Rural Industrialisation

Economic activity in the rural milieu revolves around the exploitation or utilization of land. It centres
principally on farming, animal husbandry, poultry, fishing, forestry, food processing and cottage
industry. It has been estimated that agricultural activity occupies four-fifth of the rural population in
Nigeria.
What are the common properties of rural areas
Firstly, rural life and economical activities within these countries are significantly based on natural
resources, especially agriculture. Secondly, the economical, social and cultural development is much
slower than urban parts of the countries. Thirdly, traditions have a significant effect on the life styles
and rules of the rural communities. Technological adoption and advancement in production and its
reflectance on rural life is spread over many years. People of the rural communities have much
wider face to face relations. And finally, social security opportunities such as employment, health,
insurance, retirement, communication, education, cultural activities, etc. are poorer within the rural
parts of these countries in general.
For a sustainable rural development in these countries, natural resources, such as land, water, plant
and animal genetic resources, should be properly managed and conserved, human needs for present
and future generations should be satisfied, ensured, technological and institutional change should
be oriented accordingly. It is also important to mention that such sustainability should be
environmentally non-degrading, technically appropriate, economically viable and socially acceptable.

The problems of rural areas

The most significant problems in the region are; poverty, migration to the cities, lack of appropriate
infrastructure, size and fragmentation of farms. Decrease in employment
Migration of rural population to urban areas
Increase in poverty
Underutilization of resources
Shut down of traditional businesses
Lack of government policy to regulate the rural business. To address all these problems rural
industrialization is the solution. Rural industrialization will help talented local youth to get the
employment, utilization of available resources, creating new business dimensions and to support the
rural economy as a whole.

Definition of Rural Industrialization

Rural areas required promotion of small scale industries which are more related with the expertise
of rural people,available resources and expansion of existing traditional businesses. There is a need
of theestablishment of the industries in rural areas which must not affect the rural eco-system
alongwith local businesses. It must promote local expertise, employment generation,
incomegeneration and utilization of available resources. Rural industrialization means focus on
promoting the rural based industries by involving local people, resources and expertise or exploring
the new business opportunity related with available resources in that particular rural area or cluster
in a professional way. Primary beneficiary must be local farmer, artisan and labour in small or
medium enterprise establishment in the rural areas and also support the local eco-system and
economy.
The basic purpose of rural industrialization is to create alternate model for overall development of
rural society to avoid over dependency on farming by utilizing available opportunities to establish
small and medium industries. Rural industrialization must not link with establishments of heavy
industries or machinery but to promote rural entrepreneurship at local level in a professional
manner by enhancing skills and knowledge of local people.

Types of Rural Industry

There are various types of rural industries possibilities present in the rural areas are:
Agro based industries
This industry is related with the processing of agro productslike jiggery and sugar production from
sugarcane, wine production from grapes, Cloth production from cotton, fruit juice production, oil
from oilseeds and other related processing from raw agro products.

Forest based industries

There are possibilities to establish industries related to wood products, bamboo products, honey,
preparing manure from plant leaves, herbal medicines production and others.

Mineral based industries

After exploring for the minerals in rural areas proper utilization is required by establishment of its
processing unit nearby the concerned rural area. It also helps to minimize the initial cost of
transportation to other processing units.

Traditional industry
Traditional industries like handicraft and other local artisan product manufacturing are having
immense potential to become professionally managed small and medium industries. There is a
considerable high demand in the market for traditional handicraft products and a tie-up in between
local artisan and private SMEs can create a scope for small or medium scale industry in the rural
areas for better growth.

Dairy Industry
Production of milk and milk products on large scale can create a space for organized milk industry in
rural areas where milk production is high

Renewable Energy Industry

Rural areas can be converted into industry hub for producing renewable energy by setting up solar
cell units, bio-gas plants, gobar gas plants and other use of alternative energy commercially.

