livelihood chapter one.pptx

Rural livelihood and social welfare note for rural development

1. Bahir Dar University College of Agriculture and Environmental Sciences Department of Rural Development and Agricultural Extension Rural Livelihoods and Social Welfare (RDAR3112)

2. Chapter One: The Concept of Livelihood Chapter objectives: At the end of this chapter you will be able to: Define the term livelihood Identify livelihood strategies Design livelihood strategies

3. 1.1. What is livelihood? Livelihood is a set of economic activities, involving self-employment and/or wage-employment by using one’s endowments (human and material) to generate adequate resources (cash and non-cash) for meeting the requirements of self and the household, usually carried out repeatedly and as such become a way of life. A livelihood comprises the capabilities, assets (including both material and social resources) and activities required for a means of living (Chambers and Conway, 1992) Livelihood as “a means of support or subsistence” where subsistence is defined as “the minimum Necessitate access to health care, education, land and other natural resources (especially for the rural poor), and even services that secure one’s legal rights to employment and wages or otherwise.

4. 1.2. Why Promote Livelihoods? The primary reason to promote livelihoods is the belief in the essential right of all human beings to equal opportunity. Poor people do not have life choices nor do they have opportunities. Ensuring that a poor household has a stable livelihood will substantially increase its income, and over a period of time, asset ownership, self-esteem and social participation. The second reason for livelihood promotion is to promote economic growth. The ‘bottom of the pyramid’ comprising billion people in the world, who do not have the purchasing power to buy even the bare necessities of life – food, clothing and shelter. The third reason for promoting livelihoods is to ensure social and political stability. When people are hungry, they tend to take to violence and crime.

5. 1.3. Livelihood strategies Before we are going to discuss about livelihood strategies, it is vital to define strategy. A strategy is a way of describing how you are going to get things done. A good strategy will take into account existing barriers and resources (people, money, power, materials, etc.). Strategies suggest paths to take (and how to move along) on the road to success. That is, strategies help you determine how you will realize your vision and objectives.

6. Livelihood strategies: the range and combination of activities and choices that people make orundertake in stable times to achieve their livelihood goals. Livelihoods are diverse and change overtime. Scoones (1998) divided rural livelihood strategies into three broad types according to the nature of activities undertaken three broad clusters of livelihood strategies are identified. These are: agricultural intensification/extensification, livelihood diversification and migration .

7. Broadly, these are seen to cover the range of options open to rural people. Either you gain more of your livelihood from agriculture (including livestock rearing, aquaculture, forestry etc.) through processes of intensification (more output per unit area through capital investment or increases inlabour inputs) or intensification (more land under cultivation), or you diversify to a range of off-farm income earning activities, or you move away and seek a livelihood, either temporarily or permanently, elsewhere or, more commonly, you pursue a combination of strategies together or in sequence.

8. Identifying what livelihood resources (or combinations of ‘capitals’) are required for different livelihood strategy combinations is a key step in the process of analysis. For example, successful agricultural intensification may combine, in some circumstances, access to natural capital (e.g. land, water etc.) with economic capital (e.g. technology, credit etc.), while in other situations, social capital (e.g. social networks associated with drought or labour sharing arrangements) may be more significant. Understanding, in a dynamic and historical context, how different livelihood resources are sequenced and combined in the pursuit of different livelihood strategies is therefore critical.

9. Agricultural intensification/extensification:– These strategies mainline continued or increasing dependence on agriculture, either by intensifying resource use through the application of greater quantities of labour or capital for a given unit of land, or by bringing more land into cultivation or grazing. Whether, households pursue these strategies depend on agroecological potential and the implications for capital-led (supported often by external inputs and policy-led) and labour-led (based on own labour and social resources and a more autonomous process) intensification. Technical developments in agriculture may also operate as a key determinant. The availability and the extent to which it is undertaken by the household, will determine in major part the need for, and the household resources available to, off-farm livelihood diversification.

10. Livelihood diversification: – Diversification here may be to broaden the range of on-farm activities (e.g. adding value to primary products by processing or semi-processing them), or to diversify off-farm and non farm activities by taking up new jobs. It may be undertaken by choice for accumulation or reinvestment purposes, or of necessity either to cope with temporary adversity or as a more permanent adaptation to the failure of other livelihood options.

