This paper assesses the role of the non-farm sector in rural development in Lesotho. Evidence from studies in developing countries indicates that agriculture was formerly used as the main source of livelihood for many people in poor countries. However, due to the decline in agricultural productivity (which results in poverty and food insecurity) caused by unfavourable agroclimatic conditions, many people are turning to non-farm activities as a means of making a living. Therefore, non-farm incomes are used to provide the means of sustenance for many people. However, little attention has hitherto been paid to improving the rural non-farm sector as an alternative or complementary rural development strategy in Lesotho. This research paper uses quantitative research methods to analyse the available data. The main research findings suggest that many people make a living out of non-farm incomes. As a result, this paper proposes that the rural non-farm sector should be given more priority by the government in rural development in Lesotho.

Purpose This paper aims to study the different factors that determine the performance or success of small-scale, non-farm enterprises in Lesotho. Evidence shows that small-scale enterprises in developing countries are confronted with different challenges and problems that make them less viable. As a result, the capacity of small-scale, non-farm enterprises in employment creation, income generation and providing the means of livelihood to the poor people is not significant. In Lesotho, many people who are retrenched from the South African mines are absorbed in small-scale, non-farm enterprises to make a living. However, small-scale enterprises are faced with different challenges. The research findings suggest that factors leading to success/performance of rural non-farm enterprises in Lesotho include gender of the entrepreneur, age of the entrepreneur, ability of the entrepreneur to establish wider social networks, large population/market, availability of communication networks and infrastructure, participation of enterprises in the international market and costs of doing business and competition. In this regard, the paper makes policy recommendations that can be used to improve performance/success of small-scale, non-farm enterprises. Design/methodology/approach This research uses both qualitative and quantitative research methods to analyse data. Findings The main finding of the research is that foreign competition hinders the success of non-farm enterprises in Lesotho. The research findings further reveal that enterprises owned by women make the highest turnover compared to those owned by men. Practical implications This study brings in different factors that can ensure or hinder success/performance of small-scale, rural non-enterprises. Originality/value The research paper is of value in that it is the first study in Lesotho that considers different factors that determine business success in relation to employment creation, turnover and profitability.

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Agriculture forms a major source of livelihood for many people in Lesotho. The major agricultural activities include crop production and animal husbandry. Many farmers produce agricultural goods, mainly crops for subsistence purposes. There are also some subsistence farmers who participate in animal husbandry. Subsistence farmers keep livestock mainly for social and economic purposes. For instance, some farmers rear animals for prestige, ploughing, paying bride prices as well as producing milk for household use. The traditional breeds of cattle in many parts of Lesotho are kept mainly for domestic use. Despite a large number of Basotho farmers keeping livestock for subsistence purposes, there are some farmers who rear cattle for producing milk. These cattle are purchased from the neighbouring South Africa, while some are crossbred in the country. Some dairy farmers are members of associations, while others are not. Both association members and non-members market the milk in the local dairy industry, Lesotho Dairy Products (LDP). The supply of milk to the local dairy industry is not sustainable due to the small number of farmers participating in dairy farming. This has thwarted the capacity of the dairy industry to produce a variety of dairy products for the domestic market. As a result, the local market is flooded with milk products imported from South Africa. This shows that the forward linkage between LDP and farmers is too weak. This has in turn affected the output (backward linkage) of the dairy industry negatively. The industry specialises in the production of a few dairy products. Besides creating employment opportunities for dairy farmers, farm workers, as well as people working in the industry, the dairy industry has limited backward linkage within the local economy. It does not produce essential agricultural inputs for farmers such as pesticides and dairy cattle. In the light of these, this research study investigates the contribution of the dairy industry in improving the lives of dairy farm households and the economy of Lesotho. This is achieved by looking at production linkages (forward and backward) between dairy farmers and LDP.