Rural Production and Livelihoods Systems

1. Rural Production and Livelihoods Systems The course is organised so that you will learn about the different but related aspects of rural livelihoods and production systems. For example: small-scale ‘peasant’ farm households are the main basis of the livelihoods of most of the Cambodian population. However a majority also depend on wage labour, on job migration and on the use of the commons as a source of livelihoods. In the Tonle Sap Basin and along the Mekong and other major rivers and on the coast many people are fishers rather than farmers, and fishing combines with farming and with off-farm employment in much of the countryside. .

2. Social and Economic Stratification • There are wide differences in all rural societies in the same area and village, between very poor, landless households, poor but viable households with land, and a minority of wealthy people with above average farm sizes. Often the latter have businesses as merchants or rice millers, and provide credit and farm inputs to poorer villagers. • Sociologists talk about this difference of status and economic wealth within communities as social stratification. We refer to movement from one status to another as social or economic mobility. Movement out of poverty, the subject of a current CDRI and World Bank study in Cambodia, is an important aspect of social and economic mobility. The CDRI study is one dimension of Cambodia’s strategy for poverty reduction.

3. A concern with a crisis in Cambodian rural society • We are concerned, in research and teaching at RUPP, with rapid changes taking place in the Cambodian rural economy, in the availability and allocations of land as rural populations increase in numbers, beyond the capacity of the land to support them, and thus become increasingly dependent on getting their livelihoods outside agriculture. • We are concerned with the growth of rural poverty and widening gaps between rich and poor which have arisen as a result of these changes, and as a result of natural disasters such as the floods of 2000 to 2002. • We are also witnessing changes in the nature of poverty: that is, between the poor who manage well enough to sustain the lives as part of the system, and those who are destitute or exposed to destitution – who are living ‘on the edge’. We discuss below how movement out of poverty is most often a matter of diversifying livelihoods and we examine to what extent this livelihoods diversification is brought about as a rural household strategy.

4. Course Design and Examination • The course is designed to lead to an exam in which there will be three optional questions about these subject areas and to a final assignment. • You will be asked to sit two exams in each of which you will answer three essay questions; so you will answer six questions in total: one about each of six areas of rural livelihoods and production systems. • The final assignment will be in a seventh area of rural livelihoods and production systems, to do with government, commercial or civil measures to create sustainable livelihoods and reduce rural poverty. It may involve a field study for those able to take part.

5. Rural livelihoods in the Cambodian economy • 59% of Cambodia’s population get their livelihoods directly from rural production systems, including farming, fisheries and forestry (World Bank, Nov. 2008 Report). • Agricultural production systems are mainly based on family land ownership on small farms, but also include tenant farming, agricultural wage labour, off-farm employment. Most farm households also fish and gather forest products, and fishing is the primary source of livelihood for many households living around the Tonle Sap, in riverside villages and on the coast. • A majority of rural households also depend on wage labour and migrant labour of some members of the household. • So the rural population also depends for its livelihoods on industrial and service sectors of the economy, especially in the garments industry, in construction and in tourism. • About 20% of the population live in urban areas, and depends for their livelihoods directly on service and industrial employment, but most also maintain social and economic connections with their villages and households of origin. (RUPP IDRC Working Paper No. 1, 2008).

6. Meaning of livelihoods • By livelihoods we mean the material means, production, consumption and welfare systems and resources by which people live, survive and maintain their wellbeing. To do so they draw on human, physical, natural, financial and social capital.

7. How are livelihoods socially organised • The rural household is the social unit which is mainly responsible for the management of the livelihoods of its members. • In everyday life we use the terms ‘household’ and ‘family’ to mean almost the same thing. As professional sociologists, economists or demographers we have to draw a distinction between household and family.

