Why Do Livelihood Programmes Fail? The Importance of Market Linkages and Market Orientation

Livelihood programmes are increasingly adopting market-based solutions to achieve their goal of sustainable income generation for beneficiaries. However, such programmes are often production- or sales-oriented and lack the necessary market orientation required to compete in consumer markets. As a result, they fail to achieve the intended success. In the process, they also adversely affect the economic well-being of their targeted beneficiaries. We studied livelihood generation interventions in the Ladakh region in India in this chapter. This study finds that the livelihood interventions failed because they largely neglected market- and marketing-related considerations. The excessive focus on the production-related inputs in the programme design led to the building up of the finished goods inventory with the SHGs, which they could not liquidate in the market despite the high demand for these valuable products in urban markets. The chapter proposes that livelihood generation programmes should be designed in a market-oriented manner, and those market considerations must precede the production considerations. The study shows the importance of market orientation in the design of market-based livelihood programmes to enhance their effectiveness for greater social impact. The study integrates market separations and market orientation into a common framework to identify four scenarios faced by livelihoods programmes and lists their implications on programme sustainability