Article

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

ABSTRACT

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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    • "The driving forces of rural income diversification are grouped into " choice or pull " factors to accumulate wealth and " necessity or push " factors to survive (Ellis, 2000; Barrett et al., 2001b) 3 . Since the reclassification of the urban boundary can be seen almost as an exogenous shock to households, peri-urban farm households' decision to diversify to alternative income sources is more likely for necessity than choice reasons. "
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    DESCRIPTION: Developing countries are urbanizing rapidly, and this process places high demands on nearby agricultural land as the urban area expands. In Ethiopia, the incorporation of rural villages in peri-urban areas takes place through land expropriation and legislation. We provide empirical evidence on affected households’ adaptation of income diversification strategies, in Tigray, Northern Ethiopia through survey data collected for this purpose with households on either side of the adjusted administrative boundary. The survey took place two years post-expropriation, where local governments compensated farmers for lost land with quite substantial amounts of cash relative to annual farm earnings. Our multinomial logit results show that urban-reclassified households show continued high reliance on agricultural income, despite their limited access to farmland post-expropriation. Combining farming with skilled nonfarm employment is the dominant strategy for better-off households under both rural and urban administrations. Surprisingly, the poor under urban administration participate less in nonfarm employment compared with households still classified as rural, and are more likely to be dependent on transfer income. Previous experience in the nonfarm sector, rather than the amount of compensation, drives participation in skilled nonfarm employment. This has important implications for urban policymakers implementing expropriation, where the implicit assumption is that the cash injection will stimulate entry into skilled employment or business startups and smooth the transition into urban livelihoods.
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    • "Second, and relatedly, since most non-farm activities revolve around cities or towns dominated by the Han Chinese, entry into these activities is challenging; most Kazaks barely speak Chinese and have little interaction with the non-pastoral world, and thus do not know the social customs of their prospective clients and suppliers. Another rationale for diversification is as an effective risk-minimization strategy (Abdulai and CroleRees, 2001;Ellis, 2000b). However, in rangeland ecosystems routinely in disequilibrium, biophysical conditions such as precipitation, temperature and soils allow few land use options other than mobile livestock herding (Barrow et al., 2007;Behnke, 1993;Ellis and Swift, 1988;Gillson and Hoffman, 2007;Nori, 2007;Sullivan and Rohde, 2002). "
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    ABSTRACT: Diversification is routinely promoted to improve poor rural peoples’ livelihoods. However, policy recommendations for livelihood diversification based on evidence from crop-cultivating sedentary rural societies may not work for mobile pastoral communities, where socio-ecological conditions predetermine livestock herding as the preferred livelihood strategy. Using survey and semi-structured interview data collected from 159 households in the Altay and Tianshan Mountains of Xinjiang, China, this study applies cluster analysis to identify six distinct groups based on livelihood strategies: pastoralists, agropastoralists, crop farmers, wage labourers, hired herders and mixed smallholders. Although pastoralism is the least diverse of these in terms of sources of income, it is significantly more diverse in ecological dimensions such as spatial movement, land use pattern and livestock portfolio. Patterns of livelihood diversification and their relationship with household incomes indicate that pastoralism, although preferred, is unattainable for 55 per cent of households given their meagre asset endowments and the pressure of government policies toward sedentarization. The results strongly suggest that livelihood diversification does not improve welfare for pastoral households. Future development interventions should promote policies that enable households to regain flexible access to pastures and should aim to correct the imbalance of opportunities that exists in northern Xinjiang.
    No preview · Article · Nov 2015 · Development and Change
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    • "Thus households or individuals tend to allocate labour to off-farm work provided it yields higher returns and is no more risky than farm activities (Reardon et al., 2000). The literature differentiates between risk management (ex ante) and risk coping (ex post) strategies (Ellis, 2000; Reardon et al., 2006). In the first, households choose to diversify income sources a priori to prevent income failures at the household level, while in the second households diversify activities to cope with unexpected events that threaten their livelihoods. "
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    ABSTRACT: How do migrant colonists and indigenous populations differ in their land and labor allocation in the Amazon, and what does this imply for their income levels/livelihoods and the environment? We address this by analyzing patterns of on- and off-farm employment of rural populations, both mestizo and indigenous, in the Ecuadorian Amazon. We use data from an unusual survey that covers both mestizo and indigenous households. As elsewhere in rural areas of the developing world, off-farm employment is found to be the principal income source for 68% of the population and accounts for 53% of total household income on average. Within off-farm employment, farm wage employment is most common for the poor, who usually have little human (education) or natural capital (agricultural land). For educated individuals, in contrast, non-farm wage employment is commonly the choice. In the Amazon, the government (national, provincial, municipal) is the main employer, which is linked to recent large government investment in infrastructure and decentralization, leading to significant expansion of non-farm employment opportunities for rural populations close to major towns. The implications of this for livelihoods, sustainable development and the environment are explored in the conclusions.
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