Kate Higgins (2011), Chronic Poverty Research Centre, Working Paper, No. 204, May.

Analysis based on qualitative data set collected in six research sites in Tanzania, shows that while agriculture is a key factor in supporting upward mobility, it is non-farm businesses, the accumulation of physical assets, salaried employment and favourable marriage that are critical in helping people exit poverty.

Experience of several high-growth developing countries in recent years has shown that economic growth alone is not sufficient for bringing about poverty reduction. Tanzania is one such country where despite significant income growth over the past decade, its record in poverty reduction has been abysmal. At the same time, research shows that even in the Tanzanian context, where poverty is the overwhelming trend, some households have experienced upward mobility and a tiny proportion of households have actually managed to escape poverty. Although this is true only for a small proportion of the population, it is important to understand the reasons behind people’s upward mobility or exit out of poverty and draw lessons from them.

Analyses by various researchers show that in Tanzania, diversification of livelihood sources, both on-farm and off-farm, is critical in facilitating movements out of poverty. In fact, while on-farm diversification is important for income growth, it is off-farm diversification that is more important for explaining exit from poverty. Additional factors that are found to be important correlates of avoiding poverty are: ownership of multiple assets, credit society membership, access to bank loans, the level of education of the household head etc.

In this paper, Higgins, seeks to identify the factors that supported household’s upward mobility, and in some cases, helped them move out of poverty. Analysis is based on qualitative research carried out in six sites across Tanzania, and the 2007 Tanzanian Household Budget Survey (HBS) and National Panel Survey (NPS). Qualitative data was collected using focus group discussion (FDG), life history interviews (LHI) and key informant interviews (KII). In each site, four FDGs were conducted, of which two were devoted to ‘well-being ranking FDGs’ with men and women. Six well-being classifications, ranging from destitute (1); very poor (2); poor (3); vulnerable but not poor (4); resilient (5) to rich (6), were used for categorising the households. In order to make the well-being classifications locally relevant, the ‘well-being ranking FDGs’ were asked to attach local characteristics to each of the classifications. The next step involved, ranking the well-being of the 144 HBS households in 1999 and 2009 and identifying “reasons for improved, declined or stable well-being”. Upward socio-economic mobility is defined as an improvement in well-being, “by one well-being classification or more”. Poverty exit is defined as the movement from poor (i.e. well-being classifications 1, 2 or 3) to non-poor (well-being classifications 4, 5 or 6). Also, 106 LHIs were conducted with selected individuals to understand the trajectories of the household’s movement in well-being.

Analysis based on the two data sources: the well-being ranking FDGs and the LFIs, bring out several interesting points. One, the results confirm the Tanzanian paradox - “the stubbornness of poverty despite sustained economic growth” - as majority of households were identified as “non-movers”, i.e. those whose well-being have not changed between 1999 and 2009. Indeed, only a small proportion of households in the research sites can be deemed to be ‘poverty escapers’ or ‘upward movers’.

Two, agriculture plays a key role in facilitating upward mobility of households in Tanzania. Specifically, the FDGs show that agriculture/fish farming as well as a combination of agriculture/fish farming with another activity (such as “a non-farm business… salaried employment”) are the main factors that contributed towards upward mobility of households between 1999 and 2009. LFIs also bring out the importance of ownership of physical assets and marrying into a better-off family in explaining upward mobility.

Three, in contrast to the cases of upward mobility, analysis of factors facilitating escape from poverty shows that, “agriculture on its own is not the factor that moves … a household out of poverty in these six research sites”. Instead, the accumulation of physical assets, non-farm business, salaried employment and ‘marrying up’ are considered critical for exiting from poverty.

Four, the study shows that age matters in determining a household’s socio-economic mobility. This is reflected by the fact that “in the vast majority of cases, individuals escaped poverty in their twenties or thirties”. Also, the study supports the view that intergenerational transfer of wealth plays a key role in determining current well-being status of most households in Tanzania. However, when it comes to exiting from poverty, the initial wealth-holdings do not play a decisive role, at least in the sample households selected for the study.

Five, a closer analysis of the LFIs, in particular the ten individual cases, leads to a more nuanced understanding of the role played by agriculture in facilitating movement out of poverty. In particular it shows that agriculture plays a key role in supporting “the accumulation of physical assets, which in turn, helps people move out of poverty”. Other individual cases highlight the importance of diversified livelihood sources (such as the combination of agriculture and non-farm business), formal education, and salaried employment, etc. in supporting poverty escape.

In the light of these findings, the author makes a number of policy recommendations that can support more households to escape poverty. She suggests that agricultural development should be accorded priority in policy making. To this end, effective agriculture programmes to support smallholder agriculture as well as programmes to improve storage schemes and increase local purchase need to be implemented. The government also needs to pay more attention to rural industrialisation as well as increase poor people’s access to credit and post-primary education. Further, given that “asset accumulation – particularly the accumulation of land – is central to the poverty escape story in rural Tanzania”, the author also suggests that “policy needs to support this accumulation processes, by ensuring people can access land, as well as ensuring equitable distribution”.