Summary and Conclusion

The objectives of the study presented here was to analyse the livelihood strategies and em-ployment structure of people living in the six rural villages of North West Frontier Province, a land scarce region in Northwestern Pakistan characterized by widespread poverty, social, and market marginalization. Most of the past studies in the area only briefly consider quantitatively the livelihood diversification strategies and behaviour of rural households. The current study, therefore, tried to fill this gap by considering different livelihood diversification strategies and examining their determinants under the context of rural Northwest Pakistan.

The six study villages, covering an area of 6880 acres, in district Peshawar NWFP Pakistan were predetermined based on surveys in 1967/68 and 1986/87 by Goettingen University. The current study was population-based and used previously validated instruments. We wanted villages close enough to Peshawar to provide information about the extend of non-agrucultural employment opportunities for the villagers and yet distant enough to retain its village character. We conducted a house-to-house survey of six villages of Northwest Pakistan. The villages were approximately 7-23 km from the provincial capital Peshawar.

Between March and September 2005, we conducted basic survey of 2825 households ranging from 288-727 across villages, followed by a special survey of 120 households in the area. Quanti-tative and qualiQuanti-tative approaches were employed during long periods of fieldwork in 2004-05.

This included visiting for a period of several months in each of six villages, providing the oppor-tunity to gain a deeper knowledge and understanding of these communities, as well as to become familiar with the villagers and establish mutual trust. The research team consisted of three PhD students from Goettingen University Germany and four locally hired male enumerators.

The questionnaire used for the basic survey is the same as used in the 1967/68 and 1986/87 surveys. It was a quick snapshot of information related to the household and household head, resource base, credit, investment and sources of income. For the special survey, 120 households (20 in each village) belonging to non-farm and mixed income earning households were selected at random from the basic survey and interviewed. Households defined here as consisting of people who shared a dwelling and kitchen and who ate together. Out of 120 sample households,

60 were non-farm wage-salary earner households, 21 engaged in businesses while ‘mixed-income earner’ formed the remaining 39 households.

To understand the diversity and dynamics among rural livelihoods, households in the study villages were classified according to the sector from which they generate their income. Five of the categories were related only to agriculture: (a) pure landlords, who rent-out all of their—

frequently small—land, (b) owner operator farmers, (c) owner-cum-tenants, (d) tenants, and (e) livestock farmers. Five more categories were created in line with those specified for pure farmers for households combining farming with non-farming activities. Finally households, which subsisted exclusively on earnings from non-agricultural activities, were classified as: (h) only wage earners households, (i) microentrepreneurs and traders, and (j) welfare based households.

Based on the present study we conclude that informal sectors like casual daily wage earners, self-employed and petty trades dominate the job market in the area. The logistic regression on household diversity revealed that the number of household members who work and with edu-cated household head have a positive and significant effect on the probability of belonging to a diversified household (mixed income earner category).

The study using basic survey data also investigated the role of agriculture and urban linkages in the prevalence of non-agriculture activities in the study area. The Pearson correlation turned out to be significant but negative between proportion of non-agricultural workers and irrigated farmland, livestock, and proximity to urban centre. The influence of provincial capital Peshawar was more pronounced for the extension villages (Kukar & Dalazak) as there economy offered more on average in non-farm employment than the rest of the study villages. However, the prevailing non-farm sector in the study villages is informal, requiring less in assets and human capital from the workers.

This study also presented a profile of poverty in Northwest Pakistan for 2004. It assessed the magnitude of poverty and its distribution across the research villages and household categories, provided information on the characteristics of the poor, and helped identify empirical correlates of poverty. All three classes of poverty indices FOSTER, GREER and THORBECKE, 1984 were used:

the head-count, poverty gap, and squared poverty gap. The rural only farming households (HH cat. I-IV) have a very high incidence of poverty followed by the tenants with non-farm jobs (HH cat. V4) and those in only non-agricultural wage-salary earning activities (HH cat. VII).

These households are at the bottom end of the range of human capital and physical assets catego-ries. Casual workers constitute one of the poorest sections of the pure non-farming households

and, given that farm related jobs had declined in the area and casual labour increased (see MANIG, 1991; ALBRECHT, 1976; RIEKEN, 1994), these workers likely to be a growing section of the rural poor.

Considering the determinants of household poverty, the logit estimates confirm that the key factors distinguishing the poor from nonpoor are: household size, education of working adults, dependency ratio, and access to permanent jobs, government employment and self-employment.

Some of the other variables strongly explaining the likelihood of being poor are ownership of assets such as livestock and transport and location of households. The likelihood of being poor is greater in Dalazak and Kochian where there is limited opportunity for productive and secured employment and income. The remittances sent home by the migrated labour from the reference village Mushtarzai played a major role there in decreasing the incidence of poverty.

The multinomial logit model reveals the importance of individual, household and community related variables like education, age, income, household size, working members and location in household employment decisions. The non-farm informal wage activity mix being currently most common activity across the research villages is taken as a base for comparison. The likelihood of working in the formal sector (regulated jobs) versus working as informal wage worker is signifi-cantly and positively determined by age, education, household size, and residence of village Mushtarzai. The probability of choosing self employment significantly increases with education, household size, and all village dummies except Gulbela. With respect to informal wage employ-ment, the probability of farming related activity significantly increases with land and livestock ownership, other things being equal. The likelihood of remaining in mixed farming and mixed tenancy increase with age and education of the household head. Despite the limited opportunities, the current younger generation in the research area shows a higher propensity to hunt for alternatives outside traditional farming for their survival with little to do with wealth accumu-lation. The coefficient on age square is negative and significant for those engaged in formal jobs, mixed farming and land tenancy pointing to the non-linear effect of age of household head. In Northwest Pakistan, nonfarm activities have become increasingly important.

This study is an attempt to catalogue the present employment structure as well as the changes in income earning strategies between 1967 and 2005 in six villages of Northwest Pakistan. It also identified the broad features and direction of change that are transforming the research area overtime. Farming is no longer a major livelihood strategy as more and more households are switching towards non-agricultural employment. Majority of these non-farm activities are

survival oriented and have little to do with wealth accumulation. Over four decades the share of households engaged only in farming declined from 31 percent to 6 percent, while the share of non-farm activities rose from 54 percent to 66 percent. Similarly, those combining farming with non-farm activities rose from 13 percent in 1967/68 to 28 percent in 2004/05. There is not only a continuous perceptive shift in the rural occupational structure towards non-agricultural activities since the last few decades but also the shift away from agriculture is intense. The casual workers and those in permanent private jobs still dominate the village economy while the percentage of household members engaged in own businesses across the six villages have been more or less consistent through the decades. The share of those engaged in regulated government sector declined for all villages except Kochian and Dalazak. However, majority of these public sector employments constituted the lower cadre jobs. To summarize, the following processes and trends were observed across these rural villages in Northwest Pakistan:

⎯ Occupations and livelihoods in the six study villages are diversifying with occupational multiplicity becoming more pronounced;

⎯ Livelihoods are increasingly becoming delinked from farming resulting in greater number of household engaged in non-farm activities;

⎯ Majority of the non-farm occupations are insecure, low-skilled, casual and aimed at survival of the households rather than wealth accumulation; and

⎯ International as well as internal remittances start playing a growing role in household income because of mobile and delocalized livelihoods.