Exam 19: Rural Development

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The rural-urban divide is becoming increasingly blurred. In multi-locational households, members reside in or move between various communities, economic sectors, and even states, blurring rural-urban identities. This also makes remittances increasingly important in rural development and has equalled and even surpassed national investment and ODA. It has policy implications, prioritizing migration policies and financial systems to facilitate transfers. The blurred rural-urban divide also means that policies assuming agricultural productivity will drive increased consumption of non-agricultural goods needs to be re-evaluated. "Rural" may be a useful special designation, but the range of livelihood strategies now pursued in rural areas challenges rural and urban designations based on economic activities.

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First, even with recent upward pressures on food prices, the real price of every agricultural commodity has fallen steadily over the long term, making the profitability of agriculture as a business questionable in the absence of subsidies. For example, even accounting for recent price spikes, world cereal prices are nearly 50 per cent lower in real terms than in 1960. This may be advantageous for net food buyers but is not likely to benefit food producers, since the prices of inputs, such as fertilizers, have increased substantially relative to outputs over the same period. Second, agriculture in many parts of the globe confronts environmental limitations, particularly in terms of soil and water. Third, and clearly as a consequence of the first two points, diversification out of agriculture appears to be widespread and increasing, even in dynamic rural economies.