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Mohammed Seraje Livelihood strategies and their implications for rural-urban linkages: The case of Wolenkomi town and the surrounding rural kebeles

Working papers on population and land use change in central Ethiopia, nr. 10

Acta Geographica-Trondheim

Serie A, Nr. 18 Series A, No. 18

Avhandlinger og rapporter/Theses and reports

October 2007

I n n o v a t i o n a n d C r e a t i v i t yI n n o v a t i o n a n d C r e a t i v i t y

Addis Ababa University

Addis Ababa University

Acta Geographica-Trondheim is the continuation of Papers from the Department of Geography, University of Trondheim, which came out 1978-2001.

http://www.ntnu.no/geografiISSN 1502-2390

www.ntnu.no/geografi

Livelihood strategies and their implications for rural-urban linkages:

The case of Wolenkomi town and the surrounding rural kebeles

Mohammed Seraje1

ABSTRACT: As the livelihood strategies of the rural and urban people in sub-Saharan Africa have become increasingly multidimensional and multi-local in the past two decades, rural-urban linkages are expanding and receiving increased attention in the regional and local economic development discourse. The paper examines the ways in which different households rely on varying combinations of activities, the factors affecting each strategy and their implications for rural-urban linkages. The findings indicate that though rural and urban households derive a larger proportion of their income from farming, and trade and service provision, respectively, they combine their livelihoods from different sources. It was also found that small farm size and unequal distribution of land in the villages along with the decline in production confine the flows of agricultural produce to towns. However, land shortage and landlessness strengthen rural-urban linkages in terms of both the flow of people and non-farm activities. Agricultural produce marketing showed strong linkages with the local, regional and national urban centres. The results imply that rural-urban linkages would be enhanced by improvements in the livelihood strategies of the people through supporting urban-based non-farm activities and informal activities in small towns, improving the labour absorptive capacity of business sectors in town, discouraging public monopolies in input marketing and distribution, supporting agricultural intensification, strengthening physical and market infrastructure, improving the financial sector, and supporting the development of agroprocessing industries.2

1 E-mail: mosir64@yahoo.com 2 Fieldwork and publication for this study were supported by the NUFU- funded collaboration programme: Population growth and land use change in Central Ethiopia

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1. INTRODUCTION According to the World Bank (2001), most of the people living in absolute poverty are found in sub-Saharan Africa, though development has been on the policy agenda of their governments. In the past, the paradigms of development to achieve economic development have changed over time. In the 1950s and 1960s, the governments of most developing countries were emphasizing industrial development in urban areas (Douglass 1998). This was in favour of urban activities at the cost of agriculture. In the 1970s, the development approach shifted to integrated rural development, which involved infrastructure and social services to achieve food self-sufficiency in addition to the increase in agricultural production (Douglass 1998). The expected economic development did not materialize simply because the rural poor had limited access to inputs and credits. Moreover, there was recognition that the neglect of the urban aspects of rural economy had undermined the development potential of rural areas. In the 1980s, it was recognized that the expected economic development from such development approaches had failed to realize their objectives mainly because they had resorted either to sectoral (agriculture or manufacturing) or spatial (rural or urban areas) approaches. As a result, a new approach to development called rural-urban linkages began to emerge in the early 1980s. This approach emphasizes the mutual development of both rural and urban areas by assuming that the two are interdependent localities characterized by the flow of resources as well as other linkages (Satterthwaite 2000). In Ethiopia, previous development efforts were geared towards either sectoral or spatial approaches. Sectoral approaches focused on agriculture, with little emphasis on secondary and tertiary activities. For example, the rural development policies of a country often neglect the role of non-farm activities (Shankland 2001). Regarding spatial approach, the focus of the government in the past was on rural areas. Moreover, rural and urban developments were treated separately, with planning controlled by different bureaus (Tassew 2002). However, the acute level of land shortage accompanied by rapid population growth forced rural people to become involved in non-farm activities in their village or in nearby towns, or to migrate (Mulat & Teferi 1996). This has had implications for both rural-urban linkages and livelihood strategies. Although some researchers have written about rural-urban linkages, livelihood strategies and their implications for rural-urban linkages have not been well studied in Ethiopia. Those who have made efforts in this direction have tended to focus on just one aspect of household activity in either a rural or urban area: for instance, the productivity of agriculture (Assefa 1995), the rural non-farm (Mulat & Teferi 1996; Toulmin et al. 2000) and migration (McDowell & de Haan 1997, and farm and non-farm linkages (Tegegne 1999; Tassew 2002). Nonetheless, the interactions between rural and urban areas as manifested by the livelihood strategies are not well studied. The present paper investigates how the livelihood strategies of the people are interrelated between rural and urban areas and how they influence rural-urban linkages. The aim of the present article is thus to identify the varying combinations of livelihood strategies of people and the nature of rural-urban linkages by taking each livelihood

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activity and their constraints into account. I also attempt to examine the factors limiting the observed linkages. Further, I suggest how policy formulations and implementation can best promote rural-urban linkages by improving the livelihood strategies of the poor. The study was conducted in Wolenkomi town as well as in the farming villages of Cheleleka Bobe and Gara Kora. The study area is situated in Wolenkomi locality, Dendi district, west Shoa zone, and Oromiya regional state (Map 1). Wolenkomi town is situated 76 km west of Addis Ababa on the all-weather road between Addis Ababa and Nekemt. The area’s economy is based on agriculture and particularly on crop production. Of all crops grown, the most important is teff, which covers approximately half of the cultivated land area, followed by wheat and barely. However, the area has practically no small-scale agroprocessing enterprises. The study area is strongly linked to the regional market at Nekemt town and the national market at Addis Ababa through the production of grains, pulses, oil seeds, livestock, and timber. Other potentially favourable factors for such links are the area’s location along a major road (Addis Ababa–Nekemt) and its proximity to the capital city. As a consequence, large numbers of traders are attracted to Wolenkomi town. Map 1: Location of Wolenkomi area.

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The data used in this study are both qualitative and quantitative, and were collected in January and February 2005. The qualitative information included wealth ranking and age grouping as well as information from focus group discussions. These were complemented by semi-structured interviews with key informants and twelve-grain traders from Wolenkomi town. The quantitative data were derived from a household survey using structured questionnaires. This also included statistical reports of the central statistical authority, the rural development bureau of Dendi wereda, and municipality of Wolenkomi town and peasant associations in villages. The field data were analyzed using summary statistics, including frequency and cross-tabulation. In addition, qualitative analysis was performed to add further insight into livelihood strategies and their implications for the nature of rural-urban linkages. This paper is organized in four parts. The second part reviews the theoretical framework and some of the case study based literature on various forms of livelihood strategies and rural-urban linkages of developing countries. The third part describes the livelihood strategies of rural and urban inhabitants, their implications for the nature of rural-urban linkages and their impeding factors. Conclusions and recommendations are presented in the final part. 2. REVIEW OF LITERATURE AND CONCEPTUAL FRAMEWORK 2.1. Review of related literature 2.1.1. Livelihood diversification, social capital and rural-urban linkages In the past, the paradigms of development have changed over time from industrial development in urban areas to integrated rural development. Satterthwaite (2000) argues that such approaches led to the formulation of policies that have operated as though urban and rural economies and societies are not connected and also as though agriculture only affects rural populations and non-agriculture activities only take place in urban areas. It is now agreed that the best approach is to address rural and urban populations at the same time. Livelihood strategies are ranges of activities that people carry out in order to make a living. They are sustainable when the result of the processing of assets protects people against shocks and stresses (Haan & Ufford 2002). They have an effect on important assets and people’s livelihoods. Studies of livelihood strategies and their implications for rural-urban linkages, however, are lacking. A few studies, such as the one by Haan & Ufford (2002), have revealed that rural-urban interactions are shaped to a great extent by people’s livelihood strategies. Further, Diyamett et al. (2001) reported that 86% of respondents in Marawe Kyura and 97.6% in Lotima rely on a combination of farming and non-farm activities. In both areas, farming is the primary occupation of the poor while those who are better off show a significant interest in non-farm activities (Diyamett et al. 2001). Young generations also show higher levels of engaging in multiple activities than older ones (Lerise et al. 2001). Trade and services are the main source of income in small towns (Satterthwaite & Tacoli, 2003) but 60% of these jobs are in the informal sector (Deshingkar 2004). In this way,

