RURAL LIVELIHOODS

1. Livelihood and rural livelihoods.

A Livelihood can be defined as the activities, the assets and the access that jointly
determine the living gained by an individual or household (Ellis 1998). When it comes to
an individual, a livelihood is the ability of that individual to obtain the basic necessities in
life, which are food, water, shelter and clothing. Therefore all activities involved in
finding food, searching for water, shelter, clothing and all necessities required for human
survival at individual and household level are referred to as a livelihood.
Approximately 90 % of rural households are involved in farming activities. In
Africa, 70 % of the household income in rural areas is from farming activities, while in
Asia and Latin America, 50 % of the income is from farming activities (Davis et al.,
2010). In these rural populations small-scale farming, fishing, raising livestock and nonfarm activities are some of the common livelihoods that these populations survive on as a
source of income.
2. Rural livelihood is important.
Rural livelihoods as a source of income. Rural livelihood is a complex structure
comprising of mostly agriculture, with part of the population diversifying into non-farm
activities in order to attain a sustainable livelihood to get better income for their
households.
3. Characteristics of rural livelihood.
The majority of poor rural people are what we may call peasants, or their
livelihoods have many of the characteristics of peasants' livelihoods. These people engage
in part-time farming activities with a mode of agricultural production distinct from that of
other farms (such as commercial, smallholder family or co-operative farms) with multiple
economic activities which are predominantly in small scale (often household) activities
and enterprises in the informal economy. These activities also tend to have a heavy
dependence on family labor and little use of capital. The distinctive features of poor rural
people's activities require analysis of the livelihoods of these people using different
techniques from those generally used in analyzing commercial agricultural or nonagricultural enterprises in the formal sector.
4. Rural livelihood diversification is important.
Livelihoods are an important part of human existence. In order for a population to
survive there is need for livelihoods that would sustain and support their households.
Economic growth creates opportunities for a wider choice of livelihoods. Diversification
of livelihoods increases chances of economic growth and survival of a household.
5. Livelihood diversification base on human assets.
a. Human Capital

b.

c.

d.

e.

Human capital is a combination of knowledge, habits, social behavior and personality

that contribute to economic benefits for an individual and/or community. This
knowledge can be attained through education, creativity, availability of skills and
talents, experience, training and exposure. Human capital also includes health of an
individual, household and community.
Physical Capital
Physical capital is an asset that helps to turn raw materials into finished products
and/or services. Availability of physical capital boosts productivity and enhances
income earned by a household. Physical capital allows for work to be accomplished
faster as well as for diversification.
Social Capital
Social capital plays a major role in productivity of an individual, organization and
community. Social capital refers to relationships, institutions and norms that shape
societal interactions. Social networks are considered as horizontal associations
between individuals, which increase productivity by reducing the costs of doing
business and facilitate coordination and cooperation. Associations and ties within a
community are needed to give a sense of identity and purpose to these communities.
These ties are also a basis for access to information that can be of great assistance to
the community.
Financial Capital
Financial capital refers to any liquid medium or mechanism that represents wealth
such as money, purchasable items, savings, credit, etc.
Natural Capital
Natural capital is the basis of all human economic activity. Natural capital includes
land, water, air, living organisms and all ecosystems on the Earth that are necessary
for human survival and well-being. In general, natural capital refers to natural
resources.

6. Positive and negative effects of rural diversification.

The positive impacts of diversification include seasonality, risk, employment, credit
and asset effects.
a. Seasonality
Seasonality causes peaks and troughs in labor utilization on the farm, and creates food
insecurity due to the mismatch between uneven farm income streams and continuous
consumption requirements. Diversification can contribute to reducing the adverse
effects, by utilizing labor and generating alternative sources of income in off-peak
periods.
b. Risk reduction
Risk across activities that confront different risk profiles. The more this comprises
activities that display uncorrelated risks between them, the more successful it is at
achieving this end.
c. Higher income
Higher income could alone. It can do this by making better use of available resources
and skills, and taking advantage of spatially dispersed income earning opportunities.

d. Asset improvement
Asset improvement to put assets to productive use.
e. Environmental benefits
Diversification can potentially provide environmental benefits in two ways. One is by
generating resources that are then invested in improving the quality of the natural
resource base. The second is by providing options that make time spent in exploiting
natural resources.
f. Gender benefits
It is possible for diversification to improve the independent income-generating
capabilities of women and in so doing, also improve the care and nutritional status of
children since a high proportion of cash income in the hands of women tends to be
spent on family welfare.
Negative effects Some disadvantages of the diversification examined in empirical studies
are:
a. Income distribution
Diversification can be associated with widening disparities between the incomes of
the rural poor and the better-off. This occurs, as noted already, because the better-off
are able to diversify in more advantageous labor markets than the poor, and this in
turn reflects asset poverty especially with respect to human capital.
b. Farm output
Some types of diversification may result in stagnation on the home farm. This
typically occurs when there are buoyant distant labor markets for male labor, resulting
in depletion of the labor force required to undertake peak farm production demands
such as land preparation and harvesting.
c. Adverse gender effects
These are primarily associated with the type of diversification that is also held to have
adverse effects on agriculture. Where it is male labour that is predominantly able to
take advantage of diversification opportunities, then women may be even more
relegated to the domestic sphere and to subsistence food production.