Rural development policies and sustainable land use in the hillside areas of Honduras: a quantitative livelihoods approach

Promising ways of promoting sustainable development in less-favored areas have long been a focus of the International Food Policy Research Institute (IFPRI). Hillside areas are an important facet of less-favored areas because they often have limited biophysical potential and attract limited public investment. As a result, poverty, low agricultural productivity, and natural resource degradation tend to be interrelated problems in such areas. In Honduras, poverty is deep and widespread, and this is especially the case in the hillside areas— home to one-third of the country’s population. The majority of these people earn their living through agriculture, as either smallholders or farm laborers. Rural poverty in the hillsides results primarily from unequal asset distribution, low factor productivity, insufficient public investments in infrastructure and services, and vulnerability to natural and economic shocks. In this research report, authors Hans Jansen, John Pender, Amy Damon, and Rob Schipper generate important information for use by decision-makers in assessing policy and public investment options targeted toward increasing agricultural productivity and household income in hillside areas, at the same time stimulating natural resource conservation. Based on detailed household- and plot-level survey data, they develop a quantitative livelihood approach and use it to assess the determinants and effects of household livelihood strategies and land management decisions in an integrated econometric framework. The authors also demonstrate how this framework can be used as a policy targeting tool, thus integrating the livelihood strategies literature with the policy targeting literature. Even though the results indicate that solutions to poverty in the rural hillside areas of Honduras are neither easy nor straightforward, the study confirms that agriculture should form an integral component of rural development strategies in these areas, where the assets held by many households are limited to unskilled labor and small tracts of owned or rented land. The results indicate that, in order to raise household incomes, public investment and policy programs addressing the hillside areas should focus on improved road infrastructure, broader land access, policies to reduce household size and dependency ratios, and the adoption of land management technologies—for example, through agricultural extension programs and land redistribution—to restore soil fertility. While investments in physical assets should be directed toward households that incorporate off-farm employment or coffee production into their livelihood strategies, agricultural training programs should target livestock producers