LECTURE 3: LIVELIHOOD AND RURAL DIVERSIFICATION

October 28, 2015

LECTURE OUTLINES

• Concepts and definition• Dimensions of vulnerable livelihoods• The Sustainable Livelihoods Approach• Sustainable livelihoods; poverty and vulnerability • Livelihood strategies• Livelihood strategies adaptation• Income diversification is an important livelihood strategy for

rural households• Poverty and rural livelihoods: the locational dimension• Utilizing the Sustainable Livelihood Framework for livelihood

analysis

CONCEPTS AND DEFINITIONLivelihoods definition The dictionary definition of livelihood is a ‘means to living’ A livelihoods comprises the assets (Natural, Physical, Human,

Financial and Social Capital), the activities and the access to these (mediated by institutions and social relations) that together determine the living gained by the individual or household (Chambers and Conway, 1992).

Sustainable livelihood A livelihood is sustainable when it can cope with and recover from

stresses and shocks, maintain or enhance its capabilities and assets, while not undermining the natural resource base.

Rural livelihood diversification Rural livelihood diversification is defined as the process by which

rural households construct an increasingly diverse portfolio of activities and assets in order to improve their standard of living

The Sustainable Livelihoods Approach

The sustainable livelihoods approach ( SLA ) is a way to improve understanding of the livelihoods of poor people.

The two key components of the SLA are:

• A framework that helps in understanding the complexities of poverty

• A set of principles to guide action to address and overcome poverty

SLA has seven guiding principles which are:

• Be people-centred. SLA begins by analysing people's livelihoods and how they change over time. The people themselves actively participate throughout the project cycle.

• Be holistic. SLA acknowledges that people adopt many strategies to secure their livelihoods, and that many actors are involved; for example the private sector, ministries, community-based local as well as international organizations.

• Be dynamic (self-motivated). SLA seeks to understand the dynamic nature of livelihoods and what influences them.

• Build on strengths. SLA builds on people's perceived strengths and opportunities rather than focusing on their problems and needs. It supports existing livelihood strategies.

• Promote micro-macro links. SLA examines the influence of policies and institutions on livelihood options and highlights the need for policies to be informed by insights from the local level and by the priorities of the poor.

• Encourage broad partnerships. SLA counts on broad partnerships drawing on both the public and private sectors.

• Aim for sustainability. Sustainability is important if poverty reduction is to be lasting.

Dimensions of Vulnerable Livelihoods

• Vulnerability: the probability that livelihood stress will occur/degree of risk and ability to cope with it.

• Vulnerable to external events (shocks and stresses) and internal (household) constraints.

• Vulnerability depends on the ability of the livelihood system to absorb/use/exploit change (system, resilience’) and the degree to which a system changes (system ‘sensitivity’)

Livelihoods vs Sustainable Livelihoods

LivelihoodsObjective -Access to food

Vulnerability - Lack or want of food

Coping strategies – to maximise immediate consumption

Sustainable LivelihoodsObjective - Secure and

sustainable livingVulnerability- Livelihood

system not resilient & sensitive to risks & shocks

Coping strategies – to preserve and build livelihoods

LIVELIHOOD STRATEGIES

A range of activities and resources:• Savings and borrowings • Accumulation • Changes in consumption patterns • Labour and asset pooling• Technological adaptation • Social networking• Labour market involvement (in which men and women engage to

generate food, income and well-being). It draws on:• Physical, human and collective assets, and

LIVELIHOOD STRATEGIES ADAPTATION

Changes in • Circumstances• Season • Locale • Climate

Changes in • Life cycle• Household structure

In response to the above, they move between the stages of survival, stability and growth (Grown and Sebstad, 1989).

Income Diversification is an Important Strategy for Rural Households

Diversity and diversification

• Diversity refers to the existence, at a point in time, of many different income sources while diversification is an ongoing social and economic process, reflecting factors of both pressure and opportunity that cause families to adopt diverse livelihood strategies.

• Different meanings of diversification: survival, income smoothing, risk reduction, accumulation.

• Agriculture an important income source but rarely do rural households rely only on one ‘occupation’.

• Non-farm income sources are over 50% in Asia and 30-50% in SSA (Depeasantisation?).

• Livelihood activities demonstrate that rural and urban links are strong. • With process of globalization, formal-informal divide becoming weaker.

Livelihood Diversification

POVERTY AND RURAL LIVELIHOODS: THE LOCATIONAL DIMENSION

Rural Poverty:

• Income poverty; • Infrastructure poverty - disadvantaged in terms of facilities (schools/

education), and outcomes

Why are rural areas the sites of massive poverty?

• Rural areas ignored by academics, politicians and practitioners • Development focus on ‘high potential’ rather than complex, isolated

and risk prone rural areas (see Development Policy Review, 2001, 19(4))

• Rural potential criteria focus on agriculture – non recognition of other assets.

THE THREE RURAL WORLDS

3 Rural Worlds Agriculture-based Transforming Urbanized Rural Pop (in millions), 2005 417 2200 255 Share of rural pop 68 63 26 GDP per capita ($) 379 1068 3489 Share of agric in GDP 29 13 6 Agri’s contribution to growth 32 7 5 No. of rural poor (millions) 170 583 32 Rural poverty rate 51 28 13 Urban poverty rate 45 11 6 Source: WDR 2008

Sustainable Livelihood Framework for livelihood analysis