Digging deeper into living income: policies and strategies for poverty reduction in tropical value chains

Abstract

Rural poverty alleviation programs have adopted living income benchmarks as major strategic focus. Much of the discussion centres around appropriate measurement procedures, while far less attention is usually given to concrete policies for reducing living income gaps. This article digs deeper into possible strategies for smallholder farmers and midstream value chain agents to reduce living income gaps. It identifies the determinant of living income differences between countries, and discusses policy options to create better prospects for improving living incomes. We rely on comparative cross-country data on living incomes and poverty lines combined with structural country-level characteristics and stylized farm-household models to identify major leverage points for mitigating registered living income gaps. This analyses combines case study material from agri-food value chains in sub-Sahara Africa with statistical analysis on income gaps, drawing on theoretical discussions on the structural causes of income differentiation. Increasing our insights on the drivers of income differences and income gaps might enable us to bring the discussion on living income from principle to practice.