The determinants of rural livelihood diversification in developing countries

The diversity of rural livelihoods in low income developing countries is re ceiving increased attention in discussions about rural poverty reduction. T his paper explores just one facet of livelihood diversity, namely the reaso ns for households to adopt multiple livelihood strategies. The distinction is made between diversification of necessity and diversification by choice. Six determinants of diversification are considered in the light of that di stinction, and these are seasonality, risk, labour markets, credit markets, asset strategies, and coping strategies. The paper concludes that under th e precarious conditions that characterise rural survival in many low income countries, diversification has positive attributes for livelihood security that outweigh negative connotations it may possess. Policy should facilita te rather than inhibit diversity. Diverse rural livelihoods are less vulner able than undiversified ones.