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small towns act as markets and service centres for the surrounding rural populations that in turn link hinterlands with wider networks of towns. In the present paper, the term ‘non-farm activity’ applies to a wide variety of activities outside the agricultural sector. However, it also includes wage agricultural labour on other farms. The level of income diversification activities in rural sub-Saharan Africa is increasing at a greater rate than in Asia (Hussein & Nelson 1997). The income proportion gained from non-farm activities in Africa varies between 60% and 80% (Bryceson 2002 in Tacoli 2003). The motivations and determinants of non-farm activities, however, are many and subject to intense debate. Theoretical literature in the past has stressed either agricultural growth (Evans 1990) or falling incomes from agricultural sector (Bryceson 1996) as the cause behind the growth of rural non-farm employment. However, this does not fit well with case studies in Tanzania and Nigeria as it is constrained by limited access to credit and land (Diyamett et al. 2001). Some recent studies have documented new opportunities as the reasons behind the increase in non-farm employment, such as trade liberalization in Tanzania (Diyamett et al. 2001), urban growth and the related demand for service workers in Mali (GRAD 2001), and the development of manufacturing industries in the peri-urban areas of south-east Nigeria (Okali et al. 2001). The urban residents also diversify their livelihoods into urban agriculture. In Lindi town, southern Tanzania, farming is the first occupation for more than half of the urban residents (Lerise et al. 2001), but it accounts for only 13.5% in the more vibrant market town of Himo (Diyamett et al. 2001). This variation is the outcome of poor transport in Lindi, hence its farmers sell their produce in the village to traders outside this area. As a consequence, the Lindi residents are forced to engage in farming. Moreover, wealthier households depend on rural agriculture by accessing land through land renting (Satterthwaite 2000). In the past, migration studies focused on economic problems in the area of origin and economic opportunities in destination areas (Tacoli 1998). These, however, do not take into consideration the essential role of specific socio-cultural factors and social expectations in determining out-migration along gender and generations lines (Okali et al. 2001). Remittances from migrants are highly needed to supplement income (Lerise et al. 2001), and according to Okali et al., young people who do not migrate are regarded as ‘lazy’. Migration is thus regarded as a socially acceptable way of earning a livelihood. Haan & Ufford (2002) distinguish four kinds of markets: informal markets at the farm gate, village markets, small town wholesale markets, and large urban markets. They also identify a number of actors, such as producers, consumers and retailers in small towns, assemblers and local wholesalers with warehouses, brokers, and retailers at the end of the line who sell to consumers. Based on different perspectives, several writers defined social capital differently. Of particular importance to the study of livelihood strategies and rural-urban linkages is

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Haan & Ufford’s (2002) definition, that it is ‘the institutions, relationships, attitudes, and values that govern interactions between people and contribute to economic and social development’. Networks are also ‘a set of social relations, or ties between actors’. Rural-urban linkages are not limited to urban-hinterland relationships but extend to wider networks of villages and towns (Douglass 1998). Lerise et al. (2001) confirm that traders provide credit for small-scale farmers who establish close relationships and accept delayed payment for their tomatoes. In addition, local traders and migrant relatives with access to urban centres provide information on markets and job opportunities (Diyamett et al. 2001). Hence, social relations replace the inadequate formal information systems and credit. Such wider social relations and mutual trust increase the potential for working together and for rural-urban linkages. Nonetheless, this affects the poor negatively. The majority of farmers in northern Tanzania who lack networks of social relations grow tomatoes during the rainy season. This results in over supplying, and hence declining prices. Social capital is, therefore, considered as an improvement in our understanding of livelihood strategies and rural-urban linkages. The aforementioned relates to the international literature involving different arguments. Studies of livelihood strategies and their implications for rural-urban linkages specific to Ethiopia are rare. A few studies have focussed only on livelihood strategies, while others deal with rural-urban linkages, though none have approached livelihood strategies and rural-urban linkages simultaneously. Grace Carswell (1997) strongly states that the major focus of state policy in Ethiopia is the promotion of agricultural intensification that necessitates the substantial use of artificial inputs. Nonetheless, the latter is in short supply for the poorest groups. The farming sector is also constrained by land shortages, low crop yields and lack of draught animals (Tegegne 1999). Particularly, young men and women face land shortages and have to access land though sharecropping (Carswell 1997). The level of diversification of income is high because approximately two-thirds of households have one member who undertakes a secondary activity (Toulmin et al. 2000). Toulmin et al. argued that the state farm in Chokare, dense population in Adamecho and the construction of a new road close to Mundane provided opportunities for non-farm activities. This reflects the relationship between non-farm activities and population density and opportunities available locally. Tegegne (1999) found that villages near urban centres have higher numbers of household members engaging in non-farm activities. The main non-farm activity is trade in Wolayita (Toulmin et al. 2000), mainly due to the liberalization of trade since 1991. Also, Toulmin et al. reported that the largest share of income for both rich and poor groups in Adamecho came from non-farm activities, and these were more important for poorer groups than richer groups in Mundane. Similarly, it was younger men who were encouraged to engage in non-farm activities rather than rich older households (Tegegne 1999). De Haan et al. (2000) explained that only one-quarter of households had a migrant member, and the contribution of migration to livelihood was more limited in Ethiopia

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than in Mali. They concluded that education and daily work were the two most important activities of migrants at their place of destination. They also revealed that migrants were mainly young men who did not have a plot of land and animals, and women who migrated mainly to urban centres. This indicates that poor households with few assets tend to migrate as a last resort. Studies on urban livelihoods, however, are quite few in Ethiopia. Tegegne (1999), for example, found that the main source of urban livelihoods is trade. In addition, towns where trade is conducted also serve as collection, distribution and service centres. Thus, they link rural populations with wider networks of markets. Contrary to expectations, they are not centres of inputs and agroprocessing activities because service cooperatives in rural areas offer this input. Specific empirical studies on rural-urban linkages in Ethiopia are also rare. One exception is that conducted by Tegegne (1999), who noted that agricultural produce flows from rural to urban areas but that this is confined to linseed, Niger seed and teff in Robe wereda, and only coffee in Limu Kossa wereda. For this reason, Robe town is a focal point for grain collectors and the onward supply of the aforementioned crops to Nazeret town and Addis Ababa, while Limu Genet is a centre for coffee collection and supply to Addis Ababa, where it is then shipped abroad. In addition, farmers buy industrial goods from small towns. This shows that the flows are not limited to small town hinterland relationships. This study, however, did not find the actors in the chain and social capital to be facilitators of commercial exchange. The flow of credit from formal urban financial institutions is non-existent. Tegegne’s study, however, does not deal with the informal ones. He also shows there is rural-urban migration, but not the reverse movement. Finally, he stresses that farmers do not receive information on market prices and employment opportunities from small towns. Nonetheless, his study does not emphasize informal sources of information. The livelihood strategies and rural-urban linkages are not well studied in Ethiopia. The aforementioned few studies are incomplete. Hence, the aim of the present study is to shed further light by elaborating the rural-urban flows as the manifestation of livelihood strategies of both rural and urban areas. 3. RURAL AND URBAN LIVELIHOOD STRATEGIES AND RURAL_URBAN LINKAGES Drawing on the findings of Tacoli (2002), a conceptual framework was developed (Figure 1) with the aim of identifying the livelihood strategies and their implications for rural-urban linkages. The implications of livelihood strategies for rural-urban linkages are manifested through the relationships and interactions between various components at national, village, household, and individual levels. Figure 1 shows the factors that influence access to assets at individual or household level rely on one or a combination of activities and also strengthen linkages. These include

