Sustainable Livelihoods: Vulnerability, Complexity and Diversification

Introduction

Most households round the world have diverse sources of incomes. At most times and in most countries, they have several different "breadwinners", often with very different occupations. And the trend is increasing as national economies become more complex, the boundaries between urban and rural life break down, and the global economy impinges ever more on our lives..

In one household, there may be all sorts of ways of bringing in money and food. People's livelihoods may be sustained by a combination of wages, barter, loans and cash from the sale of produce -- all supplementing the cultivation of their own crops for the table. In a peri-urban area, for example around Harare in Zimbabwe or Kumasi in Ghana, one member of a household may farm while another may be a teacher, yet another may keep a shop, do craftwork or be a taxi driver…all contributing to the household income. In more remote rural communities, families may plant fruit trees, tend livestock and hunt, as well as growing subsistence crops; and they may receive regular remittances from family members working in a distant city or country.

But many of the activities involved are not easy to see – they form part of an `invisible economy’. It is easier for authorities to classify households as having one household head who has one job – but the reality is more complex. Not only do different members do different things - each individual in a household may be involved in a number of different activities rather than having just one occupation.

Such combinations are, of course, the result of individual choices by family members. But they also form part of complex household strategies to make money and reduce their vulnerability to everything from drought and flood to factory layoffs.

These strategies are ones that governments, agricultural extension workers, development workers and donor governments need to understand and add to if they are to help the many marginal members of the new global economy to make their way in the world. It is the poor who most need diversification within the household; but they often find it difficult to develop some kinds of activities which would contribute significantly to the household economy.

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Examples in the Field

The projects included in this booklet clearly show these strategies in operation -- either by accident or design. Sometimes they rely on individual or family effort, and sometimes they happen at the community level, through using co-operatives or other methods of ownership and control of business enterprises. And sometimes they rely on outside agencies for their inception, whether governments, or voluntary groups or corporations.

Our series of projects in Ghana, for instance, show the many ways in which households and communities diversify their sources of income.

* Pineapple growers in Ghana are forming co-operatives so that they can diversify into the marketing of their products, improving profits by cutting out the "middle man" and making direct contact with foreign buyers and retailers.

* In the peri-urban zone around Kumasi, vegetable farmers plan to diversify into the sale of second-hand clothes, and others have children who want to become hairdressers and shoemakers. * Meanwhile a few hundred kilometres north in Buabeng village, the community has invested in a guest house to welcome tourists to their sacred grove and monkey sanctuary. The man behind the project was also a teacher. Another of our interviewees in the village works as both a traditional birth attendant and farmer.

In the very different environment of rural Poland, we see that farming families have traditionally hedged their bets by sending at least one member to work in a factory. The insecurities and depressed prices of farm produce in post-Communist Poland have encouraged further diversification. Now farmers teach in schools, accept tourists into their homes or process home-grown vegetables for sale.

Within farming itself, diversification, for the poor, is key. Small scale farmers always try to spread risk by growing different crops. As we see in Bolivia, immigrant farmers are taking up complex cropping rotations to replace the monoculture of rice which they tried when they first settled the area. Cassava and rice are being supplemented by beans, fodder crops for cattle and trees grown for fruit or timber. The result is both a more diversified range of income sources and richer soils from which to grow the next year's crop.

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Selling to a World Market

Diversification is a way of reducing vulnerability and is fundamental to the livelihoods of the poor. With globalisation of the market place, there are new opportunities for diversification, through producing for far-away markets. These may be taken up by wealthy entrepreneurs, but, if the right policies are in place to help them, farming households can also benefit. Farming households may be able to sell their produce to markets far removed from their own direct experience, whether vegetables to the capital city or flowers, fruit or cocoa to Europe.

And the growing flows of tourists, from both rich countries and the cities of the south, means that many rural economies can attract money from tourism and the sale of their crafts to visitors. Diversification of incomes is a way of tapping into these new forms of business.

But there can still be formidable barriers -- from unscrupulous middle-men to the problems of poor access to skills or technology and unfavourable national laws. Sometimes, as we see in the case of smallholders growing cocoa in remote regions of Ecuador, ethical trade and similar initiatives can help them break down those barriers.

The insecurity of the marketplace can also be a barrier. The global marketplace is fickle. Prices can slump and consumer demands can change. Tourist destinations may go out of fashion or be hit by wars and rumours of wars. Currency crashes can wreck whole industries and decimate entire economies. Inevitably, with increased opportunity has come increased risk. And few governments are able or willing any longer to prop up prices or buy up surpluses in the way they once did. But diversification can be a way not just of increasing opportunity, but also of reducing risk. If one source of income fails then another can take its place.

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Conclusion

The world in the 21st century is far more complex than it was in the 20th century. Few people now live entirely outside the world economy. Everybody is being forced to adapt to its new opportunities, threats and choices. To secure livelihoods that are "sustainable" in the face of environmental, political, economic and other turbulence, most families and communities maximise their options, guard against vulnerability and hedge their bets through diversification in its many forms.

Farming households need to know that if the rains fail or a pest runs riot in their fields, they have a wage-earner in the house, or some other source of cash income. Teachers and other government employees feel safer knowing that if the state runs out of cash to pay their wages, they can still feed themselves from the kitchen garden. And millions of rural families wait with anticipation for the next remittance from the bright daughter or son working in an office in the capital or as a computer programmer in a foreign land.

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Thinking points

• Most households have a number of different sources of income: these include wages, food from their fields, cash from the sale of services, money sent home by relatives working abroad.
• Often this is a deliberate strategy to protect themselves against bad times.
• In a world of global markets and often weaker governments, such diversification may become increasingly important, especially for the poor.