Rural income dynamics in post-apartheid South Africa: implications for reduction of poverty and income inequality - Institutional Constraints to Small Farmer Development in Southern Africa - page 76

in Ndakana earned a total of R21,996.86 per annum, on average, while households in
Mlungisi received R14,769.57 per annum, on average.
More than 30% of the respondents from Ndakana had at least a member engaged in wage
employment (see Table 3.2). In the case of Mlungisi, participation in wage employment
was approximately 3% higher than Ndakana among the survey households. A total of
39 respondents, representing more than 50% of all respondents, engaged in agricultural
activities as a means of livelihood in both communities. In Ndakana, the more rural
community where field sizes are relatively larger, a larger proportion of the respondents,
about 58%, engaged in agricultural activities, and earned an average income of R1,942,
while in the peri-urban area of Mlungisi, about 44% of the respondents from that sub-
sample engaged in agricultural activities, earning slightly lower average agricultural income
of R1,396. Interestingly, for both communities, despite a large proportion of households
engaging in agriculture, agricultural incomes turned out to be extremely low relative to
other income sources.
The results show that households derived income from other sources such as operation of
own businesses, pensions and grants, and remittances from family members living outside
the community. The dominant own businesses observed in the communities were owning of
tuck-shops, vending of cellular phone re-charge vouchers (or 'airtime'), selling of vegetables,
running of taverns and shebeens (an unlicensed drinking place for alcoholic beverages)
and food processing. The data from the two communities indicate that about 18% of the
respondents in Ndakana operate their own business enterprises and 17% in Mlungisi, and
in each case, this activity contributed about 17% of household income (see Table 3.2). As
Table 3.2 revealed, pensions and grants emerged as important sources of income in both
communities, accounting for the bulk of incomes received by 64% in Ndakana and 76%
in Mlungisi. Remittances were clearly more important in the rural community than the
peri-urban community.
4.3.3 Income distribution
This study also examined the distribution of rural households' sources of income. Income
distribution implies the level of dispersion of the gross community income from a given
source, assessing whether it is equally distributed or unequally distributed (Schwarze,
2004). Provide (2006) found that unequal pattern in the distribution of income received by
rural households' leads to high levels of income inequality and this produces unfavourable
environment for economic growth and development.
Various income distribution or inequality measures exist in the literature. One approach
to measuring inequality employs the Lorenz curves. It plots cumulative total income from
each source against cumulative share of households, where households are ranked according