Agriculture, Rural Nonfarm Economy and Income Diversification: Rural Livelihoods in Kyrgyzstan

Abstract: The aim of the thesis is to investigate livelihoods of rural households and the role agriculture and nonfarm economy play in them. More specifically, the paper investigates income generation and income diversification strategies employed by rural households in the northern part of Kyrgyzstan. Kyrgyzstan was one of the poorest Soviet Republics, which for nearly 20 nears since independence has been struggling with poverty, social and political instability. Qualitative approach of data collection, namely semi-structured interviews with experts and life history interviews with household members, was used in combination with quantitative data from previous studies as well as country reports of international aid organizations. It has been discovered that although agriculture remains an important driving force of the economy of the country, rural households rely on the income derived from agricultural activities as a safety net rather than main source of income. Rural household incomes were revealed to be largely comprised of income coming from rural nonfarm activities, including internal labor migration. The most successful risk management strategies were discovered to be employed by households that effectively utilized opportunities offered by both rural and urban areas – by combining regular wage employment as a stable source of income and farming income as a safety net.