Nevertheless, diversification may not be so transitory, and it may be associated with success in achieving livelihood security under improving economic conditions as well as livelihood distress in deteriorating conditions.
The analysis indicated that there are often trade-offs between equity, efficiency, and effectiveness involved in achieving livelihood improvements for rural poor and, consequently, the longer-term sustainability of a PES scheme.
Human capital represents the skills, knowledge, ability to labour and good health that together enable people to pursue different livelihood strategies and achieve their livelihood objectives (Ellis 2000).
Pastoralism remains an important livelihood strategy to majority of households in the study area; therefore, to achieve sustainable livelihood strategies, grazing lands should be maintained.
Livelihood strategies are the combination of activities that people choose to undertake in order to achieve their livelihood goals (UNCDF 2005).
Financial capital denotes the financial resources that people use to achieve their livelihood objectives.
It increases their income by helping the poor with the idea of empowering them to achieve sustainable livelihood and out from poverty line.
Nurturing and combining a range of these assets (such as natural, financial, human, social or physical) in innovative ways enables people to achieve positive livelihood outcomes.
Financial capital thus includes savings, credits, remittances and pensions that people use to achieve their livelihood objectives.
Likewise, Degefa (2005) reported that people that pursue diversified income sources through production of improved livestock varieties such as cattle, camel, goats and sheep are more likely to achieve sustainable livelihoods.
