Country Towns and Fluctuating Rural Fortunes - Is There a Case For Assistance?

This paper provides a review of some commonly held arguments for extending government assistance to the non-farm rural business sector as a means of maintaining the infrastructure of agriculture through periods of rural downturn. Recent literature on the nature of linkages between the farm sector and small business is reviewed to identify the scale of exposure of the various types of small business. Assistance measures available to the farm sector are compared to those available to small business and differences between the two groups are discussed. It is concluded that the disparity in tax treatment between the farm and non-farm rural business sector is an important focus for policy reform and that assistance to the non -farm rural business sector should encourage the development of appropriate small business structures and risk management techniques.