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Livelihood Diversification and Natural Resource Access

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This paper provides a synopsis of the livelihoods approach, summarises ideas and recent evidence concerning livelihood diversification, links diversification to natural resource access considerations, considers policy environments pertinent to both diversification and natural resource access, and proposes policy areas that could form the basis of action oriented research initiatives in this area.

The paper takes the view, supported by a considerable literature and much empirical evidence, that livelihood diversification is generally a good thing for rural poverty reduction. It helps to lessen the vulnerability of the poor to food insecurity and livelihood collapse; it can provide the basis for building assets that permit individuals and households to construct their own exit routes out of poverty; and it can improve the quality and sustainability of natural resources that constitute key assets in rural livelihoods.

These effects occur because diversification widens people’s options, reduces reliance on particular natural resources, encourages spatially diverse transactions, increases cash in circulation in rural areas, and enhances human capital by providing those who diversify with new skills and experiences. These beneficial effects of diversification depend upon social attributes of mobility, flexibility, and adaptability, as well as on the ease of engaging in spatially diverse transactions. These attributes are often inhibited by local level policy environments, as well as by poor local governance, which as often as not are characterised by fees, fines, permits, bribes, licenses, roadblocks and other petty barriers to exchange and mobility. The poor find it more difficult to negotiate such barriers than the better off.

The paper proposes five policy topics that could provide the basis for policy oriented research linking livelihood diversification to natural resource access. Gender is a cross-cutting theme that should be central to all the policy topics. These are:

  • land tenure reform
  • rural taxation and business licensing (linked to decentralization)
  • migration and remittances
  • diversification & CBNRMs
  • integration of cross-sectoral thinking in PRSPs

While livelihood diversification is an established fact of rural people’s struggle to improve their lives, and an accumulating body of evidence points to the benefits of this process for both people and sustainable natural resources, poverty reduction policies lag far behind these insights. In particular, a considerable unwillingness to move away from orthodox sectoral thinking is manifested in PRSPs, and in the government expenditure plans that they contain, and almost no thought is given to constructing the elusive “enabling environments” that would make it easier for people to exercise their own initiatives in the quest to move out of poverty.

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