2.

Review of related literature

2.1. Pattern and trend of urban growth in Ethiopia
Ethiopia is currently of the least urbanized countries in the world even Africa. Less than one person
in five is a city or town dweller. However, the rate of at which the countries urban areas the
growing are among the highest in Africa. Many social, economic, and environmental problems
have accomplice urbanization in Ethiopia and have been ignored for too long (Kebbede, 2017). The
people residing in urban areas also increasing from 4–3 million in 1987 to 7–4 million in 1994,
which is estimated to have already reached 10–6 million in the year 2003 and projected to reach
20 million by the year 2020 (Kasa et al., 2011) (see Figure 1).
2.2. Impacts of urbanization
As activities develop, effects can include a dramatic increase and change in costs often pricing the
local working class out of the market including such functionality as employs of the local municipalities
(Tessema, 2017). Urban problems along with infrastructure developments are also fueling
suburbanization trends in developing nations through the trends for core cities inside nations tend
to continue to become ever denser (Glaeser & Steinberg, 2017) (Figure 2).
Peri-urban areas surrounding the urban areas are characterized as one of the most vulnerable
geographic areas for the risk subjected to farmland loss in the expansion of urbanization that makes
farmers loss of livelihood assets (B. B. Muluwork, 2014). The expansion of urban areas over natural
resources and agro productive system has been a characteristic process which has resulted in the

Coping Strategies of the household

Moreover, Survival strategies of the poor include living in slum and shanty area, engaging in various
informal activities, scavenging around waste disposal sites and market places, and migration.
Nonetheless, some of the coping and adoption strategies of the poor appear to be inconsistent with
formal rules and regulations of the city administration, and the country’s law at large. As a result,
their livelihood activities as well as their survival strategies are highly contested (Degefa, 2008).
Economic and social risks are influenced by gender dynamics and may have important differential
impacts on men and women. For example, women typically have lower levels of education; less
access, ownership and control of productive assets; less access to credit; and different social
networks than men, leading to lower economic productivity and income generation and weaker
bargaining positions in the household. This leaves them particularly vulnerable to economic shocks.
Furthermore, social sources of vulnerability, which are often as or more important barriers to
sustainable livelihoods and general well-being than economic shocks and stresses, also typically
work to particularly disadvantage women. Not only do women lack voice in national and community
fora, but their power in the household is often as limited as their time. Female-headed households,
typically suffering from a deficit of labour, are among the poorest groups in Ethiopia. (Jones, Yisak
and Tassew, 2010). The livelihood concept of urban poverty recognizes the need for individuals and
household members to engage in multiple economic activities: rely on material and non-material
assets as well as available natural resources to meet their needs and improve their wellbeing. Urban
household poverty coping activities are categorized into seven major leads namely; Economic
activities, Expenditure and Purchase pattern, Shelter and Environmental Services, Social Services,
Rural-Urban Ties and social network. Sujuwade (2008) observed that Economic activities form the
basis of household strategy to which other strategies like urban food production, maintenance of ties
with rural areas, decision about access to education, housing and participation in social network, may
be added. The urban household coping strategies grouped under Economic activities range from
involvement of more household members in urban informal sector employment, (such as
construction work, vending, driving and transport work, factory work) to use of domestic spaces for
production and reproduction of income generating activities. These are done in order to enhance the
income generated in the household. The income so generated is prioritized in meeting the basic needs
such as education, health care, and clothing. Hossain (2005) shared similar view when he pointed out
that as most of the earnings of the poor are used for food and shelter, very small portion of their
earning is spent on clothing, medicine, education and other incidentals.

Determinants of Poverty in Ethiopia

The poor in Ethiopia are entwined in a web of interrelationships between the various determinants of
poverty. Intrinsic deficiencies in the resource base of the productive forces have become critical
drawbacks in alleviating the poverty situation. Lack of equity in the access to productive resources
and basic services and their consequential benefits as well as lack of access to opportunities to
develop skills and human capabilities have impeded the socio-economic development of the poor. In
addition, absence of the means by which the poor can address their problems and enhance their active
participation in decision-making have hindered their attempts to move out of the state of deprivation.
Accordingly, a closer assessment of the poverty situation in Ethiopia clearly depicts the prevalence of
six major factors that are highlighted as contributing to the exasperation of poverty in Ethiopia.
These include: low agricultural production, low non-farm income, low education and poor health,
high population growth and weak institutional structures. These key elements are in fact connected
with each other to influence the poverty situation in Ethiopia.

