Abstract
The extreme poverty line is the most commonly used benchmark for poverty, set at US$ 1.90 by the World Bank. Another benchmark, based on the Anker living wage methodology, is the remuneration received for a standard work week necessary for a worker to meet his/her family’s basic needs in a particular place. The living wage concept has been used extensively to address incomes of plantation workers producing agricultural commodities for international markets. More recently intense discussion has emerged concerning the ‘living income’ of smallholder farmers who produce commodities for international supply chains on their own land. In this article we propose a simple method that can be used in all types of development projects to benchmark a rural ‘living income’. We launch the Living Income Methodology, as adapted from the Living Wage Methodology, to estimate the living income for rural households. In any given location this requires about one week of fieldwork. We express it per adult equivalent per day (AE/day) and data collection is focused on rural households and their immediate surroundings. Our three case studies showed that in 2017 in Lushoto District, rural Tanzania, the living income was US$ PPP 4.04/AE/day, in Isingiro District, rural Uganda, 3.82 and in Sidama Zone, rural Ethiopia, 3.60. In all cases, the extreme poverty line of US$ PPP 1.90 per capita per day is insufficient to meet the basic human rights for a decent living in low-income countries. The Living Income Methodology provides a transparent local benchmark that can be used to assess development opportunities of rural households, by employers in rural areas, including farmers hiring in labour, while respecting basic human rights on a decent living. It can be used to reflect on progress of rural households in low-income countries on their aspired path out of poverty. It further provides a meaningful benchmark to measure progress on Sustainable Development Goal 1, eliminating poverty, and 2, zero hunger and sustainable food systems, allowing for consideration of the local context.
Highlights
The extreme poverty line is the most commonly used benchmark for poverty, set at US$ 1.90 by the World Bank
Reference household (RH) size and composition in Lushoto District were obtained from the Rural Household Multiple Indicator Survey database (RHoMIS) for 2015 (Hammond et al 2017)
Results of the Living Income Diet Tool show that the minimum costs for a nutritious diet were 1.29 US$ Purchasing Power Parity (PPP)/adult male equivalent (AME)/ day or 1920 US$ PPP/RH/year
Summary
The extreme poverty line is the most commonly used benchmark for poverty, set at US$ 1.90 by the World Bank. The need to address social injustice in international supply chains of key agricultural commodities such as tea and coffee has led to an increasing focus on the ‘living wage’ for plantation workers An extension of this approach to include smallholder farmers who produce such commodities on their own farms, rather than through paid employment on plantations is captured in the concept of the ‘living income’. The international or extreme poverty line for low-income countries was set at US$ Purchasing Power Parity (PPP) 1.90 per capita per day in the year 2011 (World Bank 2015b). It is based on the national poverty lines of the 15 poorest economies in the world in 2005 (Chen and Ravallion 2010) and adapted to increasing price levels in 2011 (World Bank 2015b). Infrastructure and remoteness of rural areas are important factors for market access and as such for local food prices (Mellisse et al 2017)
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