ASSET, ACTIVITY, AND INCOME DIVERSIFICATION AMONG AFRICAN AGRICULTURALISTS: SOME PRACTICAL ISSUES

This paper starts from the premise that diversification of assets, activities, and incomes is important to African rural households, in that diversification into nonfarm income constitutes on average about 45 percent of incomes, and the push and pull factors driving that diversification are bound to persist. From that premise, we noted that the empirical study of diversification has been beset by practical problems and issues relating to (1) definitions and concepts, (2) data collection, and to (3) measurement of the nature and extent of diversification. The paper addressed each of those problems. Two points are of special interest to the overall conceptualization of diversification research. The first is that empirical studies have exhibited a wide variety - bordering on confusion - of systems of classification of assets, activities, and incomes as pertains to diversification behavior. We argued that the classification should conform to that used in standard practice of national accounts and macro input-output table construction, classifying activities into economic sectors that have standard definitions, and the classification of which does not depend on the location or functional type (wage- or self-employment) of the activity. We further argued that given a sectoral classification, it is useful to make a functional and locational categorization of the activity, and keep each of these three dimensions of the activity - sectoral, functional, and locational - separate and distinct so as to avoid confusion. The second is that it is useful to have an image of a production function in mind when analyzing the components of diversification behavior: (1) assets are the factors of production, representing the capacity of the household to diversify; (2) activities are the ex ante production flows of asset services; (3) incomes are the ex post flows of incomes, and it is crucial to note that the goods and services produced by activities need to be valued by prices, formed by markets at meso and macro levels, in order to be the measured outcomes called incomes. "Livelihoods" is a term used frequently in recent diversification research, and while its meaning differs somewhat over studies, it generally means household and community behavior, with respect to holdings and use of assets and the productive activities to which the assets are applied. The link between livelihoods and incomes needs to be made by valuing the output of livelihood activities at market (and/or virtual) prices. That valuation permits an analytical link between household/community behavior (thus a micro view of diversification) and the aggregate functioning of markets (thus a link with the meso and macro levels and the policies pertaining thereto).Agribusiness, O, Q12,

HETEROGENEOUS CONSTRAINTS, INCENTIVES AND INCOME DIVERSIFICATION STRATEGIES IN RURAL AFRICA

A burgeoning recent literature emphasizes "livelihood" diversification among smallholder populations (Chambers and Conway 1992, Davies 1993, Ellis 1998, Bryceson 1999, Ellis 2000, Little et al. 2001). While definitions vary within this literature, the concept of livelihoods revolves around the opportunity set afforded an individual or household by their asset endowment and their chosen allocation of those assets across various activities to generate a stream of benefits, most commonly measured as income. This holistic perspective has the potential to enhance our understanding of the strategies that farm households pursue to ensure food and income security given the natural and economic environment in which they operate. Diversification patterns reflect individuals' voluntary exchange of assets and their allocation of assets across various activities so as to achieve an optimal balance between expected returns and risk exposure conditional on the constraints they face (e.g., due to missing or incomplete markets for credit, labor, or land). Because it offers a glimpse as to what people presently consider their most attractive options, given the incentives and constraints they face, the study of diversification behavior offers important insights as to what policy or project interventions might effectively improve either the poor's asset holdings or their access to higher return or lower risk uses of the assets they already possess. Since diversification is not an end unto itself, it is essential to connect observed livelihood strategies back to resulting income distributions and poverty. Not all diversification into off-farm or non-farm income earning activities offers the same benefits and not all households have equal access to the more lucrative diversification options. Yet the livelihoods literature offers little documentation or explanation of important differences between observed diversification strategies. This paper addresses that gap by offering a comparative analysis using data from three different countries, Cote d'Ivoire, Kenya and Rwanda. Like Dercon and Krishnan (1996) and Omamo (1999), we emphasize that interhousehold heterogeneity in constraints and incentives must factor prominently in any sensible explanation of observed diversification behaviors. Indeed, section 4 demonstrates that at a very fundamental level - the choice of basic livelihood strategy - households would prefer locally available livelihood strategies other than those they choose, were they not constrained from doing so. A simple appeal to the principle of revealed preference thus suggests that heterogeneous constraints and incentives play a fundamental role in determining livelihood diversification patterns manifest in income diversification data. The plan for the remainder of this paper is as follows. The next section presents the basic conceptual foundation from which we operate. Section 3 then introduces the data sets and definitions employed in the analysis. Section 4 presents findings relating to the observed variation in income sources across the income distribution, to distinct livelihood strategies pursued by rural African households, to the determinants of strategy choice, and to the effects of alternative livelihood strategies on income dynamics. These findings point especially to significant rural markets failures - especially with respect to finance and land - that force poorer subpopulations to select strategies offering demonstrably lower returns while wealthier subpopulations are able to enjoy higher return strategies to which entry is at least partly impeded by fixed costs and lower marginal costs of participation. Section 5 concludes.Labor and Human Capital, O & Q12,

AGROINDUSTRIALIZATION IN EMERGING MARKETS: OVERVIEW AND STRATEGIC CONTEXT

This article offers an overview for a special issue on agroindustrialization. It reviews eleven articles analyzing the agroindustrialization process in Latin America and Asia. It sets out a conceptual framework from the organizational economics and strategic management literature to enhance the understanding of the process of agroindustrialization from a competitive strategy point of view.Agribusiness, Industrial Organization,

