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Working paper - 29 Agriculture and Livelihood Diversification in Kenyan Rural Households

Author(s):  Kimenju, Simon; Tschirley, David



Governments throughout the developing world have for many years had a keen and sustained interest in diversifying their rural economies and the economic activities of rural residents (Delgado and Siamwalla, 1997). In Sub-Saharan Africa, this interest has been accentuated by the wave of liberalization that swept the continent starting in the early 1990s, which has driven concerns that heavy reliance on a few crops for cash income can, in an open market economy with widely fluctuating prices, lead to instability in income that threatens rural livelihoods.

It is also true that, for many households that produce primarily for their own consumption with small surpluses for sale, diversifying by adding cash crops (e.g., cotton, tea, coffee, fresh produce) while continuing to produce for their own consumption can lead to greater incomes; diversification into salaried wage labor and remunerative non-farm businesses can also greatly increase (and stabilize) total household incomes.

Thus, generally from the perspective of managing risk and associated vulnerability of rural households, and in some cases from a desire to increase incomes, farm diversification makes sense as a policy goal.

Yet it is well recognized by researchers and development practitioners that, to achieve rapid growth in incomes in rural areas and in the economy as a whole, countries must go through an agricultural transformation, and that this process involves more specialization by rural households, not more diversification. Resolving this tension between the clear benefits to poor rural households in the short- and medium-term from diversification with the long-term need for greater specialization and trade is a major policy challenge for African governments.

Meeting this challenge requires a solid understanding of the process of agricultural transformation and detailed knowledge of where different groups of farmers and different areas of the country lie in this process, so that a proper mix of policies and programs can be executed that drive sustained and equitable income growth.

This paper contributes to this process in three ways. First, it refines the understanding of diversification by identifying and quantifying different types of diversification by rural households, and by showing that diversification can proceed very differently at the level of the individual farm, the broader agricultural sector, and the economy as a whole.

Second, it adapts previous conceptual work to link these levels of diversification (farm, agriculture, macro economy) to the process of agricultural transformation. Finally, it empirically examines diversification trends in rural areas of Kenya over the period 1997 to 2007 and uses this analysis to draw conclusions regarding the progress of agricultural transformation in the country.

Specific objectives of the paper are to:

1. Identify trends in rural household livelihood portfolios within and beyond agriculture from 1997 to 2007, and to establish how these trends vary geographically and across types of households;

2. Show whether households have become more diversified or more specialized across crops (crop diversification), across crops and livestock (agricultural diversification), and across farm- and non-farm activities (livelihood diversification), and to identify how these patterns differ geographically and across types of households;
3. Establish whether maize production has responded to the marketing reforms of 1994 by becoming more spatially specialized (concentrated) within agroecologically well endowed zones, within villages of given zones, and among well endowed households within villages, and
4. Draw conclusions regarding the policy and programmatic initiatives most appropriate for Kenya at this specific point in the country’s development.

Agriculture and Livelihood Diversification in Kenyan Rural Households




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