The impact of policy measures on livelihood diversification of smallholders: empirical evidence from the Tibetan Plateau, China

Livelihood diversification is a livelihood strategy commonly used by smallholders to cope with climate risk. However, despite the implementation of policy measures, there remains a research gap regarding whether smallholders will continue to adopt livelihood diversification strategies in response to climate risk. To fill this gap, this study used 1,193 smallholder questionnaires collected from the Hehuang Valley (HV) and Pumqu River Basin (PRB) on the Tibetan Plateau (TP), employing the Tobit model to examine the impact of policy measures on smallholder livelihood diversification. The results show that policy measures have had a negative impact on smallholder livelihood diversification and that government-constructed irrigation facilities and low-interest loans can effectively help smallholders cope with climate risk while reducing livelihood activity diversification, a conclusion that remains robust across different income groups. Furthermore, borrowing from relatives positively impacts smallholder livelihood diversification, whereas per capita arable land and altitude exert negative influences. In the HV, vehicles and leadership skills enhance diversification, whereas in the PRB, arable land per capita and distance to markets foster diversification, whereas distance to roads hampers diversification. The findings of this study highlight the importance of understanding the interactions between policy measures and smallholder adaptation strategies and providing valuable insights for policymakers in designing targeted interventions that promote rural development and support smallholders in adapting to climate change.