Evidence from developing countries points towards the growing importance of non-farm activities in the income-generating portfolio of rural households (Lanjouw and Stern, 1993; Estudillo and Otsuka, 1998). From an extensive review of the literature, Reardon et al. (1998) show that rural non-farm activities account for 42 percent of the income of rural households in Africa, 40 percent in Latin America and 32 percent in Asia. It is critical to determine how such activities can be promoted, given the importance of non-farm income as a mechanism whereby rural households can maintain their livelihoods and as a possible path out of poverty. Particular attention should be paid to ways in which spin-off activities in the non-farm sector can be promoted in the presence of agricultural growth. Spin-off activities can emerge from backward and forward production linkages with agriculture, or through expenditure linkages that come with rising agricultural income.