Diversification and agrarian change under environmental constraints in rural China: Evidence from a poor township of Beijing municipality

Working paper du GATE 2007-11This article illustrates the impact of changes related to market reforms and environmental policies on the economic structure in rural China by providing a comparative analysis of several villages in a poor township in Beijing municipality. Two main concomitant phenomena are affecting agricultural and non-agricultural choices in the studied area. First, the introduction of market mechanisms is encouraging local population to engage in new activities that are closer to local comparative advantages. Second, rural households are facing new constraints in the form of environmental protection measures, which have weakened traditional insurance channels provided by forest resources and cattle stock. Drawing on household-level survey data and interviews with village heads conducted in ten villages of Labagoumen township in December 2003, this article analyzes households decisions in response to market reforms and environmental constraints. We find large disparities both between villages and households in the diversification process and discuss the reasons of observed inertia in the region, most households still heavily relying on corn production

Seeking and accessing professional support for child anxiety in a community sample

There is a lack of current data on help-seeking, and barriers to accessing professional support for child anxiety disorders. This study aimed to provide current data on the frequency and type of parental help-seeking, professional support received, and parent-reported barriers/facilitators in the context of child anxiety, and to explore factors associated with help-seeking, and parent-reported barriers among help-seekers and non help-seekers. We conducted a survey of help-seeking in parents of 222 children (aged 7-11) with elevated anxiety symptoms identified through screening in schools, 138 children of whom met diagnostic criteria for an anxiety disorder. Almost two-thirds (64.5%) of parents of children with an anxiety disorder reported seeking help from a professional; in 38.4% of cases parents reported that their child had received support from a professional to help manage and overcome their anxiety difficulties, and < 3% had received evidence-based treatment (CBT). Frequently reported parental barriers related to difficulties differentiating between developmentally appropriate and clinically significant anxiety, a lack of help-seeking knowledge, perceived negative consequences of help-seeking, and limited service provision. Non-help seekers were more likely than help seekers to report barriers related to thinking a child's anxiety may improve without professional support, and the absence of professional recognition. Findings identify the need for (i) tools for parents and primary school staff to help identify children who may benefit from professional support to overcome difficulties with anxiety; and (ii) increased evidence-based provision for child anxiety disorders, including delivery within schools and direct support for parents

Effects of Regular Off-farm Activities on Household Agri-cultural Income: Evidence from Kenya’s Kerio Valley

This paper contributes to clarifying the scientific debate on whether off-farm activities hurt or help agricultural income. The main purpose of this research is to estimate the impacts of rural household’s participation in regular off-farm activities on agricultural income. The literature indicates that off-farm activities affect rural household’s income but studies on their effect on agricultural income have remained largely inconclusive. Determining how off farm activities affect agricultural income is highly relevant for the decisions of poor rural households and policy makers to allocate resources efficiently and increase investment to combat povert

diversification as part of a csa strategy the cases of zambia and malawi

Climate variability, associated with farm-income variability, is recognized as one of the main drivers of livelihood diversification strategies in developing countries. In this chapter, we present a synthesis of two comprehensive studies from Zambia and Malawi on the drivers of diversification and its impacts on selected welfare outcomes with a specific attention to climatic variables and institutions. We use geo-referenced farm-household-level data merged with data on historical rainfall and temperature as well as with administrative data on relevant institutions. The two case studies demonstrate that diversification is clearly an adaptation response, as long term trends in climatic shocks have a significant effect on livelihood diversification, albeit with different implications. Whereas the long term variation in growing period rainfall is associated with increased crop, labour and income diversification in Malawi, it is only associated with increased livestock diversification in Zambia. With regard to institutions, we find that access to extension agents positively and significantly correlates with crop diversification in both countries, underlining the role of extension in promoting more resilient farming systems in rural Zambia and Malawi. Fertilizer subsidies are among the most important agricultural policies in both countries, where they significantly affect incentives for income diversification – though in opposing ways – providing important policy implications. The two case studies document distinct ways in which incentives for livelihood diversification (measured along different dimensions) are shaped by increased variability in rainfall and rural institutions. The results also demonstrate that diversification can be an effective adaptation response and the risk-return trade-offs are not as pronounced as might be expected

Fish Is Food - The FAO’s Fish Price Index

World food prices hit an all-time high in February 2011 and are still almost two and a half times those of 2000. Although three billion people worldwide use seafood as a key source of animal protein, the Food and Agriculture Organization (FAO) of the United Nations–which compiles prices for other major food categories–has not tracked seafood prices. We fill this gap by developing an index of global seafood prices that can help to understand food crises and may assist in averting them. The fish price index (FPI) relies on trade statistics because seafood is heavily traded internationally, exposing non-traded seafood to price competition from imports and exports. Easily updated trade data can thus proxy for domestic seafood prices that are difficult to observe in many regions and costly to update with global coverage. Calculations of the extent of price competition in different countries support the plausibility of reliance on trade data. Overall, the FPI shows less volatility and fewer price spikes than other food price indices including oils, cereals, and dairy. The FPI generally reflects seafood scarcity, but it can also be separated into indices by production technology, fish species, or region. Splitting FPI into capture fisheries and aquaculture suggests increased scarcity of capture fishery resources in recent years, but also growth in aquaculture that is keeping pace with demand. Regionally, seafood price volatility varies, and some prices are negatively correlated. These patterns hint that regional supply shocks are consequential for seafood prices in spite of the high degree of seafood tradability