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Rural economics is the study of ruraleconomies. Rural economies include bothagricultural and non-agricultural industries, so rural economics has broader concerns thanagricultural economics which focus more onfood systems.[1]Rural development[2] and finance[3] attempt to solve larger challenges within rural economics. These economic issues are often connected to the migration from rural areas due to lack of economic activities[4] andrural poverty. Some interventions have been very successful in some parts of the world, withrural electrification andrural tourism providing anchors for transforming economies in some rural areas. These challenges often create rural-urban income disparities.[5]
Rural spaces add new challenges for economic analysis that require an understanding ofeconomic geography: for example understanding of size and spatial distribution of production and household units and interregional trade,[6]land use,[7] and how low population density effects government policies as to development, investment, regulation, and transportation.[8]
Rural development is the process of improving thequalityof life and economicwell-being of people living inrural areas, often relatively isolated and sparsely populated areas.[9] Often, rural regions have experiencedrural poverty, poverty greater than urban or suburban economic regions due to lack of access to economic activities, and lack of investments in key infrastructure such as education.
Rural development has traditionally centered on theexploitation of land-intensivenatural resources such asagriculture andforestry. However, changes inglobal production networks and increasedurbanization have changed the character of rural areas. Increasinglyrural tourism, niche manufacturers, andrecreation have replaced resource extraction and agriculture as dominant economic drivers.[10] The need for rural communities to approach development from a wider perspective has created more focus on a broad range of development goals rather than merely creating incentive for agricultural or resource-based businesses.
Education,entrepreneurship, physical infrastructure, and social infrastructure all play an important role in developing rural regions.[11] Rural development is also characterized by its emphasis on locally produced economic development strategies.[12] In contrast to urban regions, which have many similarities, rural areas are highly distinctive from one another. For this reason there are a large variety of rural development approaches used globally.[13]Rural electrification is the process of bringingelectrical power torural and remote areas. Rural communities are suffering from colossalmarket failures as thenational grids fall short of their demand for electricity. As of 2019, 770 million people live without access to electricity – 10.2% of the global population.[14]Electrification typically begins in cities and towns and gradually extends to rural areas, however, this process often runs into obstacles in developing nations. Expanding the national grid is expensive and countries consistently lack the capital to grow their current infrastructure. Additionally,amortizingcapital costs to reduce theunit cost of each hook-up is harder to do in lightly populated areas (yielding higherper capita share of the expense). If countries are able to overcome these obstacles and reach nationwide electrification, rural communities will be able to reap considerable amounts of economic and social development.
Rural flight (also known as rural-to-urban migration, rural depopulation, or rural exodus) is themigratory pattern of people fromrural areas intourban areas. It isurbanization seen from the rural perspective.
Inindustrializing economies likeBritain in the eighteenth century orEast Asia in the twentieth century, it can occur following theindustrialization ofprimary industries such asagriculture,mining,fishing, andforestry—when fewer people are needed to bring the same amount of output to market—and relatedsecondary industries (refining and processing) are consolidated. Rural exodus can also follow an ecological or human-caused catastrophe such as a famine or resource depletion. These are examples ofpush factors.
People can also move into town to seekhigher wages,educational access and other urban amenities; examples ofpull factors.
Once rural populations fall below acritical mass, the population is too small to support certain businesses, which then also leave or close, in avicious circle. Services to smaller and more dispersed populations may beproportionately more expensive, which can lead to closures of offices and services, which further harm the rural economy. Schools are the archetypal example because they influence the decisions of parents of young children: a village or region without a school will typically lose families to larger towns that have one. But the concept (urban hierarchy) can be applied more generally to many services and is explained bycentral place theory.
Government policies to combat rural flight include campaigns to expand services to the countryside, such aselectrification ordistance education. Governments can also use restrictions likeinternal passports to make rural flight illegal. Economic conditions that can counter rural depopulation includecommodities booms, the expansion ofoutdoor-focused tourism, and a shift toremote work, orexurbanization. To some extent, governments generally seek only to manage rural flight and channel it into certain cities, rather than stop it outright as this would imply taking on the expensive task of building airports, railways, hospitals, and universities in places with few users to support them, while neglecting growing urban and suburban areas._-_Poor_Woman_of_the_Village.jpg)
Rural poverty refers to situations where people living innon-urban regions are in astate or condition of lacking the financial resources and essentials for living. It takes account of factors ofrural society, rural economy, andpolitical systems that give rise to the marginalization and economic disadvantage found there.[17] Rural areas, because of their small, spread-out populations, typically have less well maintained infrastructure and a harder time accessing markets, which tend to be concentrated in population centers.
Rural communities also face disadvantages in terms of legal and social protections, with women and marginalized communities frequently having a harder time accessing land, education and other support systems that help with economic development. Several policies have been tested in both developing and developed economies, including rural electrification and access to other technologies such as internet,gender parity, and improved access to credit and income.
In academic studies, rural poverty is often discussed in conjunction withspatial inequality, which in this context refers to the inequality between urban and rural areas.[18] Both rural poverty and spatial inequality are global phenomena, but like poverty in general, there are higher rates of rural poverty indeveloping countries than indeveloped countries.[19]
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Eradicating rural poverty through effective policies and economic growth is a continuing difficulty for the international community, as it invests inrural development.[19][21] According to the International Fund for Agricultural Development, 70 percent of the people in extreme poverty are in rural areas, most of whom aresmallholders oragricultural workers whose livelihoods are heavily dependent on agriculture.[22] These food systems are vulnerable to extreme weather, which is expected toaffect agricultural systems the world over more as climate change increases.[23][24]
Thus theclimate crisis is expected to reduce the effectiveness of programs reducing rural poverty and causedisplacement of rural communities to urban centers.[23][24]Sustainable Development Goal 1: No Poverty sets international goals to address these issues, and is deeply connected with investments in asustainable food system as part ofSustainable Development Goal 2: Zero Hunger.[25][26]Agricultural economics is an applied field ofeconomics concerned with the application of economic theory in optimizing the production and distribution offood andfiber products.
Agricultural economics began as a branch of economics that specifically dealt withland usage. It focused on maximizing thecrop yield while maintaining a goodsoil ecosystem. Throughout the 20th century the discipline expanded and the current scope of the discipline is much broader.Agricultural economics today includes a variety of applied areas, having considerable overlap with conventional economics.[27][28][29][30] Agricultural economists have made substantial contributions to research in economics,econometrics,development economics, andenvironmental economics. Agricultural economics influencesfood policy,agricultural policy, andenvironmental policy.| Part ofa series on |
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Rural tourism is a form oftourism that focuses on actively participating in a rural lifestyle. It can be a variant ofecotourism, emphasizing sustainable practices and community involvement. Many villages can facilitate tourism because of the hospitality and eagerness of villagers to welcome or host visitors. The mechanization of agriculture has reduced the need for manual labor, leading to economic pressures on some villages and prompting young people to migrate tourban areas. However, a segment of the urban population is increasingly interested in visiting rural areas to experience and understand the rural lifestyle.
In developed nations, rural tourism can play a significant role in local economies. In theUnited States, niche tourism programs such as wine tours,agritourism, and seasonal events are prominent in rural areas. These tourism activities contribute to rural community development and provide economic benefits, including job creation and support for local businesses.
Community ecotourism is a related concept that focuses on responsible travel to natural areas, conserving the environment, and improving the well-being of local people. Organizations likeTIES promote sustainable practices that benefit both hosts and tourists. Community ecotourism empowers local communities by involving them in tourism planning and operations, ensuring that economic, social, and environmental benefits are maximized.