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national policies at national and village levels, population pressure, inter-household differences at village level, and intra-household differences at household level. National policies, and particularly land tenure systems, determine farming and access to farming systems. For south-east Nigeria, Okali et al. (2001) identified that at the local level either statutory or customary tenures or both exist and vary depending on wealth status, age and gender. Inheritance rights favour young sons and are against women (Diyamett et al. 2001; Lerise et al. 2001). This has forced the young to migrate out and strengthen linkages. Structural adjustment programmes in Africa have also weakened small farmers’ production because the prices of agricultural inputs, farm implements and consumer goods have increased more than the prices of agricultural outputs (Carswell 1997). This has negative implications for linkages in terms of agricultural produce flow. The introduction of user fees for services and the entrenchment of public sector workers have largely affected the poorest groups in urban areas (Satterthwaite & Tacoli 2003), by leading to declining incomes. As a consequence, the poorest groups have diversified their livelihoods into non-farm activities and urban agriculture, including migration. However, trade liberalization allows people to involve in several activities and grain traders to involve in grain collecting and distribution. This has positive implications for rural-urban linkages. High population pressure is also an important reason for land shortages in south-east Nigeria (Okali et al. 2001), thereby forcing the young to migrate and involve in non-farm activities and, as a consequence, strengthen linkages. Figure 1: Framework to analyze livelihood strategies and their implications for rural-urban linkages. Affect Influence

National policies Land tenure systems Agricultural and Industrial policies Village-level characteristics Population density Shocks and stresses Inter-household differences between Better off and poor Intra-household differences between Genders Generational groups

Access to assets Natural capital Physical capital Financial capital Human capital Social networks

Cause variations in

Rural-urban linkages/flows Goods People Finance Information Services

Livelihood strategies

Source: Drawn and adapted from Tacoli (2002).

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Those who are better off and poor, and/or young and elderly at village level, both male and female, have unequal access to essential assets such as land, credit, information, transportation, etc., that may be used to enable them to become involved in farming, non-farm activities or out-migration. These in turn determine the nature of linkages. The nature of income diversification into non-farm activities in rural areas and agriculture in urban areas and out-migration vary depending on wealth status, age and sex. For instance, poorer households and women are generally involved in less remunerative and temporary employment than those who are better off and men (Baker 1995; Seppala 1996). Moreover, younger generations diversify more than older ones (Diyamett et al. 2001). Concerning migration, the young and male account for the majority of the migrants (De Haan et al. 2000). Nonetheless, independent movement involving unmarried young women has greatly increased in recent years, and one-third of households in southern Tanzania have at least one young female migrant member (Diyamett et al. 2001). Even though return migration is increasing due to economic hardship (Smit 1998), this is insignificant in southern Tanzania because access to land and non-farm employment opportunities are limited, in addition to poor roads (Lerise et al. 2001). This weakens rural-urban linkages. Farming, non-farm activities and migration require financial capital; hence households with sufficient capital are expected to involve in more than one productive activity. Smaller farmers identify limited access to as major constraints credit (Okali et al. 2001). This reduces farmers’ productivity levels, thereby weakening linkages. Farmers’ access to markets in physical terms is also a critical element in marketing their produce (Satterthwaite & Tacoli 2003). Rural residents identify high transport costs due to poor roads as the main problem (Lerise et al. 2001). Due to inadequate transport, revenues from trade are low in southern Tanzania. In contrast, good transport networks stimulate trade in northern Tanzania (Diyamett et al. 2001). This suggests that the cost and nature of transport networks determine both the revenue from trade and linkages. Information on market prices and job opportunities are expected to stimulate the returns from livelihood strategies and to strengthen rural-urban linkages. Diyamett et al. (2001) found that a few farmers with access to urban market information around Himo town benefited more than others by producing tomatoes during the rainy season when demand exceeds supply. This augmented not only their own returns from agricultural produce but also industrial goods marketing in general and hence rural-urban linkages 3.1. Rural livelihood and rural-urban linkages The majority of the rural people depend on a single productive activity, mainly farming. Unlike most developing countries, only 35% of rural respondents in Ethiopia rely on a combination of farming and other income earning activities. Access to land and capital are important in determining which groups are more likely to engage in farming, non-farm activities, migration, or multiple activities. The rich and elderly with access to land

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involve only in crop production, while the rich and the young landless and young landowners derive their incomes from more than one activity, which producing high returns. Likewise, the poor with land engage in both farming and low-return non-farm activities. However, landless poor men and women engage only in less remunerative non-farm activities. 3.1.1. Farming in rural settlements and rural-urban linkages Farming is the main productive activity for c.60% of the people in the study villages (Table 1). When crop production as secondary occupation is taken into account, the figure rises to 82.5%. Crop production is the only activity for about half of the rural residents, which reflects the better opportunities farming offers compared to other activities. Even though it supports a large number of rural households, there are a number of constraints. Table 1. Main activities in rural settlements (%). Activity type Two main activities Variation within the first activity based on: 1st 2nd Gender Age Wealth Per cent Per cent M F Y Old Poor Rich Farmer 60(48) 17.5(18) (28) (20) (18) (30) (17) (31) Agricultural labourer 12.5(10) 8.75 (7) (7) (3) (8) (2) (10) --- Trader in village 9.75 (4) --- (2) (2) (3) (1) (1) (3) Trader in town 3.75 (3) 1.25 (1) (2) (1) (2) (1) --- (3) Household utensils making 1.25(1) --- (1) --- --- (1) (1) --- Tella & katikala production & selling

12.5(10) 5(2)

--- (10) (8) (2) (7) (3)

Firewood & cattle residuals selling

5 (4) --- --- (4) (1) (3) (4) ---

Total 100(80) 35(28) (40) (40) (40) (40) (40) (40) Source: Own survey. Figures in brackets show reporting farmers.

Land shortage and absence of land are the main constraining factors that face farmers (Table 2 and 3). In turn, these factors result in reduced harvests, thereby limiting the opportunity for surplus production, and hence rural-urban linkages. However, they contribute positively to rural to urban flows, of landless villagers in particular. The average size of land owned is 1.71 hectares (ha) (Table 3), which is slightly more than two times the national average of 0.85 ha (CSA 2004). However, this average drops to 1.1 ha when the landless are taken into account. With regard to size distribution, 40.1% of landowners cultivate land below 1 ha. This reveals that those with land shortages are the poor farmers with smaller land size (Table 2). This seems to have a negative effect on the amount of grains marketed, thereby weakening agricultural produce flow. However, the majority of landowners cultivate more than 1 ha of land. In addition 25% of the sampled population owned more than 3 ha, which indicates unequal distribution of land. As already noted, unequal distribution of land is one of the factors that limits rural-urban linkages. Unlike poor farmers, some villagers produce surplus and sell the bulk of

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their production, thereby strengthening rural-urban linkages. The number of landless is also greater than the number of landowners and their numbers will continue to rise. The landless are young mainly women. The landless people in villages claim the need for land redistribution, highlighting the potential for conflict among landless and landowners in the community. In addition, landlessness strengthens linkages by forcing people to migrate and involve in non-farm activities. Table 2. Lack of assets and other agricultural problems in villages (%).

