Rural livelihoods, poverty, and the Millennium Development Goals: evidence from Ethiopian survey data

This paper analyses the nature of rural poverty in Ethiopia. It situates this analysis within the context of the Millennium Development Goals (MDGs) which provide an umbrella for efforts to increase incomes and improve the quality of life of poor people. Using household survey data from 2000-2005, the first third of the MDG period, the paper paints a picture of life in rural Ethiopia, specifically Amhara. <br /><br />The authors look at the role of agriculture in the lives of the rural poor, who typically farm on land owned by the government. A particular surprise of the research is the importance of eucalyptus trees to household asset portfolios. In 2005, more than 50 per cent of assets were eucalyptus trees. The authors conclude that uncertain rights over land access spur the farming of quick cash crops such as eucalyptus, despite the degrading effects this has on soil fertility. <br /><br />The authors explore data and propose ways in which to ensure that the MDGs are met. A key focus is land assets and their role in supporting the sustainable livelihoods strategies of poor rural households in Ethiopia. <br /><br />The key findings and areas of progress include: <br /> progress made in furthering education for both boys and girls. More than 80 percent of 13-year-olds could read and write in 2005, in contrast to 2000 when only 60 percent had that capability there were major improvements in vaccinating children against deadly infectious diseases (specifically polio, measles, tuberculosis, and tetanus) there was notable improvement in the number of people using and having access to a safe water supply households appeared to be responsive to real price increases and seem to have benefited from developing markets and increases in eucalyptus and animal prices. <br />The areas&nbsp;where there has been little&nbsp;progress include: <br /> incomes showed no improvement in the first five years of the MDGs, which points to the&nbsp;difficulty of even approaching real success with MDG 1 - halving extreme poverty by 2015 not only were incomes low, but households were also buffeted by shocks that caused incomes to rise and fall by one-third in a year, and there was little social support when financial disaster hit assets can help smooth consumption when incomes vary, but the households in Amhara had only animals and farmed trees to use as stores of wealth. <br />The paper's suggestions for public policy reform are that: <br /> property rights for land would be a major step toward helping each household sustain its consumption and allow it to respond optimally to market conditions. Liberalizing property rights for land would allow markets to develop that could dramatically expand households&rsquo; options, especially in the face of income drops tenuous legal rights over use of land are creating more uncertainty over whether households have rights to use land from one period to the next giving communities more control over common lands - i.e., creating common property - would reduce land degradation caused by open access. <br />Based on this analysis the paper argues that public policies in rural Ethiopia actively need to support wealth creation, with a particular focus on land reform. <br />