Rural Income Generation and Diversification - A Case Study ... - Doria

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The Simpson diversification index was used 55 to compare degree of the household diversification
between the two periods of time. The higher the index, the more diverse is the income
portfolio: it was 0.24 in the 1985/86 data and 0.40 in the 2003 data, suggesting a change in
income composition. The lower index in 1985/86 implies specialisation, while diversification
had gained ground by 2003. In 1985/86, the lowest income group had the highest diversification
index (0.19 against 0.33 and 0.20 for the first and second terciles, respectively),
indicating higher incomes for the more specialised households, whereas the situation was the
opposite in 2003 (0.35, 0.41 and 0.44, respectively). The change in diversification patterns
was geographically uneven: for example, the Chipata district had the lowest index in
1985/86 (0.12), and the highest, on average, in 2003 (0.48).
Finally, the 67 households were divided in income terciles based on their total income (both
the 1985/86 and the 2003 datasets). It appeared that one third of them had remained in the
same tercile during both periods, one third had dropped to a lower one, and on third had risen
to a higher one. These changes imply that some of them had the potential to escape from
poverty, while others were in danger of becoming more deeply entrenched (see the household
cases in Annex 5). One major factor explaining the changes was the cultivated land per
capita during the 1985/86 season: the upwardly-mobile households had, on average, larger
areas than those remaining in their original tercile. Moreover, the households in the middle
and high-income terciles with less than the average amount of cultivated land had a tendency
to fall into a lower tercile. Also the proportion of farm income differed between the household
categories: the ones remaining in the original tercile had a minor increase in the share of
farm income, while the increase was statistically significant (from 37 per cent to 53 per cent)
for the upwardly-mobile households, and for the households falling into lower income tercile
the farm income share also declined significantly.
6.2.5 Changes in farm income
Crop production
The 2001/02 growing season was exceptionally dry in Zambia, and some parts of Eastern
Province also suffered from the drought, which may have had a negative impact on fertiliser
response and yields in general. According to the Central Statistical Office (2003), however,
the total maize harvest of 2001/02 in Eastern Province was not much different from the harvests
in the 2000/01 and 2002/03 seasons. Del Ninno and Marini (2005) concluded from the
FAO data that the 2001/02 loss of maize in Eastern Province was approximately five per
cent, and represented five per cent of the total loss in Zambia during that agricultural year.
The situation was much worse in Southern and Western Provinces, while the overall loss in
harvest was 25 per cent.
55 Diversification index D=1-