nonnegative driver/factor for exclusion/marginalization processes.

Although AKST has often had positive benefits on peoples' livelihoods, there have also been negative impacts. Exclusion and marginalization processes such as poverty, hunger or rural migration, have often occurred because of differences in people's capacity to make use of knowledge and technology and to access resources (Mazoyer and Roudart, 1997). These differences are usually the result of discriminatory or exclusionary practices due to gender, class, age or other social variables. The implementation of new technology has implications for social differentiation, sometimes excluding farmers and their families from production and marketing.

     Target-oriented programs have responded to this problem by building in awareness of access issues relating to AKST into project design; by monitoring poverty related indicators throughout implementation and through accompanying institutional arrangements.

Impacts of AKST have been more widely evident where they respond to, or are consistent with, the priority that the poor place on managing risk and vulnerability.

Established cultural traditions define the values and influence practices of small-scale communities. These typically emphasize low-input and risk-averse strategies which are at variance with the maximized production orientation of modern AKST. Small-scale producers make rational decisions to optimize overall benefits from limited resources (Ørskov and Viglizzo, 1994). Thus, risk management, reduction of dependence on agricultural inputs, avoidance of long-term depletion of productive potential and more careful control of environmental externalities are important to them (Conway, 1997). Local knowledge and innovation respond to these priorities; an important assessment criterion of AKST is the extent to which it has helped to reduce both shortterm local risk and vulnerability to external factors (e.g., economic changes, climate variability etc). Farmers' own assessment of risk is fundamental in influencing patterns of change in farming practices. High levels of risk are likely to negatively affect adoption (Meinzen-Dick et al., 2004). Perceptions of risk and the priorities of men and women vary in relation to their asset base; especially land and labor.

The risks and costs associated with agriculture and rural development have recently been addressed by innovative microfinance initiatives.

Based on successful experiences in various developing countries, a model, termed agricultural microfinance, is emergchapter

ing (CGAP, 2005). The model combines the most promising features of traditional microfinance, traditional agricultural finance, leasing, insurance, and contracts with processors, traders, and agribusinesses. The original features of the model include innovative savings mechanisms, highly diversified portfolio risk, and loan terms and conditions that are adjusted to accommodate cyclical cash flows and bulky investments. Perhaps two of the most innovative products contributing towards greater rural development are those related to savings and remittances (Nagarajan and Meyer, 2005). Deposits are made to mobile deposit collectors at the savers' doorstep, so reducing the transaction costs of rural farmers and households. Electronic innovations, such as the use of simple mobile phones, ATMs and remittance services, may also help drive down the costs of handling many small transactions in dispersed rural areas, and bring positive benefits to rural communities reliant on migrant labor. Successful remittance services are designed with clients to provide appropriate products and choose strategic partners at both ends of the remittance flow. Despite recent innovations, reaching the remote and vulnerable rural poor still remains a major challenge.

3.2.3.2.5 Livelihood strategies-diversification, specialization and migration

The ways in which rural people combine and use their assets to make a living varies considerably between regions, individuals, households and different social groups. Choice of livelihood strategies is affected by economic, social and cultural considerations (e.g., what is appropriate according to gender, age, status). The range of livelihood choices is generally more restricted for the "asset" poor.

Opportunities for diversification of rural income help to reduce vulnerability of the poor.

Where agriculture and natural resources are the basis of livelihoods, small-scale farmers often spread their risks by diversification, as for example in mixed cropping systems (Dixon et al., 2001). Diversification affects agricultural productivity in different ways, in some cases positively (Ellis and Mdoe, 2003). Diversification is a response to an environment which lacks the conditions needed to reap the benefits of agricultural specialization: enterprises with efficient market integration, input and credit supply systems, knowledge access, relatively stable commodity pricing structures and supportive policies (Townsend, 1999). However, diversification is at variance with the emphasis of much agricultural policy in developing countries, which promotes more specialization in the production of high value products for national, regional and export markets. The larger, but lower value, markets for staple food crops are perceived as less risky than higher value markets, and less dependent on technical support services and inputs. Diversification and risk reduction strategies for rural households can include non-farm income; however, this is more difficult for the extreme poor, including female-headed households (Block and Webb, 2001). While there have been advances in rural non-