8. Household and Family • The household is the unit in which people organise their lives, usually in the same house and with one household head. • The family is a wider unit or network of people related to one another by kinship or marriage. • Researchers and planners, for example, the National Census and National Socio-Economic Survey, use the household as the basis of studying demographic, social and economic development. • In this course we will mainly talk about the household as the basis of rural livelihoods and production systems.

9. The household • We use the concept of the household in studying both rural and urban society and livelihoods • A household is a domestic group living under one roof or in one compound and sharing the same source of wealth or livelihood • The members of one household eat and in other ways consume their resources together e.g. they have common access to money for health, education and clothes • They produce and consume and make decisions about the household under the authority of one household head

10. Livelihoods and Rural Poverty Poverty can be defined as the absence of adequate livelihoods • Poverty is most acute: • in remote rural communities and households and • in those which have recently migrated to try to improve their lives to other rural areas or by moving to Phnom Penh. • In rural areas the poorest are those who are ‘late comers’. They often do not have any land or have inadequate land and are remote from markets and services. • Often poverty means that they do not have enough water, and physical resources. • Lack of access to financial, health services and schools, markets, transportation and employment opportunities.may mean that they are trapped in poverty. • People settling in the past decade in Battambang, Banteay Meanchey and Otdar Meanchey, for example, are often dependent on illicit and risky cross-border agricultural labour migration to Thailand (RUPP IDRC Working Paper No. 4).

11. Differential wealth and poverty • In all rural communities we find a gap between the poor and the rich, often marked out by those who have large areas of land and those who have little or none. • Those who have large areas of land are often also those who have local businesses. • They are often also leaders in the rural community.

12. Land Shortage and Landlessness • Because of population increase and diminishing resources, a majority of the community have inadequate land to maintain their livelihoods only by farming. Most farms in the main rice producing areas are of between 0.5 and 1.0 ha. • Land shortage and landlessness is the main factor in extreme poverty. • Many rural households are landless and are tenants or share-croppers on the land of others in the community

13. Land Transfers • A big problem in rural development is the transfer of land to large commercial land owners and forestry companies. • About a fifth of people living in the rural areas are landless and live by agricultural or other labouring and by trading and providing various services to others in the community • Some work in the wider national economy, in the construction, garments, transportation or tourist industries locally or as migrant workers;

14. Access to the means of improvement • Poverty may also mean not having access to decision making about maintaining or improving livelihoods • Leaders in the community are most often the wealthier household heads and are male. The rural poor and women household heads are often disempowered: they do not have means to participate in decisions affecting their livelihoods • Lack of access to schooling and health facilities, affordable credit, employment, land and other natural resources further disempowers the rural poor • We sometimes say that they are marginalised: they are living ‘on the edge’ of society and the economy • They may, lacking education or land or capital, be unable to move out of poverty

15. Livelihood resources and capital We can measure the quality of people’s livelihoods by their access to resources and capital: • human capital includes labour, education, practical and social skills • physical capital includes houses, land, water, trees, cattle, ploughs, ponds, wells and water pumps • financial capital includes money and credit • social capital includes household and community structures, family, friends, neighbours and associates, market structures, health and educational services, religious and political structures, support groups and networks and management systems

16. Poverty Reduction • Poverty equals a lack of adequate livelihoods Support for rural livelihoods and for their development and sustainability is a key strategy in attempts to reduce or eradicate rural poverty • So to reduce rural poverty we need to understand how rural livelihoods are created, organized and sustained • Key factors are the role of the rural household and of the community

17. Studying Rural Livelihoods: Government and NGOs employ social and development scientists to study rural communities in order to be able to understand rural livelihoods and so to reduce poverty. The academic disciplines employed in studying rural production and livelihood systems are to do with the characteristics of livelihood resources and capital; secondly with how they are structured and organised in rural society, primarily in communities and households and in the agrarian system. The concerned disciplines are mainly: • agricultural and environmental science • sociology and anthropology • economics

18. Studying rural households • In studying rural livelihoods we begin by studying households. In any research which you may do as a student or as a researcher the household is the basic unit in which people obtain their livelihoods. • The household is the unit which is surveyed in the national census and national socio-economic, demographic and health surveys.