Vulnerability context
The vulnerability context forms the external environment in which people exist and gain
importance through direct impacts upon people’s asset (Devereux, 2001). It comprises trends
within which people pursue their livelihoods includes:
trends: such as economic trends, resource trends
shocks: such as conflict, economic shocks, health shocks and natural shocks,
such as; earthquakes
seasonality: seasonal fluctuations in prices, production, health, employment
opportunities represents the part of the framework that lies furthest outside
stakeholder’s control

These factors can have a direct impact on people’s assets and the options available to them to
pursue beneficial livelihood assets. Shocks can destroy assets directly or force people to abandon
or prematurely dispose of them as part of their coping strategies – for example selling off
livestock in the face of drought or to pay for medical care. Not all trends and seasonality must be
considered are negative; since they can move in favorable directions. For example new
technologies, medical advances or positive economic trends can help improve people’s
livelihoods. Thus, trends in new technologies or seasonality of prices could be used as
opportunities to secure livelihoods.
The vulnerability context of people’s livelihoods is usually influenced by external factors outside
their direct control and is dependent on wider policies, institutions and processes. To support
people to be more resilient to the negative effects of trends, shocks and seasonality, development
policy-makers and practitioners can support people’s access to assets and help ensure that critical
policies, institutions and processes are responsive to the needs of the poor.

Livelihood resources/assets
The livelihood approaches is concerned first and foremost with people. So an accurate and
realistic understanding of people’s strength (here called “assets” or “capital”) is crucial to
analyze how they endeavor to convert their assets into positive livelihood outcomes
(Bebbington,1999). People require a range of assets to achieve their self-defined goals, whereas
no single capital endowment is sufficient to yield the desired outcomes on its own. Since the
importance of the single categories varies in association to the local context, the asset pentagon
offers a tool to visualize these settings and to demonstrate dynamical changes over time through
constantly shifting shapes of the pentagon.
Natural capital
Different scholars define the term natural capital in different ways that suit into their intellectual
and conceptual context. Among these scholars, Kollmair and Gamper are the ones with their own
definition of the term and their understanding of the term is given as follows;
Natural capital is the term used for the natural resource stocks from which resource and
service flow and it is of particular significance for all or part of their livelihoods from
natural resource-based activities; for insistence, a good air and water quality correspond
to a foundation for good health and other features of a livelihood. (Kollmair and
Gamper, 2002)

Financial capital
Kollmair and Gamper (2002) and DFID (1999), argues that financial capital corresponds to the
financial resource that people use to accomplish their livelihood objectives and it comprises the
important availability of funds or equivalent; and it is a multipurpose as it can be converted in to
other types of capital or it can be used for directly accomplishing a livelihood outcomes that
allow people to adopt different livelihood strategies.

Two main source of financial capital can be identified:

Available stocks comprising cash, bank deposits or liquid assets such as livestock and
jewelry, not having liabilities attached and usually independent on third parties.
Regular inflow of money comprising labor income, pension, or other transfers from the
state, the remittance, which are mostly dependent on other and need to be reliable.

Physical capital
Physical capital includes the fundamental needed to support livelihood, such as reasonable
transport, sheltered and housings, sufficient water supply and sanitation, reasonably priced
energy and access to information (DFID, 1999). Physical capital comprises the basic
infrastructure and producer goods needed to support livelihoods. Infrastructure consists of
changes to the physical environment that help people to meet their basic needs and to be more
productive. Producer goods are the tools and equipment that people use to function more
productively (DFID, 2000).
Human capital
Ferrington et al. (2002), DFID (1999), and Kollmair and Gamper (2002) argues that human
capital refers to the skills, knowledge and ability to work. Human capital is highly dependent on
sufficient nutrition, health care, safe environment conditions, and education. Poor people living
in urban areas normally have better access to health service than their counterparts in rural areas.
Urban areas have advantage in terms of access to education than rural areas and low ratios of
primary school enrollment in rural areas and attributed to long distance to walk to school in rural
areas.

Social capital
Braun (2007), explain that, social capital is used in a community that brings people together for
common purpose and associated with many desirable outcome such as faster social and
economic development, greater helpfulness of political system, and better health. Besides,
Kollimair and Gamper (2002) assert that in the context of the SLA it is the social resource upon
which people draw in search of their livelihood outcomes such as network that adds to peoples
trust and ability to cooperate or participate in membership of more formalized groups and their
arrangements of rules, norms and sanctions.
Social capital includes the features of social organization, such as trust, social norms and
networks that can improve the efficiency of society by facilitating coordinated action.
Cooperation is often required between workers and managers, among political parties, between
the government and private groups, between firms and voluntary organizations (Putnam, 1993).

