The overall objective of this discussion paper is to advance the knowledge on rural livelihoods in
Stung Treng, Cambodia. In a cluster analysis, five clusters with very different livelihood strategies are
identified based on a sample of 600 rural households. Despite the fact that nearly all households are
engaged in some form of subsistence farming, especially by growing rice, the richer clusters build on
self-employment and higher-skilled wage employment. In contrast the middle income cluster mainly
depends on natural resources (fish and firewood). The poorer two clusters are engaged in lowerskilled
wage employment. The incidence of poverty is widespread but differences between the
clusters are clearly visible. Even the better-off households have consumption poverty headcount
ratios of between 37 to 50% at PPP $1.25. For households from the poorest clusters the poverty
headcount ratio amounts to even 70% for income and 80% for consumption. Especially the
households largely depending on natural resource extraction are characterized by a high incidence of
poverty and high vulnerability. In addition, there are a number of pressures which are expected to
increase poverty problems in the future. Policies aimed at reducing poverty and improving rural
livelihoods need to carefully consider the close linkages between rural livelihoods and natural
resources. But also a diversification away from natural resource extraction into higher-skilled jobs is
found to be a strategy opening up new opportunities to improve livelihood security and raise the
living standards of the poor.