19. Household, family and social network • For purpose of managing their affairs and livelihoods, households may include some people from different families. • Families on the other hand may be scattered among the community or far away, in cities or other rural areas, and may include cousins or aunts, uncles and grandparents living in different households. • In the rural community a household may rely on or cooperate with other households, especially with households of family members, in social or economic activity, e.g. in ceremonies and festivals and in rice farming. • They may also combine with other non-family households of neighbours or friends in these activities. • We say that these working and social relationships are part of their social capital, and part of their social network.

20. Sustainable livelihoods development • The idea or concept of sustainable livelihoods development has become central to strategies for rural poverty reduction. By sustainable we mean that the livelihoods of the individuals, households and communities concerned and the measures introduced for their improvement will be sustained; livelihoods will be improved on a lasting or permanent basis by the measures and strategies which are adopted and the measures and strategies themselves will be sustained. We also mean that the resources on which they base their livelihoods are kept safe and are available for future generations; in other words, sustainable livelihoods do not damage or diminish the environment.

21. Livelihoods Diversification • Perhaps the most important and effective way in which people maintain their livelihoods is that of diversifying their use of labour and sources of income and means of production. We talk about this as livelihoods diversification. • One example is when they change from crop to livestock production, or to fishing; • Another is when they develop irrigation to permit dry season irrigation; • Another is when they collect natural products from the lake, river or forest; • Another is when they use their labour to work on the farms of others in the community; • Another is when members of the household migrate to work in non-agricultural employment • And another is when they migrate to seek land and agricultural employment in a different region of Cambodia.

22. Rural Livelihoods Diversification and Poverty Reduction • Frank Ellis (Journal of Agricultural Economics – Vol.51, Number 2, May 2000) argues that “under the precarious conditions that characterise rural survival in many developing countries” (e.g. population increase and diminishing farm sizes and natural resources in Cambodia) diversification is an important means of livelihood security. He argues that: • Policy (both of government and of NGOs and international agencies) should facilitate rather than inhibit livelihoods diversity in rural households; and says that: • Diverse rural livelihoods are less vulnerable than undiversified ones.

23. Determinants of Livelihood Diversification • Ellis has identified six main determinants of livelihood diversification or of multiple livelihood strategies: • seasonality • risk • labour markets • credit markets • asset strategies • coping strategies In RUPP research and in this course we will examine these factors and also a seventh: • demographic structure of the household, and thus labour availability and type

24. Four case studies of rural livelihoods diversification • In this and my next two lectures I will discuss Frank Ellis’s article, and describe livelihood systems and livelihood diversification in three different rural communities in Cambodia. • They are communities which have been studied in a research programme being conducted by RUPP: • Villages in Baray and Santuk Districts of Kampong Thom Province affected by the construction of the Stung Chinit Irrigation Project (RUPP IDRC Working Paper No. 3) • Chong Kneas, a fishing commune on the Tonle Sap in Siem Reap Province (RUPP IDRC Working Paper No. 6) • Takhream, a main rice growing commune in Battambang Province (RUPP IDRC Working Paper No. 4)

25. Job Migration • I will also, in later lectures, discuss the factors involved in job or wage migration, to Phnom Penh and other city locations, and to areas of agricultural wage labour (RUPP IDRC Working Papers No. 1 and No. 4). • Questions of importance in respect of wage migration is that of the role of migration in the economics of the household – i.e. its function as a form of livelihood diversification of the household – and the management of wage migration: who organises it and with what purposes?

