Provides a micro-level foundation for discussions of income and asset allocation within the smallholder sector in Eastern and Southern Africa, and explores the implications of these findings for rural growth and poverty alleviation strategies in the region. Results are drawn from nationally representative households in five countries between 1990 and 2000: Ethiopia, Kenya, Rwanda, Mozambique, and Rwanda. Addresses (1) why geographically based poverty reduction or targeting strategies is likely to miss a significant share of the poor, (2) why current enthusiasm for community driven development approaches will require serious attention to how resources are allocated at local levels, (3) why sustained income growth for the poorest strata of the rural population will depend on agricultural growth in most countries, (4) why agricultural productivity growth is likely to offer the best potential for pulling the poorest and land constrained households out of poverty, (5) why meaningful poverty alleviation strategies in many countries will require fundamental changes to make land more accessible to smallholder farmers.