, software engineers and so on. A complete list of
wage-labour activities is given in Annexure 4.2. Thus, traditional as well as modern,
caste based as well as secular; low skill - low return as well as high skill - high return
activities; all jostle for rural space engaging the illiterate, literate, unskilled, semiskilled and skilled workers.
4.2.3 Sectoral distribution of RNF workers
All the 81 non-farm activities have been classified into six broad industrial
groupings. Of all the sub-groupings, mining and quarrying is the smallest absorber of
rural workers. Only 0.22 per cent of these workers were found engaged in this sub-

74
sector. This is a reflection of a lack of minerals and other naturally-found materials in
the state. Manufacturing activity accounted for only 22.57 per cent of rural workers
(Table 4.3). It has been observed that the agricultural growth in Punjab has promoted
employment in services rather than in secondary sector. The main beneficiary of the
expanding rural market in Punjab has been the manufacturing activity in states other
than Punjab (Gill, 1983).
Maximum concentration of RNF workers in Punjab is in various services like
photography, hair-cutting/barber, tailoring, medicine shops, medical practitioners,
education, health, entertainment, government and private. The services are not all low
skilled-low return activities. As noted by Fisher, et al (1997), services in Punjab
provide high quality employment. Services activities in transport, education, health,
real estate and legal services all provide high returns.
Table 4.3: Sectoral composition of RNF workers in sampled villages in Punjab (Zone
wise)
Sectors

Sectors
Manufacturing,
Mining
Transport,
processing,
Trade &
and
Construction
storage &
commerce
servicing and
querying
communications
Zone
repairs
1
43
26
13
30
I
(0.52)
(22.16)
(13.40)
(6.70)
(15.46)
0
36
18
10
16
II
(0.00)
(26.87)
(13.43)
(7.46)
(11.94)
0
23
15
16
11
III
(0.00)
(18.55)
(12.10)
(12.90)
(8.87)
1
102
59
39
57
All
(0.22)
(22.57)
(13.05)
(8.63)
(12.61)
Notes: 1. Figures in brackets denote percentage share of workers in all sub-sectors.
2. Due to rounding up, totals may not add exactly to be 100.
Source: Filed Survey

Other
services

Total

81
(41.75)
54
(40.30)
59
(47.58)
194
(42.92)

194
(100.00)
134
(100.00)
124
(100.00)
452
(100.00)

It is also clear from Table 4.3 that services followed by manufacturing,

processing & repair, construction; transport, storage & communication are major
employers of RNF workers. Secondary sector including construction absorbed 35.62
per cent workers only. It is the tertiary sector which is of paramount importance. It
employs 64.16 per cent of all RNF workers in the state.
The Census 2001 data also reveals (Table 4.4) that 28.48 per cent of RNF
workers in the state were employed in manufacturing, processing, servicing and repair
activities. With mining and quarrying employing an insignificant 0.05 per cent and
construction having 11.86 per cent share, secondary sector activities had 41.34 per

75
cent of all RNF workers in the state and rest 58.66 per cent in tertiary activities.
Compared to this, the primary data, pertaining to the period 2009-10, show that
secondary sector employs only 35.62 per cent of RNF workers, whereas 64.16 per
cent workers are in tertiary sector. If one looks at Census figures since 1971 and
compares it with the primary data, one can find that secondary sector, including
construction, provided employment to 40 per cent workers in 1971 and 1981. During
the 1980s, it declined to 33 per cent, but again picked up in the 1990s, and in 2001, it
absorbed 40 per cent of workers in the rural areas of the state. However, in the first
decade of 21st century, there was a decrease in its share and by 2010; only 35.62 per
cent workers were found to be employed in the secondary sector.
Table 4.4: Sectoral distribution of RNF workers in Punjab: census vs. field data
(Figures in percentages)
Sectors
1971
1981
1991
2001
2009-10*
Mining and quarrying
0.0
0.12
0.0
0.05
0.22
Household industry
16.72
09.99
04.51
7.64
22.57
Other than household
15.90
22.32
21.28
20.84
industry
Construction
07.46
06.78
07.21
11.87
13.05
Trade and commerce
15.42
17.39
15.87
15.29
8.63
Transport, storage and
6.33
10.11
10.00
8.50
12.61
communications
Other services
38.15
33.30
41.11
35.86
42.92
Total
100.00
100.00
100.00
100.00
100.00
Note: *Figures are from field survey.
Source: Census, 1971, 1981, 1991, 2001.

