Non-farm Income Diversification Research Articles

Determinants’ of Farmers´ Perception of Climate Variability and Change and Its Effect on Non-Farm Income Diversification

Determinants’ of Farmers´ Perception of Climate Variability and Change and Its Effect on Non-Farm Income Diversification

Exploring the contributions of non-farm income diversification for improving soil and water conservation practices and reducing rural poverty in rain-fed areas of Punjab, Pakistan

Attaining agricultural sustainability and eliminating poverty are the key challenges of rural areas. Non-farm income diversification is a vital livelihood strategy that endorses sustainable agriculture and alleviates poverty. Considering the land degradation and poor economic situation of Pakistan's rain-fed areas, the current research examined the potential effects of non-farm income diversification on household poverty and adopting soil and water conservation (SWC) technologies. A survey of 441 farmers was conducted in rain-fed areas of Punjab, Pakistan, and for econometric analysis, the propensity score matching (PSM) technique was employed to explore the objectives. The results signified that diversified farmers were more likely to adopt SWC practices and were less vulnerable to poverty. The findings suggest that farmer-based organizations and agricultural extension activities must be strengthened as they support non-farm income diversification, thus facilitating investment in soil and water conservation technologies and reducing poverty.

Determinants of non-farm income diversification strategies and decisions of Bangladesh farm households

Despite being mostly dependent on agriculture, farm households in Bangladesh frequently engage in non-farm income diversification activities in order to maintain or increase their standard of living. The aim of this study is to examine the factors that influence farm households’ strategies and decisions regarding the accumulation of non-farm income.Multi-stage sampling was used to collect primary data from 139 farm households in the Rajshahi district in order to meet the study aim. Descriptive and econometric analyses were both used for data analysis.The descriptive data showed that around 80% of the respondents earned income outside of agriculture. The findings of the binary logit model demonstrate that family size, years of schooling of the household head, and lack of participation in local organizations have a substantial impact on respondents’ decisions on diversification. The multinomial logit model examined how family size, local organization membership, and farm size affected factor diversification outside of farming. Furthermore, the household head’s years of schooling, participation in local organizations, and distance to the closest product market were the main factors influencing their diversification strategy.Policy makers should provide incentives and training that further stimulates non-farm income generating activities of farm households to facilitate the continuing transition of the Bangladesh economy away from its primary reliance on agriculture to generate national income.

A Quest for Livelihood Sustainability? Patterns, Motives and Determinants of Non-Farm Income Diversification among Agricultural Households in Punjab, Pakistan

Many farmers worldwide resort to choosing various income-earning options for diversifying their income sources as a means of risk-avoidance, social protection, and, above all, to finance agricultural operations. Non-farm income generation among farm families has become an imperative part of livelihood earning strategies in recent years amid fast-evolving climatic and sociodemographic changes. In this regard, this study seeks to identify the patterns and socioeconomic factors responsible for the uptake of various non-farm income diversification sources among agricultural households in southern Punjab, Pakistan. For this purpose, a total of 290 farm households were sampled using a random sampling technique to collect relevant data through structured questionnaires. Results show that approximately 79% of the surveyed farmers were involved in non-farm income generation activities, whereas, the income from these sources accounts for about 15% of total household income. The majority of the respondents offered labour for off-farm work followed by self-employment ventures. The major reason to pursue non-farm work includes low income from agriculture, mitigating risks associated with farming, and acquiring funds to finance farming operations, along with the desire to increase family income. A range of socioeconomic and infrastructure-related variables are associated with the decision to participate in specific off-farm activity, such as age, education, family size, farm income, dependency burden, farming experience, and distance to the main city. Results imply the provision of technical support to increase livelihood from farming operations to ensure food security and curb rural-urban migration. However, vocational training can enhance the rural inhabitants’ skillset to diversify on the farm through agribusiness development within rural areas, enabling them to employ local people instead of populating urban centres.

Determinants’ of Farmers´ Perception of Climate Variability and Change and Its Effect on Non-Farm Income Diversification

Climate variability and change is now a global phenomenon with growth, poverty, food security, and stability implications. The farmers’ Knowledge and awareness about climatic variability and change are important for income diversification planning. The main objective of this study was to assess the determinants of farmers’ perception of climate variability and change and its effect on income diversification. A multi-stage sampling procedure used to select the sample respondents and the total sample size of the study was 253 households. Descriptive statistics, logit, and probit regression model were used as data analysis techniques. The descriptive statistics analysis results indicated that about 58.10% of farmers believe that temperature in the district had become warmer and also over 70% of respondents were recognized that rainfall volume, pattern, and distribution has changed and 56% of respondents believed heat intensity is increasing. The logit analyses proved that training participation of the household head, gender, age of household head, level of formal education, local institutional fairness, distance to the nearest market, accesses to extension services, local agroecology and existence of legal obstacle from government were found to have significant influence on the probability of farmers to perceive climate variability change. And the probit analyses identified that perception of farmers on climate variability and change was found to have a positive significant influence on the probability of diversifying their income. It is recommended that local institutions should work with accountably and responsibly and the government should review and improve his rules and regulations which are not comfortable for farmers’ livelihood activity. Keywords: Climate Change and Variability, farmersˈ perception non-farm income diversification DOI: 10.7176/JESD/12-11-04 Publication date: June 30 th 2021

Rural non-farm income diversification: implications on smallholder farmers' welfare and agricultural technology adoption in Ghana

This study explored the potential impact of rural non-farm income diversification on households' welfare and adoption of Zai-technology (a proxy for agricultural technology adoption) using primary data collected from agricultural households in the Upper East region of Ghana. We used Propensity Score Matching (PSM) and Inverse-Probability-weighted Regression Adjustment (IPWRA) techniques to estimate welfare and Zai-technology impacts of non-farm income diversification. After controlling for differences in covariates, the results show that non-farm income diversification increases the likelihood of Zai-technology adoption and contributes to significant household welfare gains. We therefore suggest that the activities of agricultural extension services and farmer-based organizations (FBOs) be enhanced as they facilitate the diversification of non-farm incomes, thereby increasing investment in productivity-enhancing technologies (Zai) and household welfare.

