Rural non-farm economy and livelihood diversification strategies: evidence from Bangladesh

Abstract

Rural households in Bangladesh are now diversifying from full-time agriculture to part-time agriculture where they are engaging in different non-farm activities along with farming. This study intends to identify the determinants to diversify in each livelihood strategy individually and their effects on poverty. A total sample of 153 households from three districts of Bangladesh was selected through purposive sampling technique. Multinomial logistic regression and multidimensional poverty index were used for the likelihood of adopting one of the five probable activity portfolios and their poverty measurement, respectively. The results reveal that age and farming experience of the household head, and total land cultivated by a household play a significant negative role in diversifying into any activities in non-farm sector. Higher education boosts the possibility to participate in wage-employment based strategy. In addition to active male labor, better infrastructural facilities enhance the probability of engaging in wage and self-employment based non-farm activities. Moreover, access to non-farm activities especially self-employment and international migration are determined by credit receptiveness. Generally, shifting from full-time agriculture to partly non-farm sector is more welfare generating strategies (by reducing poverty) for rural households in Bangladesh. Therefore, policy should be directed to facilitate strategy-based rural non-farm activities and enhance balanced economic growth of the country.