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ABSTRACT
This article explores two interrelated premises. The first is that the non-farm sector is of increasing importance to rural household. The second is that non-farm growth reduces the pressure on natural resources. The article reports on an analysis of income trends in three villages in the Krui area, Sumatra, Indonesia, by comparing household survey data from 1995 and 2004. Between these two years, neither the farm sector nor the non-farm sector showed sustained growth. Although the contribution of remittances to local incomes remained marginal, migration of unemployed and unmarried youngsters to urban areas has a positive effect on per capita incomes in the Krui area by decreasing the household size. With regard to the second premise the analysis shows that increased engagement in local non-farm activities does not automatically result in smaller landholdings. Increased engagement in ex-situ non-farm activities, however, helps to reduce pressure on local forest resources.