11. Diversification therefore may involve developing a wide income earning portfolio to cover all types of shocks. The range and combination of activities and choices to diversify livelihood includes: On-farm livelihood activities generated from farming Livestock and crop production Off-farm livelihood activitiaes refers to wage or exchange labor on other farms income from environmental resources: firewood, charcoal, housing materials, wild plants Non-farm income Refers to non-agricultural income sources It includes; salary employments, rental income, remittance (national and international), other transfers, pension to retires, Weaving, Sewing, Pot making, Timber production, Petty/local trading, Food and drink processing

12. Migration : It is a critical strategy to stimulate economic and social links between areas of origin and destination. Migration will have implications for the asset status of those left behind, for the role of women and for on-farm investments in productivity. It can be occurred due to voluntary and involuntary movement, effects (e.g. reinvestment in agriculture, enterprise or consumption at the home or migration site) and movement patterns (e.g. to or from different places).

13. 1.4. Livelihood assets, vulnerabilities, risks and coping strategies Livelihood Assets People require a range of assets to achieve positive livelihood outcomes ; no single category of assets on its own is sufficient to yield all the many and varied livelihood outcomes that people seek. This is particularly true for poor people whose access to any given category of assets tends to be very limited. As a result they have to seek ways of nurturing and combining what assets they do have in innovative ways to ensure survival . Households and individuals will have different and varying degrees of access to different portfolios of assets. However not only do fewer assets equate to greater vulnerability, but also lower potential for substitution between assets and activities makes livelihoods more vulnerable, especially to shocks.

14. The livelihood framework identifies five core asset categories or types of capital upon which livelihoods are built . Although the term ‘capital’ is used, not all the assets are capital stocks in the strict economic sense of the term (in which capital is the product of investment which yields a flow of benefits over time ). The five capitals are perhaps best thought of as livelihood building blocks; the term ‘capital’ is used because this is the common designation in the literature.

15. Human capital Human capital represents the skills, knowledge, ability to work and good health that together enable people to pursue different livelihood strategies and achieve their livelihood objectives. At a household level human capital is a factor of the amount and quality of labor available; this varies according to household size, skill levels, leadership potential, health status, etc. Human capital appears in the generic framework as a livelihood asset, that is, as a building block or means of achieving livelihood outcomes. Its accumulation can also be an end in itself. Many people regard ill-health or lack of education as core dimensions of poverty and thus overcoming these conditions may be one of their primary livelihood objectives.

16. Social capital There is much debate about what is meant by the term ‘social capital’. In the context of the sustainable livelihoods framework it is taken to mean the social resources which people draw in pursuit of their livelihood objectives These are developed through: Networks and connectedness, either vertical or horizontal (between individuals with shared interests) Membership of more formalized groups which entails adherence to mutually-agreed or commonly accepted rules, norms and sanctions ; and Relationships of trust, reciprocity and exchanges that facilitate cooperation, reduce transaction costs and may provide the basis for informal safety nets amongst the poor

17. Physical Capital Physical capital comprises the basic infrastructure and producer goods needed to support livelihoods . Infrastructure consists of changes to the physical environment that help people to meet their basic needs and to be more productive . Affordable transport; Secure shelter and buildings Adequate and clean water supply and sanitation; Affordable energy; and Access to information (communications).

18. Natural Capital Natural resource stocks from which resource flows and services (e.g. nutrient cycling, erosion protection) useful for livelihoods are derived. There is a wide variation in the resources that make up natural capital, from intangible public goods such as the atmosphere and biodiversity to divisible assets used directly for production such as trees, land, etc. Many of the shocks that devastate the livelihoods of the poor are themselves natural processes that destroy natural capital e.g. fires that destroy forests, floods and earthquakes that destroy agricultural land

19. Physical Capital Physical capital comprises the basic infrastructure and producer goods needed to support livelihoods. •Infrastructure consists of changes to the physical environment that help people to meet their basic needs and to be more productive. Producer goods are the tools and equipment that people use to function more productively. The following components of infrastructure are usually essential for sustainable livelihoods: • Affordable transport; • Secure shelter and buildings; • Adequate and clean water supply and sanitation; • Affordable energy; and • Access to information (communications).

20. Financial Capital Financial capital denotes the financial resources that people use to achieve their livelihood objectives. The definition used here is not economically robust in that it includes flows as well as stocks and it can contribute to consumption as well as production. However , it has been adopted to try to capture an important livelihood building block, namely the availability of cash or equivalent, which enables people to adopt different livelihood strategies.

21. There are two main sources of financial capital. Available stocks: Savings are the preferred type of financial capital because they do not have liabilities attached and usually do not entail reliance on others . It can be held in several forms: cash, bank deposits or liquid assets such as livestock and jewellery . Financial resources can also be obtained through credit-providing institutions. • Regular inflows of money : Excluding earned income, the most common types of inflows are pensions, or other transfers from the state, and remittances.