Transforming structure and processes

Transforming structure and processes represent the institutions, organization, policies and
legislation that shape livelihoods. They are of central importance as they operate at all level and
effectively determine access, terms of exchange between different types of capital, and returns to
any given livelihood strategy Sheng , (nd). Structure can be described as the hardware (private
and public organizations) “that set and implement policy and legislation, deliver service,
purchase, trade and perform all manner of other functions that affect livelihoods” (DFID, 2000).
An absence of well working structures often constitutes an obstacle to sustainable development
and makes simple asset creation difficult in case of adverse structure impending access to apply a
certain livelihood strategy. In contrast to other approaches, where scarcity and underdevelopment
was thought to be a problem of people not having enough due to lacking capital endowments, the
SLA analyses it as a problem of access and the possibility to control the available resources that
are often sufficiently at access and the possibility to control the available resources that are often

Complementary to structure, processes constitute the software determining the way in which
structure and individuals operate and interact. There are many types of overlapping and
conflicting processes operating at a variety of levels and like software, they are crucial and
complex. Important processes for livelihoods are for instance policies, legislation and
institutions, but also culture and power relation. They may serve as incentives for people to make
choices, they may be responsible for access to assets or they may enable stakeholders to
transform and substitute one type of asset through another.
Transforming structure and processes occupy a central position in the framework and directly
feedback to the vulnerability context, while influencing and determining ecological or economic
trends through political structure, while mitigating or enforcing effects of shocks or keeping
seasonably under control through working market structure; or they can restrict people’s choice
of livelihood strategies (e.g. caste system) and may thus be a direct impact on livelihood
outcomes.
Livelihood strategies
Livelihood strategies comprise the range and combination of activities and choices that people
undertake in order to achieve their livelihood goals. Within the sustainable livelihood
framework, three broad groups of livelihood strategies are well- known. These are agricultural
intensification (more output per unit area through capital investment or increase in labor input)
or diversification i.e., it may involve developing a wide income earning portfolio to cover all
types of shocks or stress jointly or the strategy may involve focusing on developing responses to
handle a particular type of common shocks or stress though well- developed coping mechanisms,
or move away and seek a livelihood, either for the time being or permanently) and migration
(move away and seek a livelihood, either for the time being or forever), elsewhere or more
commonly, follow a combination of strategies together or in sequence (Scoones, 1998).

According to DFID (2000), different livelihood activities have different requirements, but the
general principle is that those who are amply endowed with assets are more likely to be able to
make positive livelihood choices. That is, they will be choosing from a range of options in order
to maximize their achievement of positive livelihood outcomes, rather than being forced into any
given strategy because it is their only option.

Livelihood outcomes
Livelihood outcomes are the achievement of livelihood strategies, such as more income (e.g.
cash), increased well-being (e.g. non material goods, like self-esteem, health status, accuses to
service, sense of inclusion), reduced vulnerability (e.g. better resilience though increase in asset
status), improved food security (e.g. increase in financial capital in order to buy food) and a more
sustainable use of natural resource (e.g. appropriate property right). Outcomes help us to
understand the output of the current configuration of factors within the livelihood framework;
they demonstrate what motivates stakeholder to act as they do and what their priorities are
(Scoones, 1998).

Options and Opportunities of Livelihood Strategies

According to Scoones (1998) and De Haan (1997), within the sustainable livelihoods framework,
There broad groups of livelihood strategies are well-known: these are to cover variety of options
Open to rural people, either they gain more of livelihood from agriculture (including livestock
Background, aquaculture, forestry etc.) throughout the processes of agriculture intensification
(more output per unit area through capital investment or increase in labor inputs), livelihood
diversification (may involve developing a wide income earning portfolio to cover all types of
shocks jointly or the strategy may involve focusing on developing responses to handle a
particular type of common shocks through well-developed coping mechanisms) and migration
(move away and seek a livelihood, either for the time being or forever, elsewhere, or more
commonly, follow a combination of strategies together or in sequence.
Farringto et.al, (2002) states that livelihood strategies are planed range of activities that designed
to build asset bases and access to goods and services for expenditure like coping strategies
designed to respond to shocks in the short period of time and adaptive strategies designed to
improve circumstances in the long term. Besides, Ruijsink (2004) defines livelihood strategies
as they are determined by the assets and opportunities available to communities as well as by the
choices and preferences of men and women.
Agriculture Intensification
Agricultural intensification has been defined as ‘increased average inputs of labor or capital on a
smallholding, either cultivated land alone, or on cultivated and grazing land, for the purpose of
increasing the value of output per hectare’ (Tiffen et al. 1994) Agricultural intensification may
occur as a result of; an increase in the gross output in fixed proportions due to inputs expanding
proportionately without technological changes, a shift towards more valuable outputs or
technical progress that raises land productivity. In practice the intensification process may occur
as a combination of these, but the relative feasibility of the three components is likely to vary
greatly in different areas.