OPS (Opportunities, Problem identification & Solution) Approach

OPS approach is one of the suggestions to rural entrepreneurs or an individual who wanted to kick
start business in rural based industry. Explore the various opportunities and alternatives present in
setting up a new industrial unit. It requires creative approach to identify the opportunity exist in the
rural business environment. Problem identification is the next step to identify the problem area and
its nature. Is problem external to the organization or internal to the organization? If problem of the
business is related with government policy it is external and if it is internal it may be related with
strategic issue or operational issue or related with functional issues to set up an industrial unit. To
identify the exact nature of business helps to solve it accordingly. After identification of the problem
next and final step is to provide the possible solutions available to the problem. If problem is related
with government policy then to communicate and liaison with government officials to amend the
existing policy or prepare a new policy to smoothen the business establishment process especially
for rural entrepreneurs. OPS approach helps an entrepreneur especially neo-rural entrepreneur to
explore opportunities include the scanning of the environment to explore the possibilities to start
the new venture or to support the already established business in more professional manner.
Identify the exact nature of the problem, after identification of the problem it is easier to utilize the
opportunities available in the market to explore further. It can be understand through one actual
case that how a local rural entrepreneur identify the problem and explored the opportunity and
then come up with a new business venture.
In what ways can Mechanization serve as acatalyst for rural development in Sub Saharan Africa?
Modernising and intensifying agricultural production systems is a crucial step towards ending global
poverty. Here, mechanisation has a significant role to play, at all levels along the entire value chain.
Agriculture accounts for about 50 per cent of gross domestic product in Africa. Most of the
population – 80 per cent in fact – works in agriculture. Strong population growth is putting
tremendous additional pressure on the farming sector. Moreover, not only is the urban population
growing apace (more people in now live in the cities than on the land) but the rural population is
ageing: young people and the educated are migrating to the cities to seek new opportunities and to
earn money. As the urban population grows, consumer spending habits also change. People’s
appetite for protein in the form of meat and fish is soaring, particularly in many Lower Middle
Income Countries (LMICs).Consequently the demand for agricultural commodities is also rising.
Agricultural productivity in Africa is largely stagnating, and current supplies are unable to keep pace
with the increasing demand. Higher prices could, however, act as an incentive for food producers to
step up their output. These incentives would call for investment in infrastructure, education and
service provision. Likewise, functioning institutions are indispensable if the rural population is to
have access to natural resources (land,water), along with the capital they need to invest, and
knowledge provided by agricultural advisory services. Further research into efficient cultivation
methods, improved crop varieties and effective farm inputs is required, while more work is needed
to improve the diffusion of promising technologies (including mechanisation options)
As a major agricultural production input and a catalyst for rural development, mechanisation
endeavours to:
 increase the performance and efficiency of farming activities,
 create jobs (entrepreneurship) and sustainable rural livelihoods,
 promote agricultural development-led industrialisation and markets for rural economic
growth,
 improve the quality of primary and processed goods,
 improve working conditions and raise living standards.
Mechanisation has a significant role to play at all levels along the entire value chain in terms of
modernising and intensifying agriculture; it creates employment in rural areas – a core element of
rural development – and ultimately leads to food security.

At production level, mechanisation is the key operational input for improving the productivity of
both labour and land. Machinery efficiently prepares the land for planting without the physical
workload, and at the same time ensures that production inputs are used effectively, so that the
harvest is of good quality and quantity. Taking advantage of mechanisation at the growing, storage
and processing stages also reduces post-harvest losses. A current study on post-harvest losses of
potatoes shows that 95 percent of potato damage and loss take place at production level and can be
ascribed to inadequate harvesting technology and farmers’ lack of knowledge.

At post-harvest and storage level, a large proportion of production is lost because of improper
handling and poor storage capacity. Good storage facilities in the form of silos and cooling systems
help to reduce food losses and, by allowing farmers to sell their products later, help them fetch
higher prices. Such facilities also play a crucial role in the context of food preservation and food
security.

Mechanisation and structural change

There is no doubt that if mechanisation is to make a positive contribution to modernising and
intensifying agriculture, then it must be introduced correctly. This means it must match local
conditions, conserve natural resources and the environment, and increase production. Taking
Germany as an example, today only 1.6 percent of the working population is employed in
agriculture, forestry and fisheries, but one in nine jobs is associated with agri-business (upstream
and downstream sectors). Over the last few decades, quality and processing of the food have
improved dramatically. The huge rise in productivity is a result of labour-saving, highly efficient
equipment and the mechanisation of agriculture.
The use of capital-intensive forms of production is thus considered the most important reason
behind the fast-paced structural change in farming. To fund this equipment it was vital in Germany
that cooperative associations and machinery rings were established. Machinery rings aimed at using
the available machinery to capacity and developing additional sources of income have evolved in
many regions. They have become a significant economic factor and have also created jobs in the
service industry (maintenance and repairs, operation).
Worldwide trends clearly show that there are strong correlations between economic growth and
mechanisation; countries which have experienced economic growth during the past 30 years and are
tackling their hunger problem have also forged ahead with the mechanisation of agriculture.
Countries where economic growth rates have been poor and poverty has remained high, however,
have also lagged with agricultural mechanisation.

The low levels of mechanisation and professionalisation of the agricultural sector are worrying. From
the point of view of development policy, the solution clearly lies in formulating – and implementing
– a national mechanisation strategy which is embedded in national agricultural policy. In the
Philippines, for example, the Ministry of Agriculture pursues a mechanisation strategy which aims to
increase the productivity and incomes of small farmers. Under this scheme, production machinery
and post-harvest equipment are purchased from the National Rice Program budget and made
available to qualified farmers’ groups, cooperatives and communities.

In many cases, however, mechanisation still fails due to a lack of funding opportunities. Individual
farmers are not in a position to purchase the expensive machinery on their own. Moreover, in many
African countries lack of access to land poses a huge problem, because this means that there is no
chance of farmers obtaining credit. Frequently the available technology does not match local
conditions and farmers’ requirements, and the farmers themselves are poorly organised. There is a
great need for financial services to be made available to small farmers, and for cooperatives to be
structured to make them an attractive option, thus allowing access to machinery. Training courses
and organisational advice should also be made available to those wanting to upskill. The active
participation of the private sector is further essential, for instance by providing after sales services
(training, repairs,etc.).