Abstract
Diversification of livelihoods is a commonly applied strategy for coping with economic and environmental shocks and instrumental in poverty reduction. In this paper, we have assessed the role of livelihood diversification in household well-being in Humla, a remote mountain district in west Nepal. Employing the data produced from household surveys, we developed a composite household well-being index incorporating four components and 15 indicators, and measured the effect of diversification on it. Results suggested a uniform pattern of diversification in terms of the number of activities undertaken for livelihoods but a highly varying degree of resultant well-being across households. Analysis showed that well-being was not associated with diversification per se but rather on a households' involvement in ‘high return sectors’ such as trade or salaried job. Because involvement in these remunerative sectors is determined by various financial, social and human capitals, poor households were unable to combat the entry barrier and were prevented from getting access to them. In this way, livelihood diversification was found to have a highly skewed effect leading to inequality of income and well-being. This, in turn, is likely to risk depriving the poor households from exploiting new economic opportunities even in the future.
Highlights
Subsistence producers and small farm wage laborers in the rural areas of low-income countries constitute over two thirds of the global poor and food insecure populations (IFAD, 2010; FAO et al, 2014)
Our findings qualify the general understanding in rural livelihood diversification and well-being by demonstrating that a household can enhance well-being only when it pulls into its livelihood portfolio the high return sector(s) among various offfarm opportunities available
Pulling the high return sectors is not a matter of free choice. This can be better explained using a schematic framework (Fig. 4) which recognizes that offfarm sector for diversification is rooted into and differentiated by background pre-conditions reflecting various assets: both tangible and intangible assets at the household's disposal
Summary
Subsistence producers and small farm wage laborers in the rural areas of low-income countries constitute over two thirds of the global poor and food insecure populations (IFAD, 2010; FAO et al, 2014). The most significant gains in global poverty reduction can be achieved by interventions targeted at rural livelihoods to address these vulnerabilities. The understanding of local livelihood context, the sources and nature of risks and the coping behavior of the communities and their efficiencies is important for the success of antipoverty policies because vulnerability is highly contextual to political, social, economic and historical realities of specific places (Turner et al, 2003; Wilbanks, 2003; O'Brien et al, 2009)
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