For intensification to occur an increased demand for output is usually necessary. Alternatively a
fall in the availability of a key factor such as land, water or labor may also necessitate
intensification even if demand does not rise. (However, Pingali and Binswanger (1988) argue
that there is a remarkable degree of substitutability of capital and labor) Increased demand may
be through population growth, in-migration or increased market demand in a country or region,
or demand for higher value added output (such as fruit, vegetables etc.) when income per head
grows. Agricultural intensification requires labor or capital to enable the increased inputs
necessary to raise the value of output per hectare.
Livelihood diversification

Livelihood diversification
The rural economy is not based solely on agriculture but rather on a diverse array of activities
and enterprises. Much recent thinking on this subject is based on the concept of livelihood
diversification as a survival strategy of rural households in developing countries (Ellis, 1999).
Ellis (1999) defines livelihood diversification as the process by which rural families construct a
diverse portfolio of activities and social support capabilities in their struggle for survival and in
order to improve their standards of living.
According to Mohammed (2007), the diversification of income source is increasingly essential in
reducing the vulnerability of rural households and in many areas, that of urban household too.
Three factors are important in facilitating income diversification. First, education is crucial to
enter non-farm labor markets even basic literacy levels are necessary to achieve some success.
Second, in many cases income diversification involves some mobility, most often circular
migration. Some security of access to land in home areas is essential to ensure that people do not
lose the farming component of their livelihood if they move away temporarily. Third, non-farm
natural resources such as land and water that were previously used for farming.
Farming remains important but rural people are looking for diverse opportunities to increase and
stabilize their incomes. The notion of livelihood diversity is based on framework that considers
the activities According to Mohammed (2007), the diversification of income source is
increasingly essential in
reducing the vulnerability of rural households and in many areas, that of urban household too.
Three factors are important in facilitating income diversification. First, education is crucial to
enter non-farm labor markets even basic literacy levels are necessary to achieve some success.
Second, in many cases income diversification involves some mobility, most often circular
migration. Some security of access to land in home areas is essential to ensure that people do not
lose the farming component of their livelihood if they move away temporarily. Third, non-farm
natural resources such as land and water that were previously used for farming.
Farming remains important but rural people are looking for diverse opportunities to increase and
stabilize their incomes. The notion of livelihood diversity is based on framework that considers
the activities of the rural poor as being determined by their portfolio of assets, including social,
human, financial, natural and physical capital (Carney, 1998). Activities and livelihood strategies
therefore reflect farmers’ assets and further influenced by the institutions that they interact with
and broader economic trends such as market prices and shocks such as drought. Rising farm
productivity is a driver of the rural non-farm economy, with linkage both farm production
(processing and agro-industries) and consumption (increased demand for manufactured products
and inputs) (Chapman and Tripp, 2004).
Similarly research on livelihood diversification to date has tended to be preoccupied with four
main aspects. One is the determinants of diversification i.e. the factors that cause families to
adopt more diverse livelihood strategies, rather than switching between full-time specialized
occupations (Ellis, 1999). A second is the asset basis of livelihood that permits this
diversification to be more or less easily accomplished (Dercon & Krishnan, 1996). A third is the
income distribution effects of different patterns of diversification and the potential to identify
different income sources as having equalizing or disequalizing effects on rural income. The
fourth is weather diversification has beneficial or detrimental effects on farm output and
productivity (Scoones 1998).
Adams (1995) asserts that, diversification can certainly improve food security in the face of high
risks of drought or other climatic disturbances. The capability to diversify is enhanced by human
capital in the form of higher education level. Education level is a critical determinant of the type
of labor markets in which diversification takes place. Those with more education can gain jobs in
skilled and salaried labor markets, while those with less education must often make do with
casual, unskilled and part-time work in low wage labor markets. Whether participation in
nonfarm
labor markets equalizes or disequalizes rural incomes depends on both assets and activity
consideration.
Migration
Migration is defined within a defined time period. A movement from one administrative area to
another is defined as migration only if it occurs within a certain time frame, say three, six
months, a year etc. or if it is determined that the move (mobility) is made with the intention of
changing place of residence even if it is less than the established time frame. It is, therefore, vital
to define between different migration causes (e.g voluntary and involuntary movement), effects
(such as reinvestment in agriculture, enterprises or consumption at the home or migration site)
and movement patterns (Scoones, 1998).

