Rural Farm Households’ Income Diversification: The Case of Wolaita Zone, Southern Ethiopia

Abstract

Abstract:Despite the economic dominance of agriculture in the study area, farm households widely practice diverse income generating activities as livelihood strategies to overcome diverse challenges and risks. The existing capacity of agriculture to attain food and livelihood security is tremendously declining from time to time. The main aim of this study was to identify the determinants of farmers' participation in income diversification in the study area. The study involved primary data which were collected from randomly selected 300 households in four districts of the zone. For selection of study units probability proportional to the size was applied and respondents were selected through systematic sampling technique. In addition, key informant interview and focus group discussion were used to supplement the survey with qualitative information. Secondary data were also collected from various relevant sources. Descriptive statistics were applied to characterize the sample households' social, economic, demographic and institutional factors. The findings of the study indicates that rural households in the study area practice diversified income sources, in that about 57.7% of the households combine agriculture with other activities (non/off-farm). Some farmers were pursuing non-farm and off-farm activities as the primary income sources rather than agriculture. Considering the wealth status, the poor households derive almost half (50%) of their income from nonagricultural activities whereas the latter accounts for only 6.4% of the income of the better-off households'. Binary logit model was applied to investigate factors influencing the households' participation in income diversification. In this regard, out of total explanatory variables included in the model, 8 were significant. The results confirm that factors such as sex, farm size, livestock ownership, oxen ownership, education, leadership, annual cash income and market distance were key determinants of farmers' participation in income diversification. Further, the study identifies income diversification as a cumulative effects of several factors, and therefore urges policy makers to give due attention to them with a view to overcoming the challenging bottlenecks.

Determinants and challenges of rural livelihood diversification in Ethiopia: Qualitative review

“…In Ethiopia, most of the studies conducted identify three rural livelihood diversification strategies: on farm, nonfarm and off farm (Mengistie and Kidane, 2016;Debele and Desta, 2016;Gecho, 2017;Kassie et al, 2017;Teklu et al, 2017;Yona and Mathewos, 2017;Ofolsha and Mansingh, 2015;Dadi, 2016;Asfir, 2016;Addisu, 2017;Yizengaw et al, 2015). Authors mention crop production and livestock rearing as major activities of on farm livelihood activities.…”

“…Off-farm activities were activities, which were done to someone else"s farm such as wage labor, natural resource based activities like firewood/grass and charcoal selling (Yizengaw et al, 2015;Ofolsha and Mansingh, 2015;Asfir, 2016;Dadi, 2016;Yona and Mathewos, 2017;Gecho, 2017). Nevertheless, farmers move to other area to work as wage laborer due to fear of negative attitude of the community (Yona and Mathewos, 2017).…”

“…Non-farm activities include petty trade, handicraft (weaving, spinning, carpentry, house mudding, poet making) (Yizengaw et al, 2015;Ofolsha and Mansingh, 2015;Asfir, 2016;Dadi, 2016;Yona and Mathewos, 2017;Gecho, 2017) and remittance (Yizengaw et al, 2015;Dadi, 2016;Yona and Mathewos, 2017;Gecho, 2017). Selling of local drinks (Tella and Areke) (Yizengaw et al, 2015;Dadi, 2016;Ofolsha and Mansingh, 2015;Gecho, 2017) and rent of pack animal like donkey for transportation (Gecho, 2017;Yona and Mathewos, 2017) were nonfarm activities. Nonfarm livelihood activities in which farmers engage were renting (hiring) of oxen and land (Yona and Mathewos, 2017) and wage labor (Ofolsha and Mansingh, 2015;Dadi, 2016;Asfir, 2016).…”

“…Farmland size had negative impact on livelihood diversification strategies (Tamerat, 2016;Ofolsha and Mansingh, 2015;Idris, 2014;Degefa, 2005;Gecho, 2017;Anshiso and Shiferaw, 2016;Aababbo and Sawore, 2016;Mentamo and Geda, 2016;Yizengaw et al, 2015). Hence, the probability of engaging in various livelihood strategies decreases when land holding size of household increases because farmers with larger farm land size were encouraged to involve more on farming activities (Tamerat, 2016;Gecho, 2017;Aababbo and Sawore, 2016). In addition, the farm households having more land size were forced to follow agricultural extensification rather than diversification (Anshiso and Shiferaw, 2016;Yizengaw et al, 2015).…”

“…This implies that female farmers were less likely to diversify livelihood than male-headed households. The authors explained those female head households had more responsibility in the house and traveling for searching nonfarm and off activity from urban area was culturally unacceptable (Demissie and Legesse, 2013;Debele and Desta, 2016;Gecho, 2017;Aababbo and Sawore, 2016). Opposing this result, Yizengaw et al (2015) revealed that sex of sample respondents had negatively affected farmer"s livelihood diversification strategies.…”