Two main problems Variation the 1st activity based on:

1st 2nd Gender Generation Wealth Lack of assets and other problems

Per cent Per cent M F Young Old Poor Rich No problem 3(2) 3(2) (2) --- (1) (1) --- (2) Land shortage 40.9(27) 18.2(12) (15) (12) (15) (12) (17) (10) High cost of agricultural inputs

25.8(17) 27.3(18) (9) (8) (10) (7) (9) (8)

Lack of capital and credit 13.6(9) 10.6(7) (3) (5) (4) (5) (6) (3) Lack of plough oxen 4.5(3) 7.6(5) (2) (1) (1) (2) (3) --- Manpower shortage 7.6(5) 12.1(8) (1) (4) --- (5) --- (5) Lack of transport 1.5(1) 4.5(3) (1) --- --- (1) --- (1) Weeds 1.5(1) 15.1(10) --- (1) --- (1) --- (1) Lack of market 1.5(1) 1.5(1) --- (1) --- (1) --- (1) Total 100(66) 100 (66) (34) (32) (31) (35) (35) (31) Source: Own survey. Figures in brackets show reporting farmers.

Almost 44% of elderly respondents reported access to land through allocation by village leaders under the 1975 land proclamation. Household members, especially young sons, access land through gifts and inheritance (Table 3). As a result, more sons participate in household farm labour than daughters. Hence, opportunities for daughters lie in non-farm activities, followed by permanent migration, while poor sons involve in casual labour. Young men from rich families access land through renting, despite the fact that the value of land is increasing. In contrast, those who rent out are usually the poor. This forces the vulnerable groups to diversify their livelihoods or migrate, thereby encouraging rural-urban linkages.

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Table 3. Access to land by wealth groups, gender and age (%). ____________________________________________________________________________________ Land Per cent Landholders ___________________________________ __(%)_____ M F Y O P R Landowners in hectares . Landless 35(28) . 0-1 31.3(25) 40.1 . 1.1-2 6.3(5) 9.6 . 2.1-3 11.3(9) 17.3 . 3.1-4 8.8(7) 13.5 . 4.1-5 7.5(6) 11.5 . Total 100(80) 100 Land size . Minimum 0.4 . Maximum 5.0 . Average for landowners 1.71 . Average for all respondents 1.1 Land size in the last 10 years . Decreasing 90.4(47) . Increasing 1.9(1) . Unchanging 7.7(4) . Total 100(52) Mode of access of land . Inheritance 34.8(23) (9) (14) (18) (5) (6) (17) . Allocation by rural leaders 43.9(29) (17) (12) --- (29) (15) (14) . Renting 13.6(9) (7) (2) (7) (2) --- (9) . Sharecropping 1.5(1) (1) --- --- (1) --- (1) . Gift 6.1(4) (4) --- (4) --- (1) (3) . Total 100(66) __________________________________________________________________________________ Notes: M = male, F = female, O = old, Y = young, P = poor and R = rich. Source: Own survey. Figures in brackets show reporting farmers. The majority of respondents mentioned that land size had decreased during the previous ten years (Table 3). Excessive distribution of family land through gifts and inheritance and demographic pressure are the major reasons for decreasing land size and harvests. The respondents also believed that production levels had been declining over the previous ten years due to shortages of rainfall, land, credit, and plough oxen. The decline in farm size and production are some of the reasons why rural people diversify their activities in villages or nearby towns, or migrate (Table 10). These factors also limit rural-urban linkages in terms of the flow of grain supplies. Even if the aforementioned land-related problems encourage rural-urban linkages in terms of the flow of people, they weaken them in terms of the flow of agricultural produce from rural to urban areas and the potential of farmers to purchase industrial goods from urban areas. Thus, land shortages can have both positive and negative effects on rural-urban linkages

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Agricultural produce marketing and rural-urban linkages Marketing is an important livelihood strategy of the rural people. It allows farmers to sell their agricultural produce and to purchase goods for consumption and production. The most essential goods moving out of the villages of Cheleleka Bobe and Gare Kora to Wolenkomi town and then on to wider networks of towns are agricultural crops such as teff and wheat, followed by other agricultural produce such as cattle and eucalyptus trees. The most important crops produced and sold are teff, wheat, barely, and millet (Table 4). Of all crops, teff accounts for the highest amount of marketed grains in the study areas, even though more than half of the produce is destined for consumption. However, the proportion of teff marketed is greater than the national average, which was c.17% of the total production (Wolday & Eleni 2003, cited in Tegegne 2005). This proves that the study area has relatively strong linkages with urban centres. Teff producers usually sell their produce to grain traders at Wolenkomi market. The grain traders then sell most of the teff in Addis Ababa, followed by Nekemt. Teff trade plays a crucial role in strongly linking the hinterland with the networks of markets.

Table 4. Crop output, sales and place of sales (%). Selling to (place of sale) Crop type Producti

on (quintals)

Amount sold (%) Cooperative

union Local traders

Town traders in Wolenkomi

Town consumer

Teff 420(59) 43.3(54) 18.5(10) 1.9(1) 72.1(39) 7.4(4) Lentil 31(10) 80.6(9) ---- ---- 88.8(8) 11.2(1) Vetch 160(36) 50.2(35) ---- ---- 85.7(30) 14.3(5) Chickpea 40(9) 60.0(7) 14.2(1) 14.2(1) 57.1(4) 14.2(1) Tikur Azmud 60(12) 93.3(12) ---- ---- 100(12) ---- Niger seed 42(13) 95.2(13) --- ---- 100(13) ---- Line seed 39(12) 97.4(11) ---- ---- 90.9(10) 9.1(1) Sunflower 44(15) 90.9(12) ---- ---- 100(12) ---- Sesame 31(9) 93.5(8) ---- ---- 100(8) ---- Nich Azmud 19(11) 89.4(11) ---- ---- 100(11) ---- Barley 240(29) 29.5(21) --- 9.5(2) 85.7(18) 4.8(1) Wheat 380(51) 29.5(35) 34.3(12) 11.4(4) 45.7(16) 8.6(3) Millet 200(32) 41.5(21) ---- 23.8(6) 23.8(6) 42.9(9)

Source: Own survey. Figures in brackets show reporting farmers There are four types of teff markets in the chain: the farm gate; homesteads in the villages; urban formal markets in Wolenkomi town (which includes open markets on market days and warehouses of large and medium traders); and central or terminal markets in the regional town of Nekemet or the capital city. These markets involve different actors with different amounts of capital. Due to their significance, the teff markets attract a variety of actors besides producers and consumers in village and urban markets. The main actors include traders, ranging from wholesalers in Wolenkomi town to retail traders in Wolenkomi and the final markets, transporters and commission agents, and retailers in the terminal markets. Social capital has several implications for the livelihoods of actors in the marketing chain

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and also for rural-urban linkages. All grain traders sell teff on a credit basis because they trust their customers to a great extent. Small retail traders in Wolenkomi town either borrow money to purchase grains or they obtain maize on credit from large traders. Traders also transport goods from Wolenkomi to other towns on credit. In addition, they obtain information about the price of teff from commission agents and transporters. Similarly, not all traders always go to sell at markets because they trust brokers to a great extent. Hence, commission agents collect produce either from transporters or wholesalers to sell on behalf of wholesalers and then distribute it to retailers on credit. Social capital facilitates commercial exchanges by reducing the costs of working together and making cooperation and the continuity of business possible. These social networks, relations, or ties based on trust between actors also show the significance of social capital for livelihoods and also linkages because they serve the role of processing credit, providing information, etc. to actors in the marketing chain. Livestock marketing shows strong rural-urban linkages with the emerging Wolenkomi market. In the past, the nearest market for buying and selling livestock was Ginchi market ( about 15 km away) but now this takes place in Wolenkomi town. Because of the advice provided by development agents and the provision of credit from the Oromiya Credit and Saving Institution, many people are involved in fattening cattle for sale. This enhances rural-urban linkages more strongly. It also has the tendency to strengthen integration between villages and the central market, thereby creating livelihoods for various actors. The actors in marketing include farmers, small traders in Wolenkomi and brokers, and wholesalers and butchers in Wolenkomi and Addis Ababa. The markets are at farm gates in the villages, collection and distribution centres in Wolenkomi, Ginchi and Jeldu, and the central market in Addis Ababa. Timber marketing shows some linkages with local and central markets. It has gained importance in meeting the demand created by the increasing numbers of houses under construction in the towns of Holeta and Addis Ababa. It usually takes place at homesteads. Even if it is not accessible to the poor, timber production and its trade open opportunities for the livelihoods of several actors in the chain, such as consumers, transporters and brokers, in addition to farmers and wholesalers. Urban households in Wolenkomi town are very much linked to the hinterland in terms of agricultural produce consumption. Nonetheless, they are unable to consume the entire surplus produced. For this reason, very large quantities of teff, cattle and timber are transported to Addis Ababa, Holeta, Addis Alem, and Nekemt. Although Wolenkomi lacks the concentration of final consumers, it provides a more enabling environment through a vibrant market, traders, favourable transport networks, and information on markets that link the surplus produce with final consumers, both within and outside the region.