Rural livelihood and rural urban linkages

According to Mohammdes (2007), 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,
nonfarm
activities, migration, or multiple activities. The rich and elderly with access to land involve
only in crop production, while the rich and the young landless and young landowners derive their
income from more than one activity, which producing high returns. Likewise, the poor with land
engage in both farming and low-return activities. However, landless poor men and women
engage only in less remunerative non-farm activities. In general, two types of flows can be
distinguished. The first type is special, which includes flows of people, goods, money,
technology, knowledge, information, and waste. In biophysical perspectives, flows of water,
biomass products and nutrients are relevant. The second type is sectorial, which includes flows
of agricultural products going to urban and peri-urban areas, and goods from the urban
manufacturing areas going to more rural areas (Tacoli,1998)
Through goods and factors can move from one area to the other, such movement involve costs.
Such costs may be information costs, transport costs, or policy-induced costs. Such costs may be
the result of non-economic or historical factors, and as these costs are reduced, spatial integration
will increase, resulting in increasing trade between rural and urban areas and subsequently, an
increased level of rural urban linkage (Carney 2002).

CONCEPTS AND ANALYTICAL FRAMEWORK

Poverty and food insecurity are highly interwoven issues that reinforce each other. Poverty is a driving force for household food
insecurity, and food insecurity, in turn, impoverishes a household. Both poverty and food insecurity are multifaceted and
complex phenomena. A household is regarded as poor when it is deprived of basic livelihood resources/ assets for meeting basic
needs (food, clothing, health and shelter); when it lacks the capacity to withstand various shocks; and when it has no power to
make decisions on community-based issues and no say concerning government actions. (6) Food insecurity relates to sufficiency
(the calories needed for an active and healthy life), access (the capacity to produce, purchase or exchange food or receive it as a
gift), and security (a balance between vulnerability, risk and insurance). (7) The application of a sustainable livelihood framework
contributes to an understanding of the relationship between these factors.
The sustainable livelihood framework involves five interrelated

The sustainable livelihood framework involves five interrelated components:

• capital assets;
• existing context;
• mediating processes;
• activities and strategies; and
• livelihood outcomes.

Livelihood assets can be grouped under five types of capital:

• natural capital (land and water);
• social capital (networks, membership of groups, relationships of trust, access to wider institutions of society);
• human capital (skills, knowledge, good health and ability to work);
• physical capital (production equipment, transport, shelter, water supply, energy and communication); and
• financial capital (savings, supplies of credit and regular remittances or pensions). (8)
Theories related to sustainable livelihood
Modernization Theory
According to modernization theory change from traditional to modernization was to occur
through the definition of capital, technology, values, institutional arrangements and political
beliefs. From this point of view, the industrialization in the West was believed to be model that
should emulate. The notation of rural-urban areas duality was derived from conformity literature
of urban developments that consider urban areas as the centers of urbanization and development
and consider rural areas as zone of economic backwardness and cultural tradition (Slater, 1986)
sited in Tegegne (1999).
On the other side the theory put emphasis on access to basic needs and provision of universal
coverage of primary school. This indicates that the need of rural poor people should be meet and
its implication are agricultural growth is the engine for growth. This growth is not only providing
food but also stimulate demand for industrial growth and urban development. So that the
augment based on modernization theory that could imply urban centers brought about the growth
of rural development. This is the process that brings about the growth of urban and rural linkage
concept as one strategy to realize economic and social development. In the late 1950s and early
1960s export oriented industries in large cities as the engine of growth and trickle down effects
expected to stimulate agricultural production. But the result is not as expected. Therefore during
the late of 1960s and early 1970s agriculture was the driving force for development for poor rural
economies (Tegegne, 2005).
Central Place Theory
Walter Christaller (1972) achieved the central place theory to explain how urban settlements are
formed and spaced out relatively to each other. The main premises of Christaller’s theory was
that if centralization of the mass around the nucleus is an elementary forms of order of each other
than the same centralized principle can be equated in urban settlements. The size of the center is
determined by the types of goods and services it produced, where by the large settlements (few
in numbers) produces goods and services of ‘higher order’ (which require large market both in
income and population therefore the manner of specialization) and smaller settlement produces
goods and services of ‘lower order’
Prominent Theory
Davis (2004) identified the debt of the nature of the urban and rural relation was hold on the
prominent theory and plan since 1950s. According to this study, two reason for the renewed
interests shown by policy makers. The increasing priorities in the market based strategy which
place their emphasis on export oriented agricultural production and rely on efficient economic
linkage connecting producers with external markets relation between urban and rural areas.