Activity diversification in rural livelihoods : the role of farm supplementary income in Burkina Faso

The present study assesses the contribution of farm supplementary activities to rural livelihoods in low-income regions that are characterised by economic stagnation. Through analysing the complete household portfolio of economic activities the study identifies specific aspects of individual and household livelihood diversification. The survey was carried out in villages that are different with respect to endowments of agricultural resources and access to infrastructure. Local non-farm sectors, characterised by excess capacity, provided insufficient technological and institutional development for structurally improving the economic base in the villages. Personal status within the household, i.e. authority and gender, was a major determinant for access to farm supplementary activities. Individual characteristics, related to ability, preference, and property, appeared to be less important as determinants for actual involvement in these activities. Individual livelihoods were more specialised than commonly assumed. Attitudes towards risk had a limited impact on daily livelihoods; people who were less risk-averse selected a more diversified income portfolio. Only in the resource-poor villages, more supplementary revenues led to more efficient cereal production. The use of external inputs for crop production did not differ across farm households with different supplementary revenues. Decomposition of household income along the village income spectrum shows that availability of agricultural resources had a major impact on income level and incidence of poverty. Involvement in supplementary activities, however, had a limited effect on the income distributions within the villages. The general conclusion points to the need to emphasise that livelihood diversification, besides its functionality for mitigating income risks, is also a structural result of poverty. Therefore, income diversification itself is an insufficient device to structurally alleviate poverty, and additional attention should be given to the institutions and technologies of the different livelihood components.