3. RELATIONSHIPS BETWEEN INCOME VOLATILITY AND AGRICULTURAL PRODUCTION Agricultural production income was markedly more volatile than other sources of income across the Smallholder Diaries sample, and overall household income volatility depended on the balance between the two. Expenditures fluctuated considerably as well, due to major household shocks or events, or regular, sig- nificant expenses such as school fees. Despite income diversification outside of agricultural production and smoothing strategies, the agricultural cycle still ex- erted a strong influence over the financial lives of smallholders and most financial hardships were related to agriculture. Smallholder households in the sample knew from past experience what financial problems to anticipate, but they lacked the financial tools to mitigate them or meet their needs. „gricultural production income was marƒedly more olatile than other sources of income in all three samples, and a household’s oerall income olatility depended on the balance between agricultural production and nonagricultural production income (see igure …“)­ Œhe wide range of income sources outside of crop and livestoc production did dampen the effects of the agricultural cycle on sample households, but only to a point­ €t was not elimi- nated entirely­ ªespondents in all three countries struggled the most, with their finances and nutrition, in the months between harvests­ €n the –o—ambiue sample, with very limited crop sales and reliance on other sources of cash income, families experienced less severe fluctuations in overall income, but their paucity of financial tools presented other challenges­ or the sample in aistan, month-to-month agricultural production income was highly volatile (“”¡ percent relative to average income)­ €t swung from lows well below —ero, when there were ma„or expenditures on inputs, to significant highs, when immediately after harvest they sold their output (see igure …”)­ (Since these expenses are related to agriculture income, they are embedded in the green income line­) Œhe involvement of households in other sources of income was relatively more stable, peaing in –arch when farming activity ui- ets down­ €mportantly, though these other sources of income do not generate periods of large negative income (i­e­, deficit periods where expenses related to agricultural production or running a business exceeded revenue), total income volatility (red line) still tracs agricultural production income volatility (see igure …” and £ox ¢)­ †‡penses were smoother than income, but still fluctuated to some e‡tent with income in all three samples ˆt the median, expenditures per month var- ied ¢¡ percent in –o—ambiue, ¡’ percent in Œan—ania, and ”ž percent in ai- stan among Smallholder ‰iaries samples­ £ut this volatility of expenditures | 43