The Determinants of Rural Livelihood Diversification in Developing Countries

Journal of Agricultural Economics (Impact Factor: 1.28). 02/2000; 51(2):289-302. DOI: 10.1111/j.1477-9552.2000.tb01229.x
Source: RePEc


The diversity of rural livelihoods in low income developing countries is receiving increased attention in discussions about rural poverty reduction. This paper explores just one facet of livelihood diversity, namely the reasons for households to adopt multiple livelihood strategies. The distinction is made between diversification of necessity and diversification by choice. Six determinants of diversification are considered in the light of that distinction, and these are seasonality, risk, labour markets, credit markets, asset strategies, and coping strategies. The paper concludes that under the precarious conditions that characterise rural survival in many low income countries, diversification has positive attributes for livelihood security that outweigh negative connotations it may possess. Policy should facilitate rather than inhibit diversity. Diverse rural livelihoods are less vulnerable than undiversified ones.

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    • "Livelihood strategies in which households engage are important in terms of overall poverty reduction. The particular livelihood/s that households choose are determined by a number of factors including; culture , traditions, economic conditions, environment and local demography (Ellis, 2000). It is not always possible for households to secure their own livelihoods in the face of external factors beyond their control (Vedeld et al., 2012). "
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    • "Diversification resulting from push or pull factors have been categorised as either 'survival-led' or 'opportunity-led' respectively (Ellis, 2000b; Lay et al., 2008; Reardon et al., 2006). Survival-led diversification, mainly driven by push factors, occurs when poorer rural households engage in low-return nonfarm activities by necessity to ensure survival, to reduce vulnerability or to avoid falling deeper into poverty. "
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    • "Individuals who have alternative and more profitable occupations can distribute their effort to maximise their income whilst managing risk. This is supported by current economic and social theory relating to subsistence livelihoods, where individuals diversify their livelihoods to achieve higher and more stable incomes (Martin et al., 2013; Ellis and Allison, 2004; Batterbury, 2001; Ellis, 2000). Our results are consistent with Mazera et al. (2007) who found that greater non-fishing income, derived from alternative occupations, was associated with reduced fishing effort. "
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May 19, 2014