Introduction to livelihoods and agriculture

Seventy five per cent of the poor live in rural areas, dependent on agriculture and natural resources for their livelihoods. Agricultural growth contributes to poverty reduction by improving rural incomes, utilising the productive capacity of poor people’s land and labour assets, and providing food for both urban and rural poor.

Agriculture stimulates economic opportunities and diversification into the non-farm sector where growth is generally faster and labour productivity and wages are higher. According to the World Development Report 2008, GDP growth in agriculture is about four times more effective in raising incomes of extremely poor people than GDP growth originating outside the sector.

Agriculture in developing countries currently faces a number of challenges:

• despite the recognised importance of agriculture for poverty reduction, only 4% of official development assistance goes to agriculture
• smallholder producers now compete in globalised economies with higher standards of food quality and safety
• the HIV & AIDS pandemic has dramatically changed the demographic composition of many rural communities and diminished the transfer of agricultural knowledge
• climate change and increasing population density are depleting the natural resource base that rural livelihoods depend upon
• significant gender inequalities exist in poor people’s access to key productive assets and services including land, labour, financial services, markets, water, rural infrastructure, technology, and other inputs.

Livelihoods approaches have their origins in agriculture and rural development thinking. According to the 2006 OECD DAC Guidelines on Promoting Pro-poor Growth, designing an appropriate policy environment for agriculture requires in-depth knowledge of the livelihood strategies of rural households and consideration of ways to protect and promote them.

This section illustrates how livelihoods approaches can contribute to our understanding of agricultural livelihoods and the rural context, providing recommended reading and regularly updated resources.