Construction activities did not register any increase in employment till 1991
and remained pegged up around 7 per cent per year. However, it increased
subsequently and in 2001, 11.87 per cent of workers were engaged in these activities.
By the end of first decade of the new century, 13.05 per cent of rural workers were
having employment in it. Trade and commerce remained stagnated during 1971-2001.
Subsequently, it declined in importance also. From 15.29 per cent share in 2001, now
its share decreased to 8.63 per cent subsequently period.
Transport storage and communication absorbed 6.33 per cent of rural workers
in Punjab in 1971; during the next 30 years, it remained stagnant at 9.5-10.0 per cent.
However, in the subsequent period, it started gaining importance and in 2009-10, it
employed 12.61 per cent of rural workers. Thus, during the last 40 years, the share of
this sub-sector in rural employment more than doubled. Service sector remained in the

76
range of 33 per cent to 41 per cent during 30 years till 2001. Subsequently, it
increased its share by more than 7 percentage points.
Rural industries including repairs and processing remained in the range of 26
per cent to 32 per cent. Subsequently, however, these activities declined in
importance. In the rural non-farm sector, it is this component which gets maximum
attention of development planners, practitioners and academicians, but does not seem
to absorb even one-fourth of rural workforce in the state. It is the tertiary sector which
has gained importance as far as employment of rural workers in RNF sector is
concerned.
4.2.4 Location of RNF work opportunities
Table 4.5 shows how the RNF workers across 300 sampled households engage
themselves in various activities. It found that 212 out of sampled 452 workers were
employed in non-farm activities located in their villages. That is, almost 47 per cent of
RNF workers were employed locally. The workers who got employment within the
village, 41.04 per cent of them were in 'other services', and slightly more than onefifth (20 per cent) were in manufacturing, processing and repairs. Another 14.62 per
cent of these locally employed workers were in transport, storage and communication
and 12.26 per cent each in construction and trade and commerce sub-sectors.
Table 4.5: Distribution of RNF workers as per location and activity in the sampled
villages in Punjab
Sectors
Local
Commuters
Others
Total
Mining and quarrying
Manufacturing, processing,
servicing and repairs
Construction
Trade and commerce
Transport, storage and
communications
Other services
Total

0
(0.00)
43
(20.28)
25
(11.79)
26
(12.26)
31
(14.62)
87
(41.04)
212
(100.00)
(46.90)

1
(0.54)
39
(21.20)
33
(17.93)
13
(07.07)
17
(9.24)
81
(44.02)
184
(100.00)
(40.71)

0
(0.00)
19
(33.93)
1
(1.79)
0
(0.00)
9
(16.07)
27
(48.21)
56
(100.00)
(12.39)

Note: 'Others' include rural workers in defence services, in foreign countries etc.
Source: Field Survey

1
(0.22)
101
(22.35)
59
(13.05)
39
(8.63)
57
(12.81)
195
(43.14)
452
(100.00)
(100.00)

77
Further, as many as 184 out of 452 workers (40.71 per cent) daily commute to
their work places from their residences. Another 12.39 per cent of rural workers were
employed at far away places from their villages. These include workers in defence
services. At one point of time, the defence services, after the farming, was the most
preferred profession among young men of peasantry stock. The other main component
of 'other services' category is immigrant workers. Quite a number of workers from
rural Punjab work in countries like Dubai, Qatar, UAE, South Korea, Libya, and so on
went on temporary work-visas. Most of these workers are engaged in manual jobs like
driving, masonary and other construction related jobs. After three years or so, when
their work visas expire they come back. Many workers were found again getting
ready for these countries after spending two-three months with their families. Almost
none take their families along to these countries. One of the respondents replied that
families do not get visas and even if the families do get the permission, there was not
enough money for savings. However, the life style of immigrants' families was much
better than locally working average households of the same land owning classes.
Slightly rearranging the information provided in Table 4.5, one can find out
whether the employment generated by various sub sectors of RNF is available locally
or workers have to commute to have it. Table 4.6 highlights that construction is one
activity which needs substantial commuting. Almost 56 per cent of all workers
engaged in it are the commuters. Activities clubbed in 'other services' are too highly
located in nearby urban towns or mandi towns. 41.54 per cent of workers in it have to
commute. Other sub sectors requiring commuting are manufacturing, processing,
repair and services (38.64 per cent); trade and commerce (33.37 per cent); and
transport, storage and communications (29.82 per cent). The activities in which
employment is predominantly locally available are trade and commerce (66.67 per
cent); transport, storage and communications (54.39 per cent); other services (44.62
per cent); and manufacturing related activities (42.57 per cent).
Table 4.6: Location of RNF employment at sub-sector level in the sampled villages in
Punjab
Activity
Total
Local
Commuters
Others
Mining and quarrying
Manufacturing,

