Livelihood Insecurity and Social Protection: A Re‐emerging Issue in Rural Development

Abstract

Risk and vulnerability have been rediscovered as key features of rural livelihoods and poverty, and are currently a focus of policy attention. The poor themselves try to manage uncertainty using a variety of ex-ante and ex-post risk management strategies, and through community support systems, but these are both fragile and economically damaging. State interventions working through food, labour or credit markets have proved expensive and unsustainable in the past, though encouraging and innovative institutional partnerships are emerging. This article argues that the way forward lies in new approaches to social protection which underpin production as well as consumption: new thinking recognises the food security and livelihood-protecting functions of public interventions (such as fertiliser and seed subsidies) which were previously dismissed as 'marketdistorting'.

4 Tomorrow's Hunger: A Framework for Analysing Vulnerability to Food Security

“…Increasing incidences of HIV/AIDS, continuing civil conflicts and political instability, increasing severe weather events and adverse consequences of globalization are some of the risks likely to cause vulnerability in the coming years (Devereux 2001). Clearly, dealing with such risks through an effective mix of ex post and ex ante interventions will be essential in moving towards achieving the global food security targets.…”

“…Although unexpected transitory risks are more eye-catching, structural or regularly occurring transitory risks often have a greater role in determining people's vulnerability by gradually but continuously wearing away risk management capacities (Tesiluc and Lindert 2002;Devereux 2001). …”

“…However, often, rural poor are not seen as profitable clients by bankers or insurance firms for a range of reasons, including moral hazard problems, information asymmetries, chronic poverty, lack of collateral, high transaction costs and weak contract enforcing environments. This has meant that formal market-based insurance, credit and savings instruments in rural areas of developing countries have largely failed to emerge (Devereux 2001;Heitzmann, Canagarajah and Siegel 2002;Holzmann and Jørgensen 2000), and thus the task of providing such services are often left with governments and/or community-based organizations.…”

“…Economic development beyond the agricultural sector can thus be used as an instrument for increasing the effectiveness of livelihood diversification (Swift 1989;Ellis 1998, Baulch andHoddinott 2000), including improving farm/non farm linkages. Changing or diversifying livelihoods is also used for ex post coping, for example through migration, to find additional sources of income, or in more desperate stages forcibly as a consequence of asset sales (Ellis 1998;Devereux 2001).…”

“…In nonemergency contexts, safety nets can also be used to reduce risk adversity and encourage diversification into more risky activities with higher returns (Drèze 1990;Sinha and Lipton 1999;Devereux 2001).…”