Determinants of Participation in Non-farm Activities among Rural Farm Households in Ambo District of West Shoa Zone, Oromia Region, Ethiopia

Zewdu Adefris

doi:10.7176/jep/12-4-04

Abstract

This study examined the determinants of non-farm economic activities participation decisions among rural farm households in Ambo district of West Shoa zone of Oromia region, Ethiopia. The research design adopted in this study was cross-sectional field survey from which a total of 300 rural farm households drawn. Descriptive statistics and logistic regression model were applied to investigate the effect of various factors on the decision to participate in non-farm economic activities. The logistic results show that gender, marital status of household head, dependency ratio, skill, access to credit and distance to the nearest market were found to be the key factors that significantly influenced rural farming household’s decisions to participate in non-farm activities. Women and married headed rural farm households were more likely to participate in non-farm activities. Transferable skill and access to credit also have positive influence on rural farm household decision to participate in non-farm activities. High dependency ratio and a long distance from the house to nearest market have strong negative effect on the decision to participate in remunerative non-farm activities. According to the descriptive result, the major non-farm economic activities that help rural households in the study area comprise selling of foods and drinks, retail shop, selling of wood and charcoal, trade in grain general, weaving, boutique, and craft work. The study has also identified factors that lead households to participate in non-farm activities. They include low income from farming activities, land inadequacy, soil fertility or productivity, growing family size, and increased opportunities. Thus, while this study is not advocating for non-farm economic activities as a substitute to farming, non-farm work could be a reliable complement to farming activities. Policies that aim to increase the non-farm work participation decisions of family members should take into consideration the difference in responses to the various factors that affect the non-farm activities decisions of rural farm households. Keywords : Determinants, Participation, Non-farm activities, Rural Households, Logit Model DOI: 10.7176/JEP/12-4-04 Publication date: February 28 th 2021

Highlights

In developing countries, non-farm activities play a more and more important role in sustainable development and poverty reduction in rural areas
This study was set out to analyze the determinants of participation in remunerative non-farm activities among rural farm households depending on the sample of 300 households drawn from five rural kebeles in Ambo district of west Shoa Zone, Oromia region, Ethiopia
The analysis demonstrated that the major non-farm occupational categories in which rural households engaged were selling of foods and drinks, retail shop, selling of wood and charcoal, trade in grain general, weaving, boutique, and craft work

Summary

Introduction

Non-farm activities play a more and more important role in sustainable development and poverty reduction in rural areas. The income obtained from non-farm activities can significantly increase total household income and enhance the investment capacity in farm activities. It can mitigate income fluctuations and enable the adoption of some more profitable but “risky” agricultural technologies, which favour the transformation of traditional agriculture to modern agriculture. Non-farm income is often a source of savings, which plays an important role in poverty reduction. The households that diversify their income by participating in non-farm activities are more capable of overcoming negative shocks

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Conclusion