A model of conservation adoption, diversification and household income, including farm and off-farm sources was formalized, wherein households simultaneously allocate assets to different activities. The mapping of assets to household income through both off and on farm activities can conceptually be considered as a production process, with assets corresponding to factors of production and income as the output. Either adoption of conservation technologies and farm output diversification are influenced by participation in natural resource management programs. Therefore, these technological improvements should foster farm production and productivity and, consequently, should be reflected in a greater household income,. Finally, household income improvement is considered a necessary condition for sustainability of the changes introduced by the projects. Overall, the results indicate that the variables more directly reflecting land allocation, such as area with staples and cash crops, output diversification and conservation practices are associated with the greatest gains in household income. Output diversification significantly decreases income from staple crops and greatly increases cash crop income. These results reaffirm the strategic role of diversification in fighting rural poverty. However, gains stemming from a more diversified income portfolio do not occur without cost, since an extra item added to the farm plan implies a reduction in the production of corn and beans (staples). This trade-off between diversification and subsistence food production suggests that switching to a more market-oriented production pattern may increase household food insecurity.


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