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Table 5. Marketing problems farmers and town dwellers face (%). Problems Farmers Town dwellers Grain traders

Per cent Per cent Per cent No problem 24.2(16) ---- ---- Poor road transport 21.2(14) 12.5(5) 16.7(2) Lack of information on market prices 34.8(23) 5.0(2) ---- High cost of transportation 13.6(4) 7.5(3) 33.3(4) Price fluctuations 16.7(11) 7.5(3) ---- Low price of agricultural produce 10.6(7) ---- ---- Lack of transport 3.1(1) 17.5(7) 33.3(4) Low demand ---- 17.5(7) ---- Lack of transport ---- 32.5(13) 16.7(2)

Source: Quantitative survey. Figures in brackets show reporting farmers and town dwellers. Agricultural marketing has a number of constraints that have implications for rural-urban linkages. Interestingly, more than one-third of households stated lack of information on market prices as the main problem in marketing (Table 5). The two major sources of information on prices of goods are both informal, namely traders in towns, and migrant relatives and friends (Table 6). In the absence of formal ways, social networks fill the information gap and play a crucial role in linking rural producers with urban-based market information. In this way, traders in Wolenkomi town play a positive role in channelling information to producers. Poor road transport and, to a lesser extent, price fluctuations are other problems relating to linkages (Table 7). Table 6. Sources of information on prices of goods (%). _____________________________________________________________________________________ Rural Urban traders Grain traders producers & service providers 1st 2nd ____________________________________________________________________________________ Information sources for the prices of goods Unknown 78.9 (52) (11) (3) (3) Traders in Wolenkomi 15.1 (10) (13) (1) (3) Migrant relatives and friends 3.03 (2) (4) --- --- Radio and television 1.5 (1) (1) --- --- Relatives and friends in villages 1.5 (1) (1) --- --- Telephone from brokers in Addis Ababa --- ---- (7) (1) Telephone from traders in Addis Ababa & Nekemt --- (10) --- --- _____________________________________________________________________________________ Source: Quantitative survey. Figures in the brackets show reporting farmers, urban dwellers and grain traders. Agricultural intensification and rural-urban linkages Marketing allows farmers to purchase goods for consumption and production goods required for agricultural intensification. In order to improve their returns from agriculture, farmers utilize agricultural inputs and extension services. The place where they source these inputs and the amounts utilized determine the surplus marketed and hence the nature of rural-urban linkages. Farmers reported the high price of fertilizers and improved seeds as the second problem of farming (Table 2). The price of inputs has increased since the implementation of the structural adjustment programmes that removed subsides.

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The major input used by farmers is fertilizer, followed by improved seeds. The only source of inputs is the service cooperative in Cheleleka Bobe PA. The parastatal agency of the government determines the price of inputs. This may reduce competition among urban traders, thereby increasing the price of inputs. As a consequence, the flow of inputs between villages and Wolenkomi town is non-existent except for some herbicides. In addition, the service cooperative requires fees to be paid in full in cases when the poor have nothing to sell. This has compelled some low-income farmers to borrow money from moneylenders (at 100% interest rate), relatives, and friends and grain traders in town (Table 7). Others utilize lower amounts of inputs per hectare, which results in harvest decline and the amount to be marketed. This weakens the flows of agricultural produce and possibly encourages non-farm activities and out-migration of people. The total number of farmers requiring advice on crop production is small and they access the necessary information from villages. The majority of livestock owners receive veterinary services from private veterinary clinics in Wolenkomi town. The livestock owners complained that the private service is expensive and difficult to obtain for poor rural inhabitants. This limits rural people’s access to the service and hence their level of productivity. The nature of rural-urban linkages depends on the size of credit, the place where credit is obtained from and the strength of social capital to undertake agriculture, non-farm activities and migration. Poor access to finance is viewed as an important constraint by a considerable number of farmers attempting to improve the returns from their livelihood strategies (Table 2). Approximately half of villagers receive loans (Table 7). The major sources of loan are informal financial institutions, involving moneylenders in villages, relatives and friends in villages and traders in towns. Bank loans are non-existent. The majority of villagers source credit from their own villages, thereby limiting the financial linkages. Informal credit is arranged among the producers themselves and between producers and urban traders. Large grain traders in town are sources of credit for farmers, depending on their wealth status. The former usually lend to rich producers with no interest rate, written agreement or collateral, which is why all grain traders trust these farmers to a great extent. Such good relations can guarantee the sale of large quantities of grains and maintain the continuity of production and business. Nonetheless, such arrangements are not accessible to the poor. As a result, poor producers are more likely to depend on rural rich moneylenders. A very few poor farmers also rely on limited amounts of credit from relatives, friends and neighbours in their village, who lend on the basis of strong social ties and do not charge any interest. Rural rich women are sometimes allowed to take credit in kind (goods), which is then repaid in cash to the traders on the next market day. This was conformed by 70% of urban dwellers that reported selling of goods on credit to rural households. More recently, a nationwide initiative has introduced micro credit for farming and non-farm activities, with loans from the Oromiya Credit and Saving Institution based in

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Ginchi town, named Kuneso in Afan Oromo. Table 7 shows that 18.9% of farmers borrowed money from this source but the absence of group collateral and PA’s evaluation limit access for the poor. In addition, the high interest rate (12.5%) and repayment of debts, particularly during poor harvesting seasons, are other problems of the credit institution. This situation reduces farmers’ potential for raising incomes from agriculture and non-farm activities, thus confining the flow of goods and finance between rural and urban areas. Table 7. Percentage distribution of the sources of loans. ________________________________________________________________________ ___________________________________________Rural______Urban_____________ Access to credit Yes 46.3 (37) 50 (20) No 53.3 (43) 50 (20) Total 100 (80) 100 (40) Sources of loan Bank --- 5 (2) Relatives and friends in village 27.02 (9) 7.5 (3) Relatives and friends in town 5.6 (2) 17.5 (7) Traders in town 21.6 (8) 5 (2) Urban saving and credit union 18.9 (7) 15 (6) Moneylenders 28.3 (10) 2.5 (1) Total 100 (37) 100 (20) __________________________________________________________________________ Source: Quantitative survey. Figures in brackets show reporting farmers and urban dwellers. With regard to saving, the size of capital saved and place of saving also have implications for linkages. None of the farmers mentioned using a bank as a place for saving money, while only three business owners mentioned it. Both villagers and urban dwellers reported local informal rotating saving schemes (iqqub), followed by keeping their savings at home in a box. Almost 37% of villagers and 18% of urban dwellers did not deposit money at all. This may be due to their low incomes and indicates weak linkages. 3.1.2. Occupational diversification in rural areas and rural-urban linkages Although farming is the main activity of most residents of the two study villages, half of the villagers also had incomes from non-farm activities. Approximately two-third of those engaged in non-farm activities stated that these are supplementary activities, while one-third derived their income only from income diversification activities (Table 8), which varied according to income levels, age and gender. Access to land is an important factor in determining which groups are more likely to engage in non-farm activities. As older men tend to control cultivable land, it is mainly young men and women as well as the poor who undertake non-agricultural employment. The predominant types of non-farm activities are daily agricultural labour and the production and selling of katikala and tella (traditional drinks) (Table 1). Non-farm job opportunities for young men in the village are related mainly to crop production. Poor women largely depend on selling traditional drinks and firewood. Cattle and grain trading are important occupations for the rich, mainly for young men, because such activities

