Rural household sources of income, livelihoods strategies and institutional constraints in different commodity contexts

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A substantial amount of research has been carried out globally and in South Africa on the socioeconomic circumstances of rural households and the strategies they adopt to deal with their daily realities of poverty, unemployment, food shortage, among others. Increasingly, the links are being made between these issues and the institutional environment in which smallholders operate. A useful analysis of the role of institutions in smallholder development must begin with an understanding of the existing livelihoods and patterns of socioeconomic participation. In Southern Africa, it is still being debated how roles for rural incomes and employment are split between farm and non-farm activities. Since this has important implications for the focus of public policy and for the pattern and extent of institutional development for poverty alleviation, it is important to examine this element and gain an understanding of the current status as well as the trends. This chapter reviews the broad development literature on income earning strategies of rural households, the motivations for diversification into different activities and the determinants of participation in these activities. The chapter further presents a review of the literature on the institutional constraints faced by smallholder and emerging farmers in general and the smallholders and communities participating in the production and marketing of the indigenous Nguni cattle in the Eastern Cape Province of South Africa, given its importance in the rural economy.