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Cash transfer programs are increasingly utilized to combat poverty and hunger while building the human capital of future generations; however, they have been faulted by some for failing to build the productive capacity of current generations. This article analyzes the impact of the Malawi Social Cash Transfer Scheme on agricultural production. The results show strong increases in ownership of productive agricultural assets, in time devoted to household farms, and in food types consumed from own production, coupled with a sharp decrease in ganyu labor, which is often used as a coping mechanism once food stores have been depleted. These results are most likely achieved by helping farmers overcome credit and liquidity constraints. This research shows that cash transfer programs can help the capacity of extremely poor farm households to expand agriculture production even if the goal of the program is focusing on other dimensions of poverty.

This paper uses a newly constructed cross country database composed of comparable variables and aggregates from household surveys to examine the full range of income generating activities carried out by rural households in order to determine: 1) the relative importance of the gamut of income generating activities in general and across wealth categories; 2), the relative importance of diversification versus specialization at the household level; and 3) the influence of rural income generating activities on poverty and inequality. Analysis of the RIGA cross country dataset paints a clear picture of multiple activities across rural space and diversification across rural households. This is true across countries in all four continents, though less so in the African countries included in the dataset. For most countries the largest share of income stems from off farm activities, and the largest share of households have diversified sources of income. Diversification, not specialization, is the norm, although most countries show significant levels of household specialization in non-agricultural activities as well. Nevertheless, agricultural based sources of income remain critically important for rural livelihoods in all countries, both in terms of the overall share of agriculture in rural incomes as well as the large share of households that still specialize in agricultural sources of income. 1 The views expressed in this paper are those of the authors and should not be attributed to the institutions with which they are affiliated. We would like to acknowledge Marika Krausova for her excellent work in helping build the RIGA database and Genny Bonomi and Karen Hudlet for research assistance. We would like to thank Karen Macours, Alain de Janvry, Elisabeth Sadoulet, Derek Byerlee and Gustavo Anriquez for constructive comments on the text and data, as well as other numerous researchers for helping us check the data. We would also like to thank participants at workshops at the FAO in Rome and Santiago, the IAAE meetings in Brisbane and the AES meetings in Reading, for comments and discussion.

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