0
(0)
43

1
(100.00)
39

0
(0)
19

1
(100.00)
101

78
processing, servicing and
repairs
Construction
Trade and commerce
Transportation, storage
and communications
Other services
Total

(42.57)

(38.61)

(18.81)

(100.00)

25
(42.37)
26
(66.67)
31
(54.39)
87
(44.62)
212
(46.90)

33
(55.93)
13
(33.33)
17
(29.82)
81
(41.54)
184
(40.70)

1
(1.69)
0
(0.00)
9
(15.79)
27
(13.85)
56
(12.39)

59
(100.00)
39
(100.00)
57
(100.00)
195
(100.00)
452
(100.00)

Note: Figures in brackets denote Percentages

Source: Field Survey.

4.2.5 Mode of commuting

Affordable and easy transport facility is pre-requisite for the promotion of
promote RNF activities in any region. Presently every village, even the remotest as
well as the tiny villages in Punjab, is connected by all-weather metelled roads. As
early as in 1980-81, 98.47 per cent of all the inhabited villages were connected with
rural link roads (Statistical Abstract of Punjab, 1981). No village in the state now is
unconnected to a road. In fact, central villages and mandi towns have a web of rural
roads connecting these to villages in hinterland. Good roads coupled with affordable
bus transport facilities make the journey to work places easier. An increasing number
of passenger vehicles of all kinds like buses, station wagons, cars, jeeps, taxies,
three/two wheelers, etc. from 92,364 in 1975-76 to 1,77,173 in 1980-81 and further to
23,75,675 in 2000-01 and 34,29,108 in 2005-06 (Statistical Abstracts of Punjab, 1981;
2006) supported incresing intensity of transportation in Punjab. Obviously, such a
large number of passenger vehicles of all hues coupled with connection of every
village with link roads make journey of workers as well as goods and services from
the villages to the urban areas/mandi towns and back to the villages much easier and
comfortable.
Out of all daily commuters, it was found that commuting by bus was the most
common mode as nearly 37 pr cent travelled by buses, both public and private (Table
4.7). Commuting by motorcycle/scooter is another common mode of travel used by
rural workers to their workplaces. About 32 per cent of all commuters use this mode
of transport. Workers employed in high-end activities on a salaried/regular basis like
in the education and other government departments mostly use this mode. Many high

79
end earmers used cars/jeeps for commuting. On the other hand, workers engaged as
manual labourers in nearby urban areas and mandi towns in the construction,
manufacturing & repairs activities and in low-end regular wage employment use
bicycles to reach their places of work. The study found a number of workers from
village Chunni Kalan cycling the distance of 22 kilometers to Chandigarh for work in
various services and construction related activities in Chandigarh and also as manual
workers in industrial units located in the town of Mohali. This mode is the most
arduous and backbreaking. But, in the absence of sufficient RNF job opportunities in
the villages itself; the workers have to do it to survive. On the whole, 26.63 per cent
RNF workers used cycle as a mode of traveling to workplaces.
Table 4.7: Mode of traveling of commuter RNF workers in the sampled villages in
Punjab
Activity

0
12

Mode of Traveling
Scooter/
Motor Cycle
0
1
19
8

25
0
0

6
6
12

1
7
4

1
0
1

0
0
0

33
13
17

12

25

37

81

49
(26.63)

68
36.96)

58
(31.52)

3
(1.63)

6
(3.26)

184
(100.00)

Cycle

Mining and quarrying

Manufacturing,
processing, servicing and
repairs
Construction
Trade and commerce
Transportation, storage
and communications
Other services
Total

Bus

Train

Car

Total

0
0

0
0

1
39

Note: Figures in brackets denote Percentages.

Source: Field Survey.