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require large capital. Commuting from villages to Wolenkomi town is the norm for low-income elderly women. They commute to sell firewood, grass and straw in town. This suggests that there are limited opportunities in both the public and private sector in the nearby town. In addition, goods are transported by a large number of commuters and also those using horse-driven carts. Given the trade liberalization and the close proximity of rural settlements to Wolenkomi town, non-farm activities are not well developed. Table 8. Reasons for undertaking non-farm activities in rural and urban and rural agriculture in town (%). _________________________________________________________________________ Rural non-farm activities Rural and urban agriculture (%) ____________________________________________________________________________ Involved in non-farm activities Yes 52.5 (42) 25 (10) No 47.5 (38) 75 (30) Total 100 (80) 100 (40) Reasons for undertaking Supplement income farming 66.7 (28) 20 (2) Major means of livelihood 33.3 (14) 80 (8) Total 100 (42) 100 (10) Specific reasons Decrease in agricultural productivity 19.05 (8) Land shortage 47.6 (20) Landlessness 33.3(14) __________________________________________________________________ Source: Own survey. Figures in brackets show reporting farmers. The villagers cited lack of finance or credit, followed by lack of markets as the main factors that discouraged them from undertaking non-farm activities. This situation is worsened by the low purchasing power of the local people. For this reason, the overwhelming majority were involved in agricultural daily labour (which requires physical strength), and selling traditional drinks (which requires small amounts of money to be invested). 3.1.3. Migration and rural-urban linkages Migration has long been an essential element of livelihood strategies in the study settlements. Approximately 46% of rural households and 40% of urban households have at least one migrant member. Thus, the area has high levels of out-migration (Table 9). This affects both wealthy and low-income households, men and women. Young age groups, however, dominate the numbers of out-migrants.

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Table 9. Out-migrants status of households by wealth and gender ( in percent) Total Age Gender Wealth Place of

residence Households

Percent Y O M F P R With migrant member 46.3(37) (30) (7) (18) (19) (19) (18) With no migrant member

53.7(43) (18) (25) (22) (21) (21) (22) Rural

Total 100(80) (48) (32) (40) (40) (40) (40) Not migrant 45.0(18) 5 13 14 4 7 11 Permanent migrant 47.5(19) 12 7 4 15 10 9 Returnee migrant 7.5(3) 3 --- 2 1 3 ---

Urban

Total 100(40) 20 20 20 20 20 20 Notes: M=male, F=female, O=old, Y=young, p=poor and r=rich. Source: Quantitative survey. Figures in the brackets are reporting farmers and urban dwellers The reasons for rural people’s migration are mainly related to land shortage, and because young women are especially excluded from access to land. This is followed by limited local non-farm employment opportunities and high population pressure. For urban residents, the main reasons given were lack of waged employment and capital shortages in town, followed by lack of markets and incitation by the family. The major destination for both rural and urban migrants is urban centres – specifically Addis Ababa, where the women go to work as housemaids – or in public wage employment and as daily labourers in the construction industry, which may vary according to educational status and gender. Young men with low educational status are employed in daily labour, while women work as housemaids. In contrast, those who are educated are more likely to be engaged in the formal public sector. Young men also tend to migrate to other villages to engage in agricultural daily labour (Table 10). Table 10. Destination of out-migrants, their jobs and factors affecting out-migration (%). __________________________________________________________ ___________________________________________Rural_____Urban____ Destination of migrants Wolenkomi 4.3 (2) --- Ginchi 8.5 (4) 9.1 (2) Rural villages 25.5 (12) --- Ambo 8.5 (4) 9.1 (2) Addis Ababa 42.6 (20) 40.9 (9) Europe & USA 10.6 (5) 22.7 (5) Middle East ---- 18.2 (4) Total 100 (47) 100 (22) Migrants’ jobs at destinations Unknown 23.4 (11) 13.6 (3) Maid servant 19.1 (9) 9.1 (2) Watchman 8.1 (4) --- Education 17.02 (8) 27.3 (6) Garage 2.1 (1) ---- Wage employment 14.9 (7) 31.8 (7) Day labourer 6.4 (3) 9.1 (2) Other informal 8.5 (4) 9.1 (2) Total 100 (47) 100 (22) Factors affecting migration

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No problem 1.25 (1) 10 (4) Lack of transportation 2.5 (2) 2.5 (1) High cost of transportation 14.75 (11) 20.0 (8) Lack of information on job opportunities 33.75 (27) 25.0 (10) Social exclusion and barriers 6.25 (5) ---- Lack of education 5.0 (4) 7.5(3) Lack of finance for transportation 5.0 (4) 12.5(5) Lack of transportation and information 7.5 (6) 7.5(3) ___________________________________________________________________________ Source: Own survey. Figures in brackets show reporting farmers and urban dwellers. Surprisingly, Wolenkomi town, probably because of the few opportunities the town offers, is almost absent from the list of urban destinations, with the exception of being mentioned by two respondents (4.3%),. Rather, international destinations such as the Middle East, Europe and USA are more important than local and regional towns, especially for urban out-migrants. Similarly, Wolenkomi is hardly mentioned as a rural destination. This shows that urban to urban migration predominates the patterns of migration in urban centres. Above all, it highlights the weak link between two spatial units at the local level. The main constraint for potential migrants is lack of information on employment opportunities for nearly half of the rural households and one-quarter of the urban households studied (Table 10). Because of the total absence of formal sources of information, migrants mainly rely on migrant relatives and friends who visit their villages and town (Table 11). Thus, migrant networks perform a significant function in providing information about job opportunities and helping new migrants to secure accommodation and employment as part of linkages. Contrary to what might be expected, Wolenkomi town fails to channel such information to potential village migrants. Table 11. Sources of information on job opportunities (%). _________________________________________________________________________ Rural Urban _________________________________________________________________________ Migrants’ sources of information on job opportunities Migrants who visit villages/town 48.6 (35) 50.0 (17) Letter & telephone from migrant relatives & friends 23.6 (17) 29.4 (10) Radio and television 1.4 (1) 2.9 (1) Relatives & friends in the villages/town 22.2 (16) 17.6 (6) Relatives & friends in the nearby town/villages 4.2 (3) ----- __________________________________________________________________________ Source: Quantitative survey. Figures in brackets show reporting farmers and urban dwellers. The migration status of the population currently residing in rural and urban settlements shows that there are very few permanent migrants, and an equal number of migrants and natives, respectively (Table 12). In-migrants’ previous places of residence were rural settlements within and outside the wereda and region. It is the young, and especially women, who dominate among such migrants. Young men gave land shortage and young women gave marriage as important reasons for leaving their previous place of residence.

