Nonfarm Employment and Household Vulnerability to Food Poverty in Rural Cameroon

ABSTRACT: Developing countries' economies are largely dominated by the agricultural sector, with several rural households relying on farming for their livelihoods. However, the nonfarm economy has gained prominence in complementing farm incomes. This paper examines the implications of nonfarm employment for household vulnerability to food poverty in rural Cameroon using the most recent three waves of Cameroon household consumption surveys. Specifically, the paper examines the evolution of food poverty indices by nonfarm participation status over the period 2001-2014, assesses the effect of nonfarm employment on vulnerability to food poverty and investigates the evolution of vulnerability to food poverty by nonfarm participation status over the period 2001-2014. To achieve the set objectives, the paper employs a battery of statistical and econometric techniques. Specifically, it employs the FGT class of poverty measures to compute food poverty indices. The paper addresses the endogeneity of nonfarm employment status using the Control function technique, which exploits the estimated probit reduced form equation to compute a generalized residual. This residual is subsequently included in the food expenditure generating function as an additional variable. The augmented food expenditure model is then estimated using the feasible generalized least squares (FGLS) technique to assess the determinants of expected food expenditure and compute and decompose the vulnerability indices. Results reveal that over the structural period 2001-2014, changes in food poverty were significantly more wide-spread, deeper and severer among non-diversified households compared to diversifiers We further find that nonfarm employment significantly increases households' expected food consumption spending, which is equivalent to reducing their vulnerability to food poverty. Results further indicate that vulnerability to food poverty increased among non-diversifiers over 2001-2014, meanwhile among diversifiers, no significant change was observed. These findings highlight the importance of interventions aimed at encouraging rural households to diversify into nonfarm activities as a strategy for mitigating the risk of food poverty. By promoting economic diversification, such interventions hold promise in bolstering resilience against food insecurity among rural populations. Thus, policymakers and development practitioners could prioritize initiatives that facilitate access to nonfarm employment opportunities.