Beneath The Surface
Livelihood lifeline
DETAILED accounts of rural non-land capital at household level are rare in contemporary researches. That leaves us with little scope to analyse the livelihoods of the rural people and understand the dynamics of rural economy. In a Brac-backed survey of households in repeated samples, we came up with some tentative estimates of such capital endowments and changes thereof.
Lets start with total non-land capital. Rural households now have, on average, capital worth $635. This is 27% up from $500 in 2000 and implies that sample households could increase capital over time. A decomposition of the constituents of capital tends to reveal the following facts.
Non-agricultural capital (business, transport) now accounts for about 60% of the total capital ownership, and agricultural capital claims the rest. This compares with roughly 70% and 30% of 2000. This implies that between the two periods, the share of non-agricultural capital went down while that of agricultural capital went up. The decline in non-agricultural capital could be attributed to a decline in business capital: from 57% of total capital in 2000 to 49% in 2008.
Does this have to do with various anti-corruption drives taken by the government recently or due to a shift of capital from low profitable business activities to other high profitable ventures? We think more research could be done on that causal factor. Accumulation of agricultural capital increased over time: from 32% of total capital to 2000 to 42% in 2008. Again, the pertinent reason could be increased profitability of agriculture and inflow of capital in that direction.
The most serious setback was seen by industry equipment capital. It fell drastically over time, indicating rural "de-industrialiastion." Among agricultural capital, livestock and poultry capital increased from 28% of total capital to 38% of total capital. This signifies a significant emphasis of rural livelihoods on livestock and poultry.
More than four-fifths of rural households continue to bank on this capital for generating income and, more importantly, most of the rural women are engaged in these activities. By and large, it seems that the poor segment of the rural population also gained capital, possibly through remittances or credit from NGOs.
Due to shortage of space, we shall take up the case of livestock and poultry only to examine how they affect rural livelihoods, especially of the poor. One half of the total households have cattle; one-third have goat/sheep, and more than three-fourths have poultry birds. A rural household has now about 3 cows/buffalos and 7 poultry birds on average, and the endowments have increased over time. Hefty increase could be in evidence regarding goat/sheep due to special programs floated by the previous government.
The average value of livestock and poultry population per household is estimated to be $154 compared to $100 in 2000. Income generated from the capital accounted for $76 and $51 respectively. The very poor and poor segments doubled their capital of livestock and poultry and also nearly doubled their income from the possession of such assets.
Other things remaining constant (no natural hazards or virus attacks), it is estimated that the return from such assets averages 50%. Even paying a hefty interest of 30%, a household finds such capital very valuable.
The policy implication is that the government or NGOs need to expand credit on this count for two main reasons. First, livestock and poultry account for about half of the income of the very poor (owning up to 0.2 ha) and poor households (owning 0.21-0.40 ha). This must be supplemented by regular extension services needed to keep the capital generated income.
Second, as mostly women are engaged in these income-earning activities, we feel that these activities should be considered as a means to empowering them. And finally, the policy implication is to organise these tiny milk and egg producers under the umbrella of producer's co-operatives so that they can reap a fair return.
The message is that livestock/poultry constitute an important source of capital for generating rural income. The very poor and poor segments of the rural society heavily bank on these assets for generating income. In fact, almost half of the income from these activities is due to involvement of women, who work at home.
Taking all household income together, the contribution of women in income earning opportunities come close to 40% and most of that hovers around livestock/poultry rearing and homestead-based fruits and vegetables.
Homestead-based activities are assuming growing importance in poverty alleviation. Unfortunately, in most of our policy level thinking, we appear to forget that poverty could be reduced through promoting home-based agriculture. And for that to happen, the poor need required credit, extension and commitment from the government.
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