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Economic transformation and diversification towards off-farm income in rural and urban areas

A global update with a focus on sub-Saharan Africa












De La O Campos, A.P., Admasu, Y., Covarrubias, K.A., Davis, B. & Diaz, A.M. 2023. Economic transformation and diversification towards off-farm income in rural and urban areas  A global update with a focus on sub-Saharan Africa. FAO Agricultural Development Economics Working Paper, No. 23-05. Rome, FAO.




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    Book (series)
    Pilot project: Introduction of alternative income generating activities for livelihood diversification for fishing dependent communities on the Islands of the three riparian States of Lake Victoria
    GCP/RAF/466/EC SmartFish Project
    2013
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    The Lake Victoria Fisheries Organization, with support from the Food and Agriculture Organization of the United Nations, under the implementation of a regional strategy for the Eastern and Southern African - Indian Ocean region program, is implementing a pilot project: ‘The Introduction of Alternative Income Generating Activities for Livelihood Diversification for Fishing Dependent Communities on the Islands of the Three Riparian States of Lake Victoria’. A baseline survey on vulnerability/livel ihood/poverty in all project target areas/groups was undertaken in June 2013. The purpose was to establish vulnerability indicators and livelihood/dependency/poverty patterns associated with selected self-help groups located on selected islands of Lake Victoria in the riparian countries: Kenya, Tanzania and Uganda. The other objective was to identify potential alternative income generating activities that would reduce dependency on fishing and fish resources. The selected self-help groups and th eir respective beaches and islands are: Nyisiaya Women’s Group in Ndeda Beach, on Ndeda Island and USIA Youth Group in Mahanga, on Mageta Island (Kenya); Mpola Mpola at Gori, on Jagusi Island and Ddajje Star Group in Ddajje, on Buggala Island (Uganda); REEC/UPENDO in Ihumbo, on Bumbire Island and NEEMA Community Group in Igalula, on Ukerewe Island (Tanzania). The six self-help groups and respective fishing communities were interviewed by means of focus group discussions and personal interviews o n major areas of concern: group status; ownership of assets; access to services; vulnerability; income and expenditure; poverty and gender. The results show that the fisher communities are primarily concerned with, in order of priority: health; declining fish catches; safety on the lake; credit access, and education. The fishers acknowledge their high dependence on fish stating that during times of drought, market fluctuations and weather changes the communities are more vulnerable. They therefo re understand the need for diversification of income. The survey findings show that most self-help groups were formed to augment income, food and access to credit. The majority of the members of the self-help groups have access to land; semi-permanent housing; a few of their own livestock; two meals a day; no means of their own transport; no access to electricity; inadequate access to safe water; low savings; and little or no education. The study shows that food and education are the main expend iture items and there is little money available for diversification into non-fishery income generating activities. The different alternative income generating activities (IGAs) were proposed to supplement income, diversify sources of income and provide food. The IGAs include: crop farming, identified for food security and supplementary income for group members’ households; poultry farming for eggs and meat to generate income; cattle rearing for milk and meat to generate income and supplement die t; fish farming to diversify, generate income and reduce fishing pressure on Lake Victoria.  4 The next steps are to support the target groups technically and financially so that they can undertake the proposed IGAs to meet their respective goals. In line with the objectives of the project, the following activities will be undertaken:  Organize and facilitate a one-day validation meeting for at least 20 relevant stakeholders to present the results of the assessment and proposed work plans an d interventions at the premises of the Lake Victoria Fisheries Organization;  Capacity building of micro-project stakeholders and beneficiaries to sustain the initiative (business, marketing, management of micro-enterprises);  Carry out the livelihood diversification activities according to the work plans and detailed budget agreed;  Disseminate the preliminary results of the livelihood diversification activities through different media at the national level;  Organize and facilitate a final meeting at the national level for at least 20 relevant stakeholders to present the results of the poverty reduction activities and the proposed upscale/replication of interventions.
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    Booklet
    Modeling trade and income distribution in six developing countries
    A dynamic general equilibrium analysis up to the year 2050
    2022
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    This paper presents an empirical exercise, aimed at investigating the implications on poverty and income distribution of a reference scenario (SSP2) of economic development. It does so by coupling a dynamic general equilibrium model of the global economy, specifically designed to capture structural change dynamics in the medium and long run, with detailed micro data on household income in six countries: Albania, the Plurinational State of Bolivia, Ethiopia, Malawi, Nicaragua and Viet Nam. We also consider an alternative scenario of accelerated international trade integration, with a higher degree of trade openness. We found that long run structural change widens income inequality in all six developing countries. Accelerated trade integration amplifies the effect further, but most of it is already generated in the baseline scenario. A decrease in the relative value of land property and an increase in the relative value of capital ownership appear as key determinants. We decompose income differentials in three dimensions. Structural change worsens the income gap between male and female headed households, but the additional impact of trade is minimal. The effect of structural change is not uniform across countries when the income of rural households is contrasted with that of urban households, yet more trade reduces the relative rural income. Relative poverty increases in both the baseline and the larger trade volume case. However, we found that absolute poverty would be eradicated in almost all countries by the year 2050.
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    Document
    Livelihood Diversification and Vulnerability to Poverty in Rural Malawi
    ESA Working Paper No. 15-02
    2015
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    Climate variability, associated with farm-income variability, is recognized as one of the main drivers of livelihood diversification strategies in developing countries. Analysing determinants of livelihood diversification choices, to better understand household strategic behaviour in the event of climatic risks and other shocks, is important for the formulation of development policies in developing countries highly dependent on rain-fed agriculture, like Malawi. We use geo-referenced farm-househ old-level data collected in 2010-11 to investigate how climatic variability influences the pattern of diversification that farmers adopt, and the impacts of these choices on welfare. To do so we apply the “vulnerability to expected poverty” approach which measures the future level of poverty taking into consideration the role of risk and uncertainty. The analysis considers the effect of policies and institutions such as fertilizer subsidies, extension services, safety-net and credit on diversifi cation choices. The results show that higher levels of climate risk generally increase the likelihood of diversification across labour, cropland and income, suggesting the importance of diversification as a response to constraints imposed by increased risk. In contrast, we find that in areas with favourable average rainfall conditions households are more likely to diversify income, suggesting diversification as a response to opportunities. In terms of welfare, the analysis performed on the compo nents of vulnerability to poverty provides evidence that climatic variables are key determinants of both components of vulnerability (expected consumption and its variance). Fertilizer subsidies are found to be significant in diversification choices for all dimensions and also particularly effective in reducing vulnerability to poverty in high variability environments although the same does not hold for extension. Looking at differences across gender, we find that women labour diversification is less responsive than men’s, resulting in a lower positive impact on expected consumption per capita.

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