MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT Economics Directorate Research Paper Series Republic of Mozambique DETERMINANTS OF RURAL INCOME, POVERTY, AND PERCEIVED WELL-BEING IN MOZAMBIQUE

The Directorate of Economics of the Ministry of Agriculture and Rural Development maintains two publication series for research on food security and agricultural policy issues. Publications under the Flash series are short (3-4 pages), carefully focused reports designated to provide timely research results on issues of great interest. Publications under the Research Paper series are designed to provide longer, more in depth treatment of food security issues. The preparation of Flash reports and Research Reports, and their discussion with those who design and influence programs and policies in Mozambique, is an important step in the Directorates's overall analyses and planning mission. Comments and suggestion from interested users on reports under each of these series help to identify additional questions for consideration in later data analyses and report writing, and in the design of further research activities. Users of these reports are encouraged to submit comments and inform us of ongoing information and analysis needs. Carlos Mucavele National Director Directorate of Economics Ministry of Agriculture and Rural Development iii ACKNOWLEDGEMENTS The Directorate of Economics is undertaking collaborative research on food security with Michigan State University's Department of Agricultural Economics. We wish to acknowledge the financial and substantive support of the Ministry of Agriculture and Rural Development of Mozambique and the United States Agency for International Development (USAID) in Maputo to complete food security research in Mozambique. Research support from the Bureau of Economic Growth, Agriculture and Trade/Agriculture program of USAID/Washington also made it possible for Michigan State University researchers to contribute to this research. This report does not reflect the official views or policy positions of the Government of the Republic of Mozambique nor of USAID. The purpose of this research paper is to help design more effective strategies for accelerating rural economic growth in Mozambique by understanding the sources and determinants of rural household income. The analysis presented is directly relevant to the forthcoming revision of the national poverty reduction strategy (PARPA) and the second phase of the national agricultural development program (Proagri). The analysis is based on a Ministry of Agriculture and Rural Development (MADER) survey of a nationally representative sample of rural households conducted in 2002 (called the Trabalho de Inquerito Agrícola, commonly known as " TIA "). The survey was undertaken by the Department of Statistics (DEST) in the MADER's Economics Directorate (DE) and covered the agricultural year 2001-2002. The TIA complements the Inquerito do Agregado Familiar …