The share of the nonfarm sector in the rural economy, including small towns and villages, varies from one country to another but falls in the range of 20 to 50 percent of the labor force. In addition to full-time employment, it provides supplemental income for farm households. Rural industries and trade provide a link not only with agriculture but also with the urban sector. For example, rural industries produce implements, inputs, and consumer goods for farm families, but they often have strong ties with urban industries as well. They may produce components for the products of large urban factories or, conversely, assemble or finish products from parts manufactured in urban factories.
Farm workers seek nonfarm employment during both good and bad times for agriculture.
When farm incomes rise, demand for consumer goods and services also rises, drawing workers to the nonfarm sector. Both economywide and sector-specific targeted policies are needed for growth of rural nonfarm enterprises. These policies should aim to remove barriers to trade and other disincentives by reducing or simplifying domestic, import, and export regulations. They should also help provide access to credit, markets, and research and development efforts. Islam concludes that technical assistance in marketing, management, and accounting is best when it is tailored to the needs of a cluster of enterprises producing similar goods and services.