4.2.6 Cyclicity with agricultural operations

As reported earlier (Table 4.1), nearly one-third of rural workers (33.16 per
cent) are engaged in various non-farm activities on regular basis. They get salary on a
monthly basis. Another 29.98 per cent are in self employment endeavours. Their
employment is hardly related to or effected by seasonality of agricultural operations.
It is only the casually employed workers who are affected by the peaks and roughs of
agricultural operations.
The case of Darshan Singh is worth quoting. He is a waste paper/waste
material picker belonging to village Poohli in Nathana block. The workers like him
are known as Kabarias in local language. The nearest town to the village Poohli is
Bathinda - about 17 kilometers away. Darshan Singh picks the rag, collects it near his

80
house and then transports it to a Bathinda middleman who further sells it to a paper
recycling unit. He does not get employment on a daily basis. Some times, work is
available only for 10 days in a month. In the wheat harvesting season and cotton
picking season, he along with his wife and mother engage in the agricultural
operations. But wage rate, even in high demand agricultural seasons, is not more than
Rs. 150 per day. He informed that even in these, he prefers rag picking because, first,
he earns more money from it; and second, he gets the money from the middleman the
same day he delivers the load.
Wages in some agricultural operations, for example, in cotton-picking, are still
paid in kind. The daily wage is some part of the total a worker or a group of family
workers pick cotton in one day. He says that to get the wages from the farmers is very
difficult. Sometimes, they send them back without any payment. It is mostly received
only after the farmer sells the produce. He said that there is no dignity in it he has to
sit in the courtyard of the farmer begging for the wages for the labour already
performed. The regularity with which wages are received from non-farm employers
and dignity with which they are given are major factors which tend to break the
cyclicity of non-farm operations in relation with agricultural seasonality.
Furthermore, the regular employees in government as well as in private
sectors have to work irrespective of the demands of agriculture. Though, the
government employees were found to supervise agricultural operations after they
come back from their jobs or on Sundays and other holidays, yet their primary time is
spent on non-farm activities. This factor also breaks the counter cyclicity of non-farm
work with agricultural work. A respondent in village Chuni Kalan informed that every
year during sowing/plantation and harvesting seasons, he takes leave from his regular
teaching job to attend to the farm operations. Once these are done, he only supervises
the fields after coming back from his job. But, only regular workers with land holding
engage in this sort of activity. Landless regular employees have neither the inclination
nor motivation for getting into farm work along with their regular jobs.
4.2.7 Intensity of RNF employment
It has been reported that a significant per cent of rural workers engage in nonfarm activities on a seasonal or part time basis (Chuta and Liedholm, 1979; Reardon
et al., 2001). Some studies (Reardon, 1997; Walker and Ryan, 1990) have also

81
reported that non-farm incomes were a means to stabilize household incomes during
drought period. However, in our sample of 334 rural non-farm wage labourers, a large
majority was found to work for more than 20 days in a month. This was true for both
the regular/salaried and casually employed workers.
Table 4.8 reveals that only 2.40 per cent of rural workers had work for less
than 10 days. Another 14.67 per cent worked for 10 to 20 days. An overwhelming
population of workers (82.93 per cent) had worked for 20 or more days in a month.
Table 4.8: Intensity of wage labour (casual + regular) in RNF activities
Zones

Number of working days in a month

Less than 10
10-20
20 and above
Zone I
3
15
133
(1.99)
(9.93)
(88.08)
Zone II
2
20
81
(1.94)
(19.42)
(78.64)
Zone III
3
14
63
(3.75)
(17.50)
(78.75)
Total
8
49
277
(2.40)
(14.67)
(82.93)
Note: Figures in brackets denotes percentage share.
Source: Field Survey.

Total
151
(100.00)
103
(100.00)
80
(100.00)
334
(100.00)

By taking into account employment intensity separately for casual workers,

one can see that out of 208 casually employed workers, 159 workers, i.e., 76.44 per
cent, had full time work. 42 workers (20.19 per cent) were found to have work for
three weeks in a month. Only three workers were found to have work for less than one
week in a typical month. It is worthwhile to mention that the survey on the
employment intensity was conducted in the months of December and January
(agriculturally lean months) and in April and May (wheat harvesting period). Thus,
even casually employed workers had full time work. The present study also supports
the findings of Hossain (2004) and Shand and Chew (1986).
It is, thus, clear from the foregoing discussion that rural non-farm employment
in Punjab has acquired a significant place. Almost 59 per cent of households in all the
24 villages sampled from all over the state have one or more workers depending upon
non-farm activities. Only 41 per cent of rural households depend solely upon farming
for their livelihoods. Similarly 51.49 per cent of main workers are primarily dependent
upon non-farm activities with slightly more than 48 per cent of workers depending
purely upon farming activities. More than 55 per cent of an average household income
was contributed by the non-farm sources. These results are in tune with results given by

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Chahal et al., (1995), Simmons and Supri (1997), Census 2001 and NSSO (2000, 2006).
The rural Punjab is, thus, experiencing a transition from farm to non-farm economy
both in terms of employment and income generation.