Assessing Food Security in Rural Bangladesh: The Role of a Nonfarm Economy

The purpose of this study is to determine the impact of off-farm work on food security in rural Bangladesh. We use rural household-level data and a nonparametric propensity score matching (PSM) estimator. Matching estimators are used in observational data to address the potential selection biases caused by nonrandom allocation of the treatment. Monthly food-consumption data and household income and expenditure surveys from rural Bangladesh for 2013–2014 are used in this chapter. We found that rural Bangladeshi households participating in nonfarm income-generating activities, especially in higher return nonfarm employment, enjoy higher levels of per-capita food expenditures and diet diversity – two of the measures of food security. In particular, we find that rural households increased diet diversity in cereals, fruits and vegetables, and meats. Finally, our estimates reveal that rural households participating in off-farm work increased per-capita food consumption by about Taka 1,576, on average, and increased per-capita expenditures on milk and milk products (Taka 212), and fruits and vegetables (Taka 235) significantly. Policy makers should design and implement policies that create off-farm livelihood activities. These nonfarm activities would help smallholder farm families to diversify, to supplement their income, and to continue their agricultural operations as well as increase food security.