Sustaining Rural Livelihoods in Fragile Environments: Resource Endowments or Policy Interventions?

V. Ratna Reddy
M. Gopinath Reddy
Y.V. Malla Reddy
John Soussan
Working Paper No. 58 August, 2004
JEL codes: 
This paper primarily assesses the status of rural livelihoods in fragile environments with diverse resource endowments and policy interventions. The objective was to examine the effectiveness of resource enhancing policy interventions like watershed development in reducing resource endowment imbalances across villages and regions. Livelihood assessment was carried out using the sustainable rural livelihoods (SRL) framework in the fragile regions of Andhra Pradesh. Qualitative and quantitative approaches were used to assess the rural livelihoods covering all the 555 households in three sample villages. It is argued that resource endowments determine the level and dynamics of livelihoods at the household level rather than policy interventions per se. On the other hand, policy interventions, given the status and structure of the economy, only act as catalysts. Policies for strengthening the resource base are necessary but not sufficient to address the livelihood issues. In the present case it is shown that availability of water (irrigation) is more important than the recent policy interventions like watershed development for improving the livelihoods. Nevertheless, policy interventions towards human capital development (education, skills, etc) could be rewarding in the long run. Unless policies are directed towards bringing changes in natural resource endowments (especially water) at the household level, it is unlikely that the on going policy interventions would transform the rural livelihoods in the fragile environments.