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Table 12. Migration statuses of households currently residing in study villages and town by wealth, gender and generation (in percent )

Migration status Total Gender Age Wealth Place of residence Percent M F Y O P R

Not migrant 81.3(65) (35) (30) (35) (30) (27) (28) Permanent migrant 18.7(15) (5) (10) (10) (5) (13) (12)

Rural

Returnee migrant --- --- --- --- --- --- --- With migrant member 40(16) (12) (4) (9) (7) (7) (9) With no migrant member 53(21) (12) (12) (11) (13) (13) (11)

Urban

Returnee migrant 7.5(3) (3) --- --- --- --- --- Notes: M=male, F=female, O=old, Y=young, p=poor and r=rich. Source: Own survey. Figures in the brackets are reporting farmers and urban dwellers Labour shortage because of out-migration by the young is no longer the problem of the community. Rather, it is used as safety valve in the face of land shortages and demographic pressure. Due to the small sizes of households, unwillingness of the young to work in traditional family labour and also physical weakness, labour shortage occurred among rich elderly men and rich divorced and widowed household heads. It attracted in-migrants mainly from rural areas outside. In addition, the area attracts large numbers of seasonal agricultural daily labour from rural areas outside the region, as far as Gojam, just before harvesting season for farming activities such as mowing and weeding. This is due in part to the relative productivity of the area, where most of the produce matures at this time. The numbers of Wolenkomi town dwellers involved in agricultural labour are insignificant, showing weak rural-urban linkages. The inhabitants in Wolenkomi town source labour power mainly from the town itself. The businesses are very small and largely run by the owners, usually using family labour. The limited employment opportunities in Wolenkomi town are reflected in the significant number of rural out-migrants to Addis Ababa. This indicates weak employment linkages between rural and urban areas at the local level. The return migration is non-existent in study settlements, with the exception of three demobilized soldiers in town (Table 12). One explanation may be that because manufacturing industries in Ethiopia are poorly developed, there are insignificant numbers of retrenched public sector workers. A second explanation may be related to land shortage in the returnees’ home villages. In summary, this shows weak linkages.

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Table 13. Remittances, the trend, reasons for the decline, and factors behind maintaining rural-urban links, (in %). ____________________________________________________________________ Rural Urban ____________________________________________________________________ Receipt of money or gifts in the past 12 months Yes 62.2 (23) 68.8 (11) No 37.8 (14) 31.2 (5) Trend of remittances in the past 5 years Decreasing 64.9 (24) 56.3 (9) Remain the same 24.3 (9) 25.0 (4) Increasing 10.8 (4) 18.8 (3) Reasons for the decline Low level of migrants education & the resulting low income 29.2 (7) 22.2 (2) High cost of living in the urban centres 45.8 (11) 55.6 (5) Employment insecurity 12.5 (3) 22.2 (2) Lack of job opportunities 12.5 (3) ----- Ceremonies that maintain the link Weeding 6.3 (5) (5) Funeral ceremonies 52.6 (10) (6) Traditional ceremonies 5.3 (1) (1) Religious ceremonies (such as Epiphany, Meskel) Christmas, Easter and New Year) 21.1 (4) (4) ____________________________________________________________________________ Source: Quantitative survey. Figures in brackets show reporting farmers and urban dwellers. Nearly two-thirds of villagers and 68.8% of urban dwellers received remittances in the form of money and kind (Table 13). Remittances also flow from rural relatives to students in urban areas in the form of foodstuffs and money. However, the increasing costs of living in town, especially in Addis Ababa, and involving in the less-paid and overcrowded informal sector have led to reductions in the quantities of remittances and gifts sent to villages and small town relatives in the past five years (Table 13). Despite the decline in remittances, social links between migrants and their villages exist. Visits to the villages and Wolenkomi town during weeding and for funeral ceremonies are particularly important in maintaining links across distance. Through social networks, migrant relatives and friends also provide information about job opportunities and accommodation for new migrants. Hence, social networks facilitate the provision of remittances and strengthen linkages. 3.2. Urban livelihoods and rural-urban linkages In Wolenkomi town, only one-quarter of inhabitants earn an income from a combination of non-farm activities and urban and rural agriculture. Those involved in such activities are rich elderly men with access to finance with which to rent land, buy inputs and hire labour. The primary occupation of Wolenkomi town residents is trade, followed by service provision, mainly in the informal sector (Table 14). This suggests that the town acts as a marketing centre for agricultural produce and industrial goods, as well as a service centre. No forward linkages between agriculture and processing exist. Hence, all industrial goods are produced outside the region and entirely bought in from Addis Ababa.

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Table 14. Combination of activities in urban settlement (%). Activity Type Two main

activities Variation based on:

1st 2nd Gender Generation Wealth Per cent Per cent M F Young Old Poor Rich Farmer in rural 15(6) 3.3(1) (6) --- (2) (4) (1) (5) Agricultural labourer --- 3.3(1) --- --- --- --- --- --- Urban agriculture 5(2) 3.3(1) (1) (1) --- (2) -- (2) Trader in rural 5(2) --- (1) (1) (1) (1) (2) --- Petty traders in urban 20(8) 20.0(6) (4) (4) (5) (3) (2) (6) Retail traders in urban 15(6) 13.3(4) (7) (7) (9) (5) (6) (8) Carpenters in village 2.5(1) --- (1) --- --- (1) (1) --- Government employee 2.5(1) --- (1) --- (1) --- (1) --- Food vending 2.5(1) 10(3) --- (1) (1) --- (1) --- Katikala & tella selling 12.5(5) 16.7(5) --- (5) (1) (4) (5) --- Transporters 2.5(1) --- (1) --- (1) --- --- (1) House renting --- 6.7(2) --- --- --- --- --- --- Grain mills 2.5(1) --- --- --- (1) --- --- (1) Firewood, grass & straw vending --- 6.7(2) --- --- -- -- -- -- Service providers (2 bars, 1 bakery, 1 tej bet &1 barber & 1 butchery)

15(6) 16.7(5) (2) (4) (4) (2) (2) (4)

Total 100(40) 100(30) (20) (20) (20) (20) (20) (20) Source: Own survey. Figures in brackets show reporting urban dwellers. 3.2.1 Industrial goods trading and rural-urban linkages Trading of durable and non-durable goods is one essential livelihood strategy of those living in town. It allows traders to sell consumption and production goods to villagers and town dwellers and to purchase agricultural products from the people in villages. Consequently, there are a number of implications for rural-urban linkages. With regard to non-durable goods, the overwhelming majority of farmers reported purchasing goods such as soap, sugar, salt, matches, and kerosene, while approximately half of the farmers stated expenditure on shoes and clothes. This is in part due to the insignificant number of retail shops in villages (Table 8) and in part to the very close proximity of the study villages to Wolenkomi town. Nonetheless, a very few rural dwellers reported the purchase of durable goods such as radios, tapes, watches, etc., chiefly from Ginchi town. This indicates that such higher status goods require larger threshold populations than are found in small towns such as Wolenkomi. The main customers of town business owners are producers in rural kebeles, followed by those living in the town itself. In this way, Wolenkomi town serves as a distributing centre for industrial goods. In turn, trading activities link the capital city and counties abroad with the villages. Industrial goods marketing has a number of impeding factors that have implications for rural-urban linkages. One-fifth of town dwellers regarded poor access to finance as an important constraint to their livelihood, including rural and urban agriculture. The nature of rural-urban linkages depends on the size of capital, the place where credit is sourced

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and the strength of social capital. Insignificant numbers of rich town business owners seek credit from banks. Half of urban households receive loans from informal institutions in the form of relatives and friends in town in particular and to some extent from urban credit and saving institutions (Table 7). Informal credit also occurs between producers and urban traders. Few grain traders receive starting and working capital from rural-based farmers. Half of rural households also sell marketable crops on a credit basis and are paid after the trader has sold the crop in Addis Ababa or Nekemt. Even if this system has the potential to improve the livelihoods of urban residents, it shows limited financial linkage. One in four of the business owners interviewed also cited high taxation as the most important constraint to business development in town and in marketing their goods. This suggests that the regulatory policy system discourages the expansion of trade, hence limiting rural-urban linkages. Because of the low purchasing power of the local people and the overcrowding observed in the informal activities, low demand and high competition constrain business activities. These business owners also reported poor road connections and the high costs of transportation as impeding factors in linkages (Table 5), in addition to the monopoly of inputs selling. Lack of information on market prices is, however, no longer a problem for town dwellers as information on the prices of goods is sent by telephone from traders and commission agents in central and bigger markets (Table 6). Most of the traders in town believe that the returns from trade activities in the past ten years have improved, possibly due to the disappearance of service cooperatives and agricultural marketing boards under the trade liberalization policy. This allows the active participation of the private sector in retail activities and allows town dwellers to engage in several activities by reducing the lengthy bureaucratic license withdrawal procedures. In turn, this serves to strengthen rural-urban linkages. 3.2.2. Occupational diversification in town and rural-urban linkages As a result of both land shortage and good transportation linking the town with other urban centres, urban agriculture is not well developed in Wolenkomi town. When farming in rural areas by renting land is also taken into consideration, one-fifth of rich elderly male respondents with access to capital undertake it as their primary or supplementary activity. The increase in rural farming may be associated with economic reform that has allowed people to engage in several activities and with a land policy that permits them to rent in and rent out land. Those involved in rural farming are commuters at peak agricultural season. Rich elderly male respondents pointed out that the provision of credit and land for farming are the major interventions to improve urban agriculture, indicating the limited availability of land to be distributed as well as capital to rent in land from town councils and farmers in villages.

