Around 70% of the populations of South Asia rely on agriculture and renewable natural resources for a large part of their livelihoods.

Historically, there has been a trend in all countries for people to move from rural to urban areas, and even within rural areas, to move out of natural resource-based occupations.

Yet, these transitions are neither simple nor painless: some people are able to climb out of poverty by specialising in some new full-time occupation, but for many, the only way forward is to diversify into new, part-time activities, taking up some and dropping others as circumstances allow. Diversification is far more widespread and complex than many had thought. But it is not always a positive ‘exit': those denied access to NR may have to diversify out of desparation, and become caught up in a downward spiral.

The Livelihood Options study and drew on evidence from India, Bangladesh and Nepal. Its aims were to identify how policies can be changed to support positive exits via diversification, and how to reduce the impact of negatives.

Within India, it examined:

• How and how far existing policies have aimed to enhance the positive options for diversification and reduce the negatives;
• How far these policies have actually impacted at village level;
• What can be done to modify existing policies, or design new ones to achieve greater impact.

Within India's federal system, some central policies reach down to village level directly, others are adapted by the individual States, and State governments themselves design and implement policies of their own to reflect their political priorities. For these reasons, the study was based in three States of contrasting political and administrative characterisitics: Andhra Pradesh; Madhya Pradesh and Orissa. The study focused not only on the ‘downward' flows of government support, but also on people's capacity to voice demands and to influence the type and quality of service delivered.

The main methods that the study used include:

• a year-long study of selected villages;
• longitudinal comparisons between earlier surveys and current situations in some villages;
• participant observation and the collection of life-histories;
• reviews of secondary sources;
• key informant interviews.

The study focused on policy interventions within three broad arenas:

• microfinance , including credit, savings and insurance provisions;
• the employment (and self-employment) effects of the above, but also wider questions of migratory employment;
• safety nets , including employment assurance and price subsidies.

Research Questions

The types of question that the research addressed include the following:

• How are the poor being affected by changes taking place in the Indian rural economy?
• How have systemic transformations (eg in trade liberalisation, the role of the state, the investment climate and the creation of infrastructure) affected rural livelihoods in the study areas?
• How and why are the rural poor diversifying?
• How do formal and informal institutions affect their access to opportunities?
• How do market forces (reflecting ecological, demographic and economic variations) affect access and vulnerability?
• How do state provisions affect access and vulnerability?
• What influence do State and local governments have on the design and availability of these provisions? Do tensions between elected officials and civil servants, or between elected officials and informal resource user-groups, influence the availability of provisions?
• Who gains and who loses from these processes?
• How can access by the poor to these provisions be improved upon?