The Challenge Program on Water and Food: A new paradigm for research in the CGIAR - Water Scarcity, Livelihoods and Food Security - page 8

The question was whether focusing on water could lead to useful insights that
could guide interventions. But by the end of the BFPs in 2009, it was clear
that water poverty and general poverty were only weakly related. Indeed, “the
incidence of poverty and the availability of water are not necessarily linked and
severity of poverty depends on the level of control over water, rather than the
endowment” (Namara et al., 2010).
The relation between poverty and water across basins was not clear. Shifting
the view away from water to the stage of development of the basin, showed
that rural poverty was high in underdeveloped basins where agriculture con-
tributed most to total economic output.
Agricultural basins with high levels of rural poverty are characterized by
greater use of natural capital than physical capital, and reliance on local,
informal institutions rather than the formal state water resources institutions.
Industrialized basins had low levels of absolute rural poverty but varying levels
of relative poverty. Intermediate basins, which had the greatest total
populations in the BFP basins, had pockets of poverty within rapidly changing
societies (Kemp-Benedict et al., 2011).
In all basins, water scarcity often had institutional rather than physical causes,
but the relevant institutions differed with the basin's place on the development
trajectory. In agricultural basins, the dominant institutions are local and
traditional, and state institutions are relatively weak. In contrast, in transitional
and industrial basins, state institutions dominate. In these basins, rural poverty
is concentrated in specific areas that remain poor due to many causes that can
only be addressed weakly through technical increases in water productivity. In
contrast, in agricultural basins, technical improvement of water productivity
can have a substantial impact on poverty.
Interventions that give only modest increases in production, together with
reduced variability, may be enough to allow poor farmers in agricultural basins
to accumulate assets and diversify their incomes, often outside of water and
agriculture. The sustainable livelihoods framework (Box 1.4) is a useful tool
to capture modest impacts by combining all of the components of a house-
hold's assets both within an institutional context and the larger natural and
political environment. Increased financial and human capital can permit
diversification and thereby increase resilience.
Box 1.4 The sustainable livelihood framework (SLF)
“In the SLF, households deploy their financial, physical, human, social
and natural assets . . . to meet their livelihood goals.” “The SLF is a usable
way of thinking about development and poverty” (Kemp-Benedict et al.,
2011).