Abstract
Income diversification by farm households has gained the attention of researchers and policy makers due to its commonness especially in developing countries. This study sought to empirically investigate the determinants of off-farm income among smallholder farmers in northern Ghana using a sample of 300 rice farmers. A double-hurdle model was used to determine the factors influencing participation in off-farm work as well as the predictors of actual amounts earned from working outside the farm. The results revealed that gender, farming experience, years of education, and access to credit are the factors determining participation in off-farm work while farming experience, years of education, and geographical location are the determinants of income from off-farm work. The paper concludes that measures to enhance rural income diversification will spur the rural economy and these measures should seek to address the problem of low level of formal education in rural areas.
Highlights
Majority of the world’s poor live in rural areas in developing countries and depend on agriculture and its related activities as a source of livelihood
The results indicated that gender of the farmer had a significant influence on participation in off-farm work at 1% significance level
The study assessed the determinants of off-farm income of smallholder rice farmers in northern Ghana using a double-hurdle model
Summary
Majority of the world’s poor live in rural areas in developing countries and depend on agriculture and its related activities as a source of livelihood. Despite the dependence on agriculture in these countries, including Ghana, the agricultural sector continues to grapple with challenges that impede its growth and contribution to socioeconomic development. These challenges include dwindling budgetary allocation to the agricultural sector, farmers’ inability to acquire and replace farm equipment, inadequate credit sources, among others. Diversification may be a deliberate household strategy or a spontaneous response to crisis as noted by [8] It may serve as a safety net for the poor whereas for the rich it may be a means of accumulation. Income diversification by farm households may be attributed to dwindling and uncertain farm incomes, rising poverty, and emerging opportunities for off-farm work
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