Contribution of Income Diversification Strategies to Smallholder Farmers’ Livelihoods in the Upper East Region of Ghana

Abstract

Many past studies on remote areas of Sub-Saharan Africa regarded income diversification strategies as insurance against food insecurity and a better quality of life. However, it is not yet clear how regional income diversification factors contribute to smallholder farmers’ decision-making. For this reason, this paper examines the implication of localized income diversification strategies in the Upper East Region of Ghana. We conducted a questionnaire survey among 360 farm households in five rural districts of the Region. We found that smallholder farmers’ income diversification had contributed on average 38% of the total household income. In particular, small-scale mining, livestock rearing, remittance, and petty trade contributed most to their livelihoods. We also used the Simpson’s Diversity Index to quantify the diversity level of the respondents’ income sources. The result showed that the average income diversification strategy of the study region was 0.5 out of 1 with strong district variations in diversification levels. Our correlation analysis revealed that age, educational background, farm experience, and farm size significantly influenced respondents’ decision to choose specific income sources. More experienced farmers tended to rely more on on-farm income source diversification whereas young and inexperienced farmers tended to choose labor-intensive mining, firewood collection, and petty trading activities. Most of their household members had moved to urban areas either permanently or temporarily mainly in search of better social services.