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 non-agricultural 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.
Highlights
Agriculture is the basis of Ethiopian economy
Some variations/differences were observed between those farmers who are participating in income diversification and nonparticipants in terms of demographic, socio-economic and institutional factors (Tables 2 and 3)
The study revealed that the mean age of farmers who engaged in income diversification was less than non-diversified households
Summary
Agriculture is the basis of Ethiopian economy. It contributes over 50 percent of the GDP and 90 percent of raw material requirements of the country's small and mediumsized industries. It is estimated that agriculture provides employment for about 85% of labour force [1, 2]. Ethiopian agriculture is characterized by low productivity. Over the last two decades, it has not been able to produce sufficient food to feed the country's rapidly growing population. A close look at the country's declining agricultural outputs and at the same time, ever increasing population growth begs for a search of alternatives [3]
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