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Brief assessment of the living income concept









Cruickshank, D. & Bammann, H. 2024. Brief assessment of the living income concept. Rome, FAO.



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    Following a brief assessment of the living income concept, FAO organized a living income workshop that was held from 9 to 10 November 2023 in Rome, Italy. The workshop facilitated meaningful exchanges, which fostered bonds for potential collaboration to support the living income work. Cohosted by FAO and the Living Income Community of Practice (LICoP), 42 participants including living income experts, FAO colleagues and partner organizations discussed the living income concept, its methodologies, application, current debates and identified areas of synergies. Findings and examples provided by practitioners are presented in the summary report along with recommendations for future collaborations.
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    This paper argues for a twin-track approach to hunger and poverty reduction that combines measures to promote rural development through growth in agriculture and rural off-farm activities with measures to provide direct and immediate access to food for the most needy. The paper begins with an exposition of the concepts of food insecurity and poverty and shows that the majority of the hungry and poor in developing countries still live in rural areas. It then documents the substantial economic costs of hunger to show that direct action against hunger can itself contribute to poverty reduction. It goes on to argue that if the income from agricultural growth is spent locally and promotes growth in rural off-farm activities, this can have a strong impact on the incomes of the poor. Evidence is presented to substantiate this argument. The paper concludes by discussing the implications of the twin-track approach for anti poverty strategies.
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    Recognizing that agrifood value chains (AFVCs) are essential to ensure food security and foster structural change, FAO seeks to reassess the array of policies and interventions needed to protect and strengthen AFVCs in low-income countries and fragile states. This White Paper aims to contribute to this initiative by shedding light on largely unaccounted-for market structures at midstream segments of AFVCs. Building on the field of Industrial Organization in economics, we develop a theoretical framework and a related simulation tool that one can inform with existing or specifically collected data. Simulation outcomes help predict how different types of shocks may affect key food security outcomes, under different levels of concentration in midstream segments of AFVCs. We illustrate this approach using data from the Ethiopian wheat AFVC in 2013.

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