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4. CONCLUSIONS AND RECOMMENDATIONS Farming remains a major occupation for most of rural people in the study area although some of them derive their incomes from a combination of farming and non-farm activities. There were also high levels of out-migration among the young generations. Similarly, trade and service provision are the main activities in town, but traders and other urban service providers also engage in urban and rural agriculture. Agriculture faces problems such shortages of land for allocation, landlessness, small farm size, and unequal distribution of land. These have implications for rural-urban linkages by reducing the amount of surplus to be marketed and lowering agricultural produce flow from rural to urban areas. However, such problems cause people to involve in non-farm activities or to migrate out, hence leading to rural to urban flows of people. Land-related problems also limit rural-urban linkages in that they reduce the farmers’ potential to purchase industrial goods from urban areas. Landlessness also risks potential conflict among landless and landowners in the community. Marketing as a livelihood strategy of the rural people allows farmers to sell their agricultural produce. It shows strong linkages with urban markets at local, regional and national levels. It also allows farmers to purchase production goods required for agricultural intensification with the aim of improving the returns from agriculture. There are, however, no agricultural input and extension services linkage between rural areas and Wolenkomi town as farmers source inputs entirely from villages. It was found that the high price of inputs is one of the constraints to farming, and hence to linkages. Lack of information on the price of goods, poor road connections and the high cost of transportation lead to declining returns from agricultural produce marketing, which in turn limits the flows of goods from rural to urban areas. Producers require capital to augment their livelihoods and to enhance linkages. Poor access to finance is another constraint to farming and to non-farm activities in rural areas as well as trade, service and urban agriculture in towns. The financial linkage is very weak as the main sources of loans in rural areas and town are moneylenders and relatives in villages and town, respectively. Villagers also acquire limited amounts from traders and from the credit and saving institution in town. The emerging urban-based regional credit and saving institution is, however, not accessible to the poor due to high interest rates charged and the lack of credit partners. Non-farm activities, particularly trade, in rural settlements are not well developed. The common types of non-farm activities are agricultural daily labour for poor men and tella and katikala selling for poor women. Insignificant numbers of natural resource vendors commute to town. Non-farm activities therefore show weak linkages. As far as migration is concerned, the main reasons for migrating out are lack of access to land in rural areas and the shortage of available capital from towns. The main destination for out-migrants is Addis Ababa. The significance of Wolenkomi town as an urban destination for out-migrants is, however, negligible. This indicates limited employment linkages. Out-migration is constrained by lack of information on job opportunities, even

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though migrant relatives provide information. Wolenkomi town fails to provide information on job opportunities, which is indicative of weak linkages. Remittances in cash or kind show some linkages in both areas. In the surveyed town, the primary occupation of the people is trade, followed by service provision mainly in the informal sector. The level of diversification into urban agriculture is negligible but there are significant numbers of town dwellers that commute to produce crops on rented land in rural areas. Trading industrial goods is an important livelihood strategy for town dwellers. It allows the selling of durable and non-durable consumption goods to local people. Traders in towns import industrial goods from central markets and connect outside markets with the local people. The trading of industrial goods shows strong linkages. Nonetheless, there is no agroprocessing unit as evidence of forward linkages. High taxation, lack of credit, intense competition, poor road connections, the high cost of transportation, and the monopoly of inputs selling are some of the problems town dwellers face when undertaking their main activities, leading to reduced profits and subsequently limiting rural-urban linkages. The present government has given some attention to activities outside agriculture in rural areas and the urban sector in recent years. However, additional effort is still required to enhance the livelihood strategies of the people through strengthening rural-urban linkages. It was found that different groups pursued a combination of different livelihood strategies that span the rural-urban divide. This entails that the spatial and occupational diversity of the local people’s livelihoods needs to be recognized. The interventions should concentrate on improving assets for both rural and urban sectors and areas, with the aim of expanding livelihood options and strengthening rural-urban linkages rather than assuming villagers to be farmers and urban dwellers to be traders and service providers. Access to working capital is a key element of government support, in addition to supportive regulatory and taxation policies to expand micro- and informal enterprises based in town for local people. These would also increase the labour absorptive capacity of business sectors, thus strengthening rural to small town migration. Traders link hinterlands with local, regional and national markets. They also provide credit and information on market prices for producers. Hence, more support should be given to traders to improve their livelihood strategies and to strengthen linkages. Unless the interest rates are affordable, it will be more difficult for the poor to access loans. Ways must be sought to ensure that the local people’s activities benefit from the services of micro-finance institutions, especially the poor who have no credit partners or collateral. In this regard, there is a need to enhance social capital through the promotion of rural small-scale credit institutions that are accessible to the landless poor, operated by the members themselves and self-sustaining. Credit institutions should be based on saving and loans, organized according to conventional backing criteria but with possible government facilitation.

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Without the intensification of farming systems, small-scale farmers cannot produce for sale. Immediate attention should therefore be given to providing rural farmers with sustained intensification by making inputs, farming implements and credit accessible and affordable to them, especially to the poor. High levels of surplus production in villages enhance business opportunities in towns linked to the agricultural sector, such as input supply, marketing and agroprocessing. At the same time, this attracts several actors and strengthens linkages between villages and wider networks of markets. Clearly, the unequal distribution of land is one of the factors limiting rural-urban linkages. Thus, there is a need to conduct a participatory survey on the reallocation of land in the localities so that appropriate policy measures can be adopted. Strengthening linkages requires the involvement of the private sector in the marketing and distribution of inputs. The private sector also reduces the price of inputs by enhancing competition. It also improves the returns from farming and rural-urban linkages. The government in Ethiopia emphasizes agroprocessing industries. The implementation of this strategy would strengthen forward linkages at local, regional, national, and international levels. Finally, reducing transport costs through improved main roads used by tracks and also local feeder roads could lead to increases in the market prices and hence to farmers and traders’ profits. This would also facilitates out-migration and ensure frequent rural-urban linkages. Creation of two-way information and communication systems that include information on market prices and job opportunities for potential migrants would help to strengthen rural-urban linkages. More specifically, there is a need to develop a system of public officials using e-mail in small town post offices. There should also be information service centres in small town post offices that inform about countryside products and job opportunities on websites to attract consumers and potential migrants to the area.

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Department of Geography and Environmental StudiesAddis Ababa UniversityEthiopia

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Mohammed Seraje Livelihood strategies and their implications for rural-urban linkages: The case of Wolenkomi town and the surrounding rural kebeles

Working papers on population and land use change in central Ethiopia, nr. 10

Acta Geographica-Trondheim

Serie A, Nr. 18 Series A, No. 18

Avhandlinger og rapporter/Theses and reports

October 2007

I n n o v a t i o n a n d C r e a t i v i t yI n n o v a t i o n a n d C r e a t i v i t y

Addis Ababa University

Addis Ababa University

Acta Geographica-Trondheim is the continuation of Papers from the Department of Geography, University of Trondheim, which came out 1978-2001.

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