Laos is one of the poorest countries in the world. The majority of households continue to rely on farming to meet their needs.
However the country is also going through an important transition as the market extends into formerly remote rural areas. Drawing
on surveys of nine villages in three districts, the paper elucidates how households are managing the transition from subsistence to
market. Agriculturally resilient communities with considerable potential are contrasted with villages where the scope for increases in
farm output are sharply constrained. The growing role of non-farm activities is highlighted and a distinction drawn between
‘distress’ and ‘progressive’ diversification. The paper argues that diversification is propelled by very different forces and has
markedly different implications in livelihood terms. It is also suggested that while general statements can be made about livelihood
transitions in the country, and the production and reproduction of poverty, at a household level it is often not possible to ‘read-off’
likely livelihood conditions from a mere assessment of resources.