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

V. Ratna Reddy, M. Gopinath Reddy, Y.V. Malla Reddy, John Soussan
JEL codes: 
Working Paper No. 58 August, 2004

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
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.