Change in Income

This indicator tracks the change in income of smallholders collected at individual or household level. If you want to track the change in income at (1) firm level or (2) at the level of individual employees and self-employed individuals, check the information below under important comments.

Smallholder income or smallholders’ household income (gross or net farm revenue) is defined as the overall revenue of an individual smallholder or the income of their household.

Smallholder income or smallholders’ household income may be measured through the following proxies:

▪ Production-based estimates of income, such as farm production to calculate the value of sales of product (production x price of unit being sold), either for the main crop only, or also for other crop revenue sales.

 ▪ Minus net smallholder or household income costs, including costs for hired labour, and inputs costs like for focus crop production, other crop and livestock production costs and business costs for businesses run by household members.

▪ To collect more accurate data, other earnings may be added (from activities such as off-farm employment, services provided such as training, nurseries, land and equipment rental, etc.), business revenue and gifts and remittances.

Issues for consideration:

It is recommended to use net crop income whenever possible because profits depend on production costs. Net crop income is defined as production-related revenues minus expenditures (FAO 2013).

In some supply chains, improvements in crop income do not necessarily lead to improvements in total household income or food security

What activities should the indicator be used for?

This indicator should be used for programs and projects that looks at increasing the smallholders´household income by e.g. income generating activities of an individual smallholder, improved production systems to sell surplus at the market.

Relevant disaggregation depends on the PSD actor’s portfolio.

By gender: female smallholders and/or female-led households. Disaggregation of the differences in income level and/or income change between male and female smallholders or male- and female-led households in comparison with the baseline.

Issues for consideration:

While disaggregating by gender can help understand gender issues related to interventions or investments, the data should be interpreted with care, as different explanatory factors may be at play. Challenges faced by female smallholders or femaleled smallholder households may be quite different from male smallholders and maleled smallholder households, for example in terms of time available to spend on the farm due to household and child care roles. Other responsibilities may influence the extent to which female smallholders’ income changes.

The DCED handbook on methodological guidance differentiates (p.7. following) between the following three approaches for the indicator “change in income”:

(1) change in income at firm level

(2) change in income at the level of individual employees and self-employed individuals ▪ (3) change in income of individual smallholders or their households

Please check the handbook if you want to approach level 1 or level 2.