26. Agricultural and Fishing Livelihoods • The Cambodian population which gains its livelihoods from agriculture does so either directly as farmers or indirectly by working in the agricultural economy as traders, processors or transportation workers. • Similarly most people gaining their livelihoods in fishing do so directly as fishermen and women, but many also work in fish processing, marketing and transportation. • By contrast with America or Europe, however, comparatively few Cambodian people work in packaging and retail marketing. The Cambodian economy is more energy efficient than these industrial economies, where, for every unit of energy used in agricultural production, six units are used in packaging, transportation and marketing.

27. Rural Production Systems • Farmers are good agricultural economists, and know their micro-climates, soils, water availability, crops and animals very well. Government or NGOs may be able to add to this knowledge, e.g. by improving animal health and husbandry, by providing high yielding seeds, or by improving the market, but they need first to understand the farmer’s farming system and the strategies which farmers adopt for livelihood diversification.

28. Diversification • Although the majority of a rural community are likely to be farmers or fishermen, there are always people with other occupations: traders, teachers, mechanics, motodop drivers, truck drivers, administrators, health workers, hairdressers and tailors, and so on. In rural development programmes diversifying livelihoods by creating jobs outside agriculture is an important way of increasing incomes and reducing poverty. This can be either in the rural community itself or in cities.

29. Factors in Livelihood Diversification • Ellis describes six factors in livelihoods diversification: • seasonality • risk management • labour market • credit market • asset strategies • labour strategies To these we can add a seventh: • demography: the demographic structure of the rural household.

30. Seasonality • The creation of wealth for purposes of the livelihood of the rural household is determined by an agricultural production cycle determined the seasons. This dictates the need for labour at critical times in the agricultural cycle: especially those of ploughing, planting and harvesting. • A parallel natural resource cycle determines accessibility of forest products and of fish • At some times of the year, when these activities are dormant, there is a labour surplus in the household.

31. Risk Management • An important factor in the farmer’s production decisions, including deciding about taking on a new crop or production technology, is that of risk management. The farmer has to be sure that, in the face of possible disasters such as drought or flood, he will have enough yield, or keep crops in store. • A basic need for the Khmer rice farmer is that of having sufficient rice or the funds or credit to feed the household and meet their essential needs.

32. Labour Markets • The use of the household labour for farm production is an important part of the labour market. However labour demand for farming is determined both by the season and by farm size: if the household farm is small they are likely to have surplus labour. They then have to choose between strategies of working on the farms of others as wage labour, renting or share cropping the land of others, or sending members of the household as migrant workers. • The possibility and returns from migrant labour are determined by the wider economy, and include the availaibility of migrant agricultural labour on crop plantations, and work in cities, including the garment, construction and other industries.

33. Credit Markets

34. Asset Strategies

35. Coping Strategies

36. Potential Increases in farm incomes • Agricultural researchers believe that farm incomes can be increased in Cambodia by two main possibilities: A. Intensifying production systems, especially of rice, in two main ways: • yield increases by means of improved rice varieties, planting systems, fertilizers and composting, and water control; • cropping intensities, meaning using the land for two or three crops instead of one, usually by means of irrigation in the dry season. However, dry season irrigation has only a limited potential in Cambodia because of its topography, which does not permit many large scale reservoirs.

37. Market value added improvements • By market chain, value added, improvements: • Improved mechanised threshing and milling of rice; • Improved storage; • Improved market structures and market information • Improved seeds and chemicals supply systems • Improved farmer and trader knowledge

38. Livelihoods Diversification

39. Livelihoods Diversification in Baray District, Kampong Thom • A study was undertaken of farm households affected by the creation of the Stung Chinit irrigation and reservoir system as the basis of a resettlement plan • By resettlement we mean all actions to restore livelihoods, including compensation, land restoration, training and credit to permit agricultural or business diversification, allowances for vulnerable households etc. Only a few households had to be physically resettled in the Stung Chinit project.

