The government of Honduras is becoming increasingly concerned about slow progress in combating rural poverty, which is especially stark in the hillside areas.While both policymakers and donors are under strong pressure to provide adequate interventions, the government and its development partners have insufficient information about what drives sustainable rural productivity growth; they therefore have little guidance on how to prioritize expenditures and develop strategic directions for the rural sector.This report provides policymakers and stakeholders in Honduras with empirical information about livelihood strategies employed in the country’s hillside areas, existing poverty-alleviation opportunities, and potential policy and investment priorities, based on extensive survey data for376 farm households, 1,066 parcels, and 2,143 individual plots located in 95 rural hillside villages in Honduras.
Households in the rural hillsides of Honduras have widely differing asset endowments and livelihood strategies. Households that rely on basic grain farming are the poorest because they are often located in isolated areas with relatively poor agroecological and socioeconomic conditions. Opportunities for off-farm work tend to be limited in these areas, and household strategies that combine on-farm work with off-farm work generate higher incomes.Soil fertility has a strong, direct, and positive impact on income, while agro climatic conditions such as higher rainfall and altitude have an indirect positive income effect because they stimulate more remunerative livelihood strategies. Land is not the key constraint limiting the potential for higher incomes in the study regions; more land per se does not lead to higher income per capita, and households withless land are able to compensate by obtaining higher productivity or by pursuing off-farm activities. Land tenure also has no impact on crop productivity and household income, but adoption of sustainable land use practices is higher on owner-operated plots than on leased ones.
Ownership of machinery and equipment enables households to raise labor and land productivity and is especially helpful for households with relatively high opportunity costs for labor, such as those pursuing off-farm employment or coffee production. Livestock ownership, on the other hand, has no significant direct impact on crop productivity and per capita income.