How do families in rural areas attempt to improve their living standards? What strategies do they use to make sure they’re safe, and most importantly to survive?
People in rural households in developing countries tend to take-up jobs in different fields, at different times and also construct social initiatives. This is known as diversification and Ellis (1998) argues that breaking barriers to, and encouraging expansion of capabilities for diversification are two very desirable policy objectives in international development. Although it seems like a general “one-size-fits-all” policy, it can and should be adapted for the circumstances of the particular area.
It’s widely accepted that within an economy there are sectors and efficient economies require specialisation and division eg. urban, rural, agriculture, industry. However, diversification challenges this.
Studying livelihoods means looking more than incomes, it also includes: payments in-kind, exchanges, property rights, social institutions (kinships, families, compounds and villages) gender balances and access to benefits from public services such as healthcare, education, water supplies etc. Livelihood diversification is quite different to income diversification.
There seems to be an informed consensus that diversity has been increasing in recent history, especially in sub-Saharan Africa, however there is not a great amount of evidence proving this.
Case Study: Western Ghana: making a living in the cocoa frontier
In the 1970s cocoa production started to boom in the Juaboso District. A high influx of migrant farmers came from previous cocoa growing areas that had been burned due to bushfires. Many new settlements had to be established in the area. Migrants tended to settle with other migrants with all indigenous in separate settlements. The area has seen remarkable population growth from this influx but also there has been an increase in birth rates and a decrease in mortality rates.
The Ghanaian state has maintained state regulation of the cocoa sector, despite pressure from Washington D.C institutions, and this keeps its cocoa farming popular. The state has been able to maintain the pricing system and a uniform price per kilo is given to each farmer, irrespective of their location. They’re also ensured a market which, together with fair pricing and the State protecting them from world market price fluctuations, gives them security.
Not everything is perfect though, from a survey of 245 households, Knudsen concludes there is lack of land in the cocoa frontier and most families don’t have the capital to buy land anyway. Rather than leaving farming entirely, families also become involved in non-farming activities. They do this to supplement their income. In the 2007 survey, almost half the people in the district earned their primary income from non-farming (eg. trading or skilled work). Those involved in the non-farming sector only were more likely to be migrants and they were still reliant on the farming sector because it was the farmers who were buying their products.
When they receive income from a variety of sources, rural households see an improvement in living standards and are safer. They are less vulnerable to shocks and therefore diversification is understood to be an effective survival strategy. Ellis recommends that macro-level policies should be linked to micro-level interventions. This can be done by policy makers understanding diversification in rural households better. Household monitoring informs both researchers and policy advisers.
Some of the literature argues incomes come from three broad categories: farm, off-farm and non-farm.
- “Farm income includes livestock as well as crop income and comprises both consumption-in-kind of own farm output and cash income from output sold.”
- “Off-farm income typically refers to wage or exchange labour on other farms (i.e. within agriculture). It also includes labour payments in kind, such as the harvest share systems and other non-wage labour contracts that remain prevalent in many parts of the developing world.
- “Non-farm income refers to non-agricultural income sources”.
However there are different ways of compartmentalising. Work can be full-time, part-time, seasonal, temporary or casual and often, within one household there are a variety of circumstances.
“Many researchers recognise that the study of livelihood diversification requires a more spatially extended understanding of the household than the conventional definition.
The role of non-resident family members in contributing to the well-being of the resident group requires explicit recognition.
Households with members working away in urban centres or abroad are often referred to as ‘split families’, and their livelihood strategies are described as ‘straddling’ the rural and urban sectors.
Urban migrants are commonly observed to continue to maintain strong rural family connections, even after several generations of urban residence.
Circular migration, in which family members work for periods in the urban economy then return to their family farms, is noted in several studies.
Seasonal migration related to cyclical work opportunities in different locations is also common.”
There are many different motivations and pressures for diversification. Resources, skills, assets, and incomes are all economic constraints on diversification but also the social context has a large impact. Families, belief systems, ethnic groups and so on, all influence a person’s decision making. The main motivations are:
- seasonality (meaning uneven income flows)
- differentiated labour markets,
- risk strategies,
- coping behaviour (using up food stocks, selling livestock, asking for gifts from relatives)
- credit market imperfections (difficult to borrow),
- and intertemporal savings and investment strategies.
Like migration’s push and pull factors, “often a cumulative combination of factors will represent variable pressures and opportunities for different individuals and households within the community”.
Some recommendations from Ellis:
Non-farm income sources should be taken into account when describing the living standards of farm households in developing countries.
In sub-Saharan Africa it would appear that 30-50 per cent reliance on non-farm incomes is commonplace, and in some instances the average proportion is much greater.
Data collection on income sources needs to converge towards an accepted set of categories and definitions.
In 1998 (when this paper was written) it was not possible to infer trends in income diversification from the available household-level evidence; at least not for sub-Saharan Africa, with rare exceptions.