Income-Generating Activities - Action Against Hunger

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This diagram attempts to visually explain the processes through which a population
becomes vulnerable in the face of various adverse factors. For example, a community
without access to adequate sanitary care faces increased risk of the spread of
an epidemic, through which the human capital will decrease, reducing the capacity to
carry out traditional subsistence activities. As a consequence, their livelihood will be
in danger. In other contexts, natural disasters deprive entire populations of their productive
assets and their natural resources, severely undermining their capacity to
meet their basic needs. These are only two examples of how livelihood strategies are
fundamental in order to achieve acceptable living standards.
The composition and the income level, either cash or in kind, of an individual or
a household, are the most direct and measurable results of livelihood strategies in a
determined moment (Ellis, 2000). Therefore, even though these two concepts are not
synonymous, they are closely related.
In order to manage and minimize risks, vulnerable populations, either urban or
rural, often diversify their income sources 6 . Access to and the ability to participate in
markets are necessary preconditions for the viability of these strategies.
II. The role of the market
The market is part of every person’s daily life: The vulnerable population depends
on formal and informal markets 7 to sell products, offer labour, finance their activities,
and, of course, obtain basic goods, such as food. However, reality demonstrates
that this population may face certain restrictions in access to markets, and may miss
out on the opportunities that the market brings in terms of participation in economic
activity and improvement of living conditions.
Difficulties and imperfect functioning of markets can be observed at distinct
levels:
• Difficulties in terms of access:
– Physical access: lack of communication and transport infrastructure, especially
for poor rural communities, often located in isolated zones, which impedes
contact with markets.
– Access to information: in many cases information on supply and demand is indispensable
in order to participate in and interact with the market. Knowing
how to find reliable information is of key importance.
6
Throughout this book the concept of income will refer to monetary resources as well as those in kind.
7
Activities that do not appear in statistics or fiscal records are found within the informal market or informal
economy.
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INCOME GENERATING ACTIVITIES: A KEY CONCEPT IN SUSTAINABLE FOOD SECURTIY