40. Location and history in livelihoods diversification • The socio-economic survey of households affected by the spillway, canal and reservoir systems showed that there were wide differences between types of communities and households related to their location and history. They were as follows: • A. Many households belonged to villages, for example Palaeng, along the highway, National Road No.6, but had farm land along the main canal, and would lose land when the canal was widened • We found that a high proportion of these households had livihoods based on salaried jobs and commerce and that about 20% of households at Palaeng had daughters working in garment factories in Phnom Penh

41. Rice farmers farming in the reservoir • Farm households in Taphoek village (and also Snao village to the north in Santuk District) are mainly rice farmers. Their villages were relocated from the reservoir area by the Khmer Rouge thirty years ago. • They continued farming in the valley close to the river and main canal where the Khmer Rouge made a dam and where the project would now make a spillway. • They had few other sources of livelihood but, some farmers grow water melon in the dry season by pumping water in low-lying areas. Some women kept pigs and chickens and wanted to increase their livestock • Most of these farmers would lose from 30% to 100% of their land when the reservoir was flooded.

42. Farmers in villages to the south and north of the reservoir • Farmers at Sampov Loen about 8 kilometres to the east of the spillway are close to the upland secondary forest which runs along the course of the rive to north and south. • Families were resettled there from Takeo by King Sihanouk in 1967 when they were displaced from their homes and farms by the railway. They grow rain and flood fed rice on land above the level of the reservoir. They also practice slash and burn (swidden) rain fed rice agriculture in the nearby secondary forest upland, and some have chamcar tree orchards. • The women of Sampov Loen obtain an income by making carrying baskets used in farming and construction.

43. Bamboo collectors • About 20 households living along the north bank of the main canal are landless and collect and market bamboo from the forest as their only source of livelihood • Their houses would be destroyed by the widening of the canal, and they needed to be relocated at a position where they could continue bamboo collection

44. 32 Households at Kampong Sdach • Households at Km.16 on the south bank of the Stung Chinit have their houses sited on a terrace of land running along the river bank. They get their livelihoods from three sources: • floating rice production in low basins (tropaeng) flooded by the river during the rainy season; • timber extraction and sawing of trees from the upstream forest • cashew nut production on chamcar orchards

45. Sons and Daughters • Possibly 50% of sons and daughters of all farm households expected to continue farming and would inherit the farms of their parents or would marry into other farm families • 50% were already working or wished to work in occupations outside agriculture, as construction workers, garment factory workers, mechanics, hairdressers, tailors etc

46. Livelihoods and Roads and Highways Construction • When villagers living on the edge of the irrigation area in the Stung Chinit Irrigation Project were offered the option of a road along the first feeder canal, they asked for it to be a straight road to connect with the road to Santuk, even though it would mean losing some of their rice land. The reason is that access roads benefits and provides a sustainable basis of rural livelihoods more than any other development.

47. Livelihoods Diversification at Chong Kneas • When the local economy becomes more complex and more closely linked to a commercial market livelihoods become more diverse and complex. • At Chong Kneas, a fishing, passenger and cargo harbour has developed close to Siem Reap in the north of the Tonle Sap. About a third of households have big boats with engines and large fishing nets. Others provide boats for tourists visiting the lake.

48. Service trades in the fishing sector • To service the fishing and tourist industry there are engine repair and supply shops, generator shops, gasoline and diesel depots. There are fish marketing traders and fish processing areas as well as hairdressers, karaoke bars, schools and a health clinic, all operating on boats or floating platforms on the lake. There are more than fifty different occupations.

49. Port workers • About one hundred households in one village of Chong Kneas Commune have their houses on land and are mainly port labourers and petty traders. • They are young recent immigrants, are among the poorest households and have small temporary houses

50. Tourist Workers • About a hundred households have household heads or sons working as boat workers to take tourists on the lake to look at the floating villages and to go to Prek Toal. • Many women work as food sellers or petty traders selling food mainly to Khmer day tourists from Siem Reap. • There are several floating tourist restaurants and fish museums and an environmental centre run by an NGO Osmose.