Abstract
Diversified livelihoods combining farming, livestock keeping and non-farm income are characteristic of many rural households worldwide. For the Central Asian and Caucasian region, livestock keeping is especially important in terms of land use and socio-cultural heritage. We contribute to the literature with data from the under-researched Caucasus region and investigate: (i) the extent of diversification in smallholder households; (ii) the role of livestock keeping in diversification; (iii) the influence of household-specific and location-specific variables and diversification on household income. Based on a dataset of 303 households, we calculate contribution margins for the main agricultural activities, household income, and diversification indices and analyze the influence of diversification, asset and location variables on household income with a regression model. Household income is generally diversified and a combination of four income sources (crops, livestock, poultry/bees and social benefits) was the most frequent. The econometric analysis shows that higher household incomes are positively correlated with higher household land and livestock assets, the presence of non-farm work and social benefit income sources and with an increasing specialization as measured by the diversification index. For enhancing rural household incomes and slowing down rural-urban migration, the development of non-farm job opportunities is recommended.
Highlights
Smallholder livelihoods are followed by a large proportion of rural households in the Caucasian and Central Asian region
The self-reported occupation shows the importance of agriculture in the study villages since on average more than 60% of the economically active population are engaged in agriculture
We analyzed household income data from smallholders in rural Azerbaijan and Georgia to investigate the extent of income diversification, the role of livestock keeping in diversification and the influence of household-specific and location-specific variables and diversification on household income
Summary
Smallholder livelihoods are followed by a large proportion of rural households in the Caucasian and Central Asian region. To other parts of the world, smallholders in this region combine arable farming with livestock keeping and non-farm income Smallholders typically pursue such diversified livelihoods in order to increase income, reduce risks, stabilize income and maintain food security [1,2] by making use of diverse assets and opportunities provided by their environment and the markets accessible to them. Diversified smallholder livelihoods are a phenomenon of rural regions, where households can make use of abundant and varied natural resources [3,4] These regions are disadvantaged by inadequate infrastructure and the lack of economic possibilities beyond agriculture [4,5] leading to outmigration and demographic change [6,7,8]. Understanding the influence of contextual variables, e.g., an abundance of natural resources or infrastructure, on diversification is crucial in the formulation of context-specific policy recommendations for sustainable rural development
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