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Rural areas are the backbone for the livelihood strategy of most developing countries. Depending on a country’s level of advancement in the economic sphere, they contribute to the overall economic growth by creating jobs, supplying labor, food, and raw materials to other growing sectors of the economy and help to generate foreign exchange. However, despite these significant contributions, however, rural areas are the most marginalized. They are characterized by poverty, food insecurity, unemployment, inequality, and lack of important socioeconomic services (Zerihun, 2012).
Most livelihood researchers define livelihood as the ways and means of ‘making a living.’ The most widely accepted definition of livelihood stems from the work of Chambers and Conway (1992) that define livelihood as comprising the capabilities, assets (including both material and social resources) and activities required for a means of living. In line with the Sustainable Livelihoods Approach (SLA) (such as Chambers and Conway 1992, Carney 1998, Scoones 1998), Ellis (1998) revised the livelihood concept as “the activities, the assets, and the access that jointly determine the living gained by an individual or household”.
An important part of livelihood research has been to determine not only what type of livelihoods that rural people in developing countries have but also the relationship between various livelihood activities and the strategies that local people use when combining and choosing between these activities. Ellis (2000) clearly depicted research around ‘livelihood diversification’ in the 1990’s and noted a key insight from these studies where he concluded that in many rural households in developing countries, farming on its own does not provide sufficient means of livelihood. For this reason, most rural households are found to depend on a diverse portfolio of activities and income sources amongst which crop and livestock production feature alongside many other contributions to family well-being.
Ellis (2000) gives a slightly different emphasis as he argues that livelihood strategies can be divided into natural resource and non-natural resource based activities. Natural resource based activities include collection or gathering, food cultivation, non-food cultivation, livestock keeping and pastoralism and non-farm activities. On the other hand, non-natural resources based activities include rural trade (marketing of farm outputs, inputs and consumer goods), other rural services e.g. vehicle repair, (which is rare in rural settings in Ethiopia), rural manufacture, remittances (urban and international) and other transfers such as pensions deriving from past formal sector employment. Livelihood strategies or activities in all categories represent potential contributions to the survival of rural households.
Based on the asset base, a household must decide the intensity of involvement in each activity. Activities require one or a combination of assets with the purpose of obtaining revenues. For example, agricultural production, or an own business income strategy may use natural, human, financial, or physical capital, while agricultural wage employment, off-farm employment, or migration will use only human capital like education, or social network access and not physical or natural capital (Barret and Reardon, 2000).
Awra Amba community was founded by Zumra Nuru in 1972. He travelled in the region in order to find people sharing his ideas. Finally, he gathered around twenty people who established the peasant community of Awra Amba on around fifty hectares. A disturbing period in terms of their livelihood crisis and moving here and there throughout the country, the community started again in 1993 on its present location and began to expand which laid the base for their current living style (Joumard, 2012).
Joumard (2012) added that Awra Amba is a well-established community with a truly extraordinary life style, especially in terms of equality between men and women, community spirit, absence of religion, honesty, hard work, and democracy.