Diversify Livelihood Risks
Livelihood diversification can improve resilience if efforts to increase income streams and assets diversify potential risks.

Livelihood diversification has long been recognized as a risk management strategy and source of resilience. However, it is complex; its association with positive or negative changes is not always clear. Diversification of activities may be less important than diversification of risk. Context is important in shaping the risk environment and range of livelihood opportunities open to people.
Approach
Diversifying livelihood risks can be achieved through several approaches. Stepping up within, stepping partially out, or moving entirely out of agriculture/livestock are possible strategies. Each of these methods diversify livelihood risks in different ways.
By stepping up within agriculture/livestock, agricultural diversification buffers risk. It increases agricultural trade and income — improving ability to build savings and/or buy insurance. By stepping partially out of agriculture/livestock, engaging in livelihoods with different risk profiles becomes possible. This complements agriculture-based livelihoods through activities related to agriculture/livestock or migration to urban labor markets. Finally, by moving out of agriculture/livestock entirely, movement into livelihoods with different risk profiles can be achieved.
Evidence
In Kenya’s Northern drylands, pastoralists gained greater control over natural resources by commercializing their activities. They were able to “step up” by amassing larger herds. This allowed them to privatize key rangeland resources and capitalize on growing demands for meat. As a result, they became better suited to withstand and recover from drought and shocks.
“Stepping up” or “moving out” may not be an effective strategy for all farmers though. Poorer individuals with smaller herds are less able to capture private land and market opportunities. Consequently, they often struggle to withstand recurrent shocks.
Evidence on "stepping partially out" through migration suggests removing capital constraints to migration can positively impact seasonal hunger and well-being. An experimental study in Bangladesh found that households given cash or credit travel subsidies were more likely to migrate. The migrants saved and carried back about half of what they earned. Their families consumed more calories per person per day, raised per capita expenditures, increased protein consumption, and spent more on child education. The same amount of food in the form of food aid would cost five times as much. However, changes in the demand for migrant labor and the long-term social costs of splitting up families for extended periods will influence the ultimate effect of migration on resilience.
Featured Resources
Resource
This report presents the findings of a Livelihoods Diversification Analysis that aims to inform the development of future programmatic...
Training
This course was designed for USAID staff and implementing partners, and explores the types of strategies, assets, and resources people can use to...
More Resources
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Event
Join panelists from TANGO International and USAID for a presentation of the key findings from the RISE I (Resilience in the Sahel Enhanced) recurrent monitoring surveys (RMS). The RMS followed a group of RISE I households from August 2018 through April 2019 in both Niger and Burkina Faso to...
EducationNutritionGovernanceDiversify Livelihood RisksBurkina FasoNiger -
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Presentation slides, Resilience Evidence Forum October 2-3, 2017
Climate Change AdaptationDiversify Livelihood Risks -
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The objective of this research is to provide implementing partners, the Office of Food for Peace (FFP), the Food and Nutrition Technical Assistance (FANTA) Project, and the United States Agency for International Development/Center for Resilience (C4R) with insights into factors that strengthen...
NutritionEvidence and AnalysisDiversify Livelihood RisksGender EquityMali -
Event
REAL partners, USAID staff, implementing organizations, analysts and policy makers gathered in a day-long workshop to discuss unique resilience evidence emerging from the Horn of Africa and how the findings can be applied for programming.
Evidence and AnalysisDiversify Livelihood RisksKenyaEthiopia -
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Resource
The evidence, and the resulting discussion, presented during the 2017 Resilience Evidence Forum — hosted in Washington D.C. by the USAID Center for Resilience — are presented in the Resilience Evidence Forum Report.
Conflict and FragilityUrban ContextCollaboration and Collective ImpactValue for MoneySustainable Poverty EscapesDiversify Livelihood RisksSocial ProtectionGraduationSocial CapitalFinancial InclusionHuman CapitalAspirationsGender EquitySocial InclusionEcosystems and Natural Resource Management -
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Resource
This research brief looks at the benefits and
comparative advantages of the group model for youth in agriculture in northern Uganda as well as
the possible challenges associated with youth
associations.AgricultureDiversify Livelihood RisksFinancial InclusionSocial Inclusion -
Training
This course was designed for USAID staff and implementing partners, and explores the types of strategies, assets, and resources people can use to diversify and reduce their exposure to risk.
Diversify Livelihood Risks -
Resource
The Livelihoods Diversification Analysis (LDA) has two key functions: (1) to inform ongoing and future iterations of resilience programming in Niger, Burkina Faso, and potentially other Sahelian countries, and (2) to contribute more broadly to strategic thinking on holistic programming that...
Diversify Livelihood RisksNigerBurkina Faso