Determinants of household activity choice, rural income strategies and diversification - Institutional Constraints to Small Farmer Development in Southern Africa - page 56

largely due to the unprecedented expansion of social grants expenditure (Katungi et al. ,
2007). Many advocates that own agriculture continues to be the main livelihood for the
poor in South Africa but small scale agriculture is in a moribund state. The debate on small
scale agricultural development and rural poverty in South Africa remains an unsettled issue
due to continuous poverty among the rural population. A greater proportion of households
practicing agriculture is reeling with poverty.
Many still argue that agriculture has the potential to reduce poverty in rural South Africa
(Byerlee et al. , 2005, Katungi et al., 2007). Its characteristic features like the concentration of
the poor in the sector, its growth linkages to other sectors and the positive externalities from
assuring food security and reducing prices makes it an important driver of poverty. Increasing
agricultural income through investment in small scale agriculture like infrastructural
development, research and development, land reform and land redistributions have until
recently been used to promote rural income growth in South Africa. But South Africa's
small scale agriculture remains passive, so that many doubt whether this sector alone will
be sufficient to address rural poverty.
World Bank (2006) data suggest that, before the current global food and humanitarian
crises, some progress was being made towards reducing poverty on an overall basis. For
instance, it was reported that global poverty rates fell from 33% in 1981 to 21% in 2001
(World Bank, 2006). However, the fact that at the dawn of the 21 st century as much as 1.2
billion people around the world still live in abject poverty means that much still needs to be
done to achieve the MDGs (World Bank, 2006). Evidence from elsewhere in Sub-Saharan
Africa shows slow progress towards halving poverty by 2015 (Matsumoto et al. , 2006).
Further, the fact that according to the World Bank (2006), about 75% of the poor live in
rural areas, calls for deeper enquiry into the dynamics of rural livelihoods and poverty. A
logical starting point of such enquiry is gaining an understanding of the factors driving
whatever positive changes might have taken place. In that regard, it is important to ascertain
whether whatever positive trends there have been in poverty reduction are due to income
growth derived from small scale agriculture as the only rural activity, or whether they have
been due to other sources of income.
This chapter presents an inventory of rural income-generating activities and examines
income-enhancing opportunities in rural areas in order to propose a roadmap out of
poverty in rural South Africa. Specifically, this objective will be achieved by presenting an
analysis of rural income levels and poverty status in Eastern Cape Province of South Africa.
It intends to examine the nature and dimensions of income poverty in the Province and
how they relate to household activities. Specifically, this study aims to:
• identify and catalogue the various sources of income and livelihoods in the study area;
• estimate the poverty situation in the study communities in Eastern Cape Province;