Dear Forum members,
We are members of the ‘Rural Income Generating Activities’ (RIGA) project team within the Agricultural Development Economics Division of the Food and Agriculture Organization.
The RIGA project uses household survey data to assess the relative importance and composition of income generating activities to inform policy makers involved in designing rural and agricultural development policies and programs. The project aims to help the development community build empirically-based generalizations about the rural economy and identify policy instruments that promote rural non-farm activities alongside agriculture in a manner that facilitates rural poverty alleviation.
Some key results of the project reveal that, while agricultural-based sources of income remain the central tenet of rural livelihoods, diversification- not specialization- is the norm (see reference figure: http://www.fao.org/es/esa/riga/english/forum_en.htm). Although both rich and poor households diversify income sources, a greater reliance on non-farm income is associated with greater wealth while agricultural income is generally most important for the poor. For policy makers, these results can be indicative of how to promote rural development. Land, education, and infrastructure are valuable assets whose access and accumulation can be influenced by government policy. A key issue to consider is the assets a government should promote given its limited resources. Focusing on only one asset for rural development may be misguided since doing so may promote a singular income pathway for rural households rather than creating diverse opportunities. This suggests investment must be bundled, the mix of assets to invest in set by a country’s level of development as well as on local conditions.
Given this context, we invite forum members to share their views on the following:
1) In the places where you work, do you observe a duality of diversification strategies, with some household diversifying in low-risk, low-return activities while others use diversification for growth and to exit poverty?
a) Are those household types different, and how?
b) Can you describe examples/experiences of policies, programmes or projects that have been successful in promoting diversification as a growth strategy and how these operate?
2) What effects did you observe of the food prices and financial crises on different types of rural households, based on their asset ownership and income strategies? In terms of food security and welfare, did rural households that rely mainly on agriculture for their livelihoods fare better or worse than households that had diversified out of agriculture? Why?
The discussion that we hope will develop in response to the above questions will serve as an informal validation of our research, and will guide and inform the analytical activities of the RIGA project. Many thanks in advance to the forum members for their time and contributions. We look forward to an interesting and informative discussion.
Alberto Zezza, Katia Covarrubias, Ana Paula de la O, Carly Petracco and Luca Tasciotti
RIGA project team