Abstract
The study was carried out to investigate the patterns and extent of livelihood diversification in rural Bangladesh. It also identified the major factors affecting extent of livelihood diversification. The study drew a random sample of 500 rural farm households in Bangladesh through a multi-stage sampling technique. The primary data were collected using semi-structured questionnaires, and analyzed using descriptive statistics and statistical techniques. The results showed that remittance contributed the highest to the household income followed by petty business and rice farming. The estimated values of Simpson Index of Diversification (SID) showed that majority of the rural households had “medium” and “high” level diversified livelihood activities. Tobit regression analysis found that gender of the household head, household size and amount of credit had positive and significant effects; and number of migrant household member, dependency ratio, household assets, education of the household head and amount of savings had negative but significant effects on the extent of livelihood diversification. The small and medium landholding households were more likely to diversify their livelihoods compared to the functionally landless and large landholding households. The study recommended that non-farm employment opportunities should be expanded to combat poor households' vulnerability to shocks and income fluctuations. Functionally landless households should be given more attention to increase and diversify their incomes.SAARC J. Agri., 16(1): 7-21 (2018)
Highlights
The economy of Bangladesh is typically agriculture driven
The results showed that man headed household had a positive and significant effect on the extent of livelihood diversification among the rural households
Majority of the rural households in Bangladesh have diversified their livelihoods from agriculture to different activities
Summary
The economy of Bangladesh is typically agriculture driven. More than 45% of the country’s population live in rural areas (World Bank, 2016). Agriculture has remained the main source of livelihoods of rural people since many years. In recent years rural livelihoods are rapidly transforming. The importance of agriculture in rural livelihoods is declining, while the importance of the non-agricultural sources, such as business, services, remittance and non-farm labourer is increasing (Hossain and Bayes, 2010). The contribution of agriculture to rural household income dropped from 60% in 1988 to 45% in 2013. The impact of “Risk” and “Seasonality” in agriculture triggered the diversification process in rural occupations and income. Non-farm occupations reduce the risk by combining activities that have different risk profiles, while they can ameliorate labor and consumption smoothing problems associated with seasonality (Ellis, 2005)
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