Abstract
In agriculture based economies like Pakistan, farmers often shift from farming to off-farm activities as part of an apparent livelihood transition strategy, despite the fact that most of the workforce depends upon farming. In this paper, we try to uncover insights into how livelihood assets, such as human capital, natural capital, economic capital, and locational characteristics, affect a household’s exit decision from on-farm to off-farm activities as a livelihood transition strategy in rural Pakistan. We analyzed data from 335 farming households from the second largest agricultural producing province in the country, Sindh. Our findings show that more than 19% of households have completely shifted from farming to off-farm activities. Furthermore, we identified that the ‘crop input credit’ is one of the major constraints to farmers converting their previous input-driven small loans into larger loans, where large markups may be imposed if they fail to pay when the harvest is made. The empirical findings from Binary Logistic Regression provide strong evidence for family labor characteristics, particularly for working-age males, working-age females, and working-age children. Surprisingly, the cultivated land size significantly and positively influences farm exit rather than a continuation of farming. Off-farm employment, exogenous shocks, and urbanization also significantly and positively influenced the decision to transition into off-farm work. In contrast, the age of the household head, livestock ownership, and distance to a commercial zone significantly inhibited the decision to exit farming. However, government assistance, including subsidies, strongly encouraged farmers to continue farming. These findings provide new insights into the factors affecting the drivers of both exit and continuation in the farming sector as part of a long-term livelihood transition strategy.
Highlights
Agriculture is a major source of income for the majority of the rural population
The agricultural farms in Pakistan are categorized by their farming status; the farms which cultivate land more than 12.5 acres in size are considered to be large farms, those ≤12.5 acres in size are medium farms, and those ≤2.5 acres in size are small farms (Table 3)
We tested for multicollinearity among the explanatory variables using the Variance Inflation Factor (VIF)
Summary
Agriculture is a major source of income for the majority of the rural population. More than 2.5 billion (out of the 3 billion living rural population) people derive their livelihoods from agriculture all over the world [1]. A large number of poor farmers worldwide have no alternative sources of income to farming [5] This transition, remains a challenge for developing countries, in the South Asia region, where the rural population accounts for 75% of the total population, with 55% of this rural population being agriculturalists [6]. Those living in these regions face a number of challenges, such as food insecurity and poverty, driven in part by exogenous weather shocks, which encourage these workers to seek alternatives to farming and diversify their efforts towards off-farm activities [7,8]. The question is: what factors affect the decisions of farmers to continue or exit farming? This question seems to ignore the millions of marginal people striving to become economically profitable and self-sufficient with their food [5,9,10]
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