The composition and determinants of rural non-farm income diversification in Nigeria

Farming has been considered as main source of income for rural households in Nigeria, despite their involvement in other income generating activities. Focusing on income derivable from farming alone may be partially responsible for the ineffective poverty reduction strategies in Nigeria. Using the National Living Standard Survey data collected by the National Bureau of Statistics, this paper investigated the composition and determinants of non-farm incomes of rural households in Nigeria. The results show that the share of farm, non-farm wage (NFW)- and self-employment (NFS) incomes in total household incomes were 24.3%, 43.0% and 23.7% respectively. Households whose heads are male (0.647), had formal education (0.522), increased the likelihood of households’ participation in NFW activities, while access to credit (-0.307) and having larger farm size (-0.221) decreased it. Access to credit (0.379); community participation (0.103); larger family size (0.193) and possession of capital assets (0.069) increased the likelihood of participation in NFS-employment activities, while having larger farm size (-0.211) decreased it. The study concludes that policy targeting poverty reduction should focus on providing enabling environment for poor households’ access to non-farm activities in the study area.

Farm and non-farm income diversification activities among rural households in southeast, Nigeria

The study assessed farm and non-farm income diversification activities among rural households in Southeast, Nigeria. Purposive and multi-stage random sampling techniques were used to collection data from three hundred and sixty (360) rural households using structured interview schedule. Means, percentage and frequency count were used to analyse the objectives of the study. The result showed that 82.5 % of rural households diversified their income sources into other non-farm activities as against 17.5% that depended solely to farm activities. Further analysis indicated that 64.4 % of the rural households engaged in crop production, 46.9 % practiced livestock production, 5% were into collection of forestry products, 13.1 % engaged in farm products processing while 23.3 % engaged in storage and marketing of agricultural products. However, the various non-farm activities diversified into by the households were: petty trading (53.53 %), storage and marketing of agricultural commodities (31.31 %), sale of landed property (15.82 %), agricultural wage labour (16.84 %) and hire purchase (9.09 %). Others included rental services (19.52 %), transportation (example taxis, motorcycle and tri-cycle business) (21.21 %), craftsmanship (13.46 %) and civil/public service jobs (28.28 %). The study recommended that government should improve rural infrastructures like good road network, electrification, potable water, telecommunication service, and affordable healthcare system since they are important for enhancing socio-economic activities. It is also recommended that government should initiate policy for reducing risk and uncertainties inherent in agricultural activities in order to encourage farmers to remain in the business of farming.Keywords: Diversification, economic activities, rural households, livelihood, South East Nigeria

Nonfarm Activities and Household Production Choices in Smallholder Agriculture in Vietnam

Nonfarm Activities and Household Production Choices in Smallholder Agriculture in Vietnam

Agroforestry and farm income diversification: synergy or trade-off? The case of Ethiopia

BackgroundThis study analysed the relationship between agroforestry and non-farm income diversification activities. A survey was conducted on 136 farm households by employing both structured and semi-structured questionnaires in four farm villages of Northwest Ethiopia. The bivariate probit model was employed to estimate the simultaneous adoption of agroforestry and non-farm diversification activities. In addition, a focus group discussion was administered by choosing participants composed of village leaders, male and female farm household heads, young farmers, and key informants.ResultsThe result indicated that agroforestry adoption and non-farm income generating activity participation incidences jointly determined significantly and positively by the comparative economic return of adopting the joint activities, moderately secured land property right perceptions, non-farm income and agroforestry adoption experience. On the other hand, as the household is distant from the proximate market and the main road, and a number of oxen the farm household owns have the significantly negative impact on the likelihood of simultaneous adoption likelihood by the farm household on both activities in Northwest Ethiopia. In the focus group discussion, the agricultural extension and natural resource conservation experts and the participants said that better economic return of agroforestry production compared to food crop farming, less labour intensity of agroforestry than food crop production, and better land management system for agroforestry than food crop production were found to determine positively the agroforestry and non-farm joint participation decisions.ConclusionThe findings indicated that substantial parts of the study area have been converted from cereal crop production system to agroforestry land use which enables the community to diversify their income. The farm household participated in agroforestry production not only just from its expected comparative economic return but also from the synergy effects it has with the non-farm income generating activities. Therefore, policy interventions that simultaneously motivate agroforestry and non-farm income diversification activities could enhance the sustainability of land management and maximise the farm households’ economic return from these joint practices. Accessing farm technologies like fertiliser and improved seed, and institutions such as rural markets and infrastructures for farm households will be helpful to economically empower them in a sustainable way.

Farm and Non-farm Income Diversification in Selected Areas of Sunamganj District of Bangladesh

Farm and Non-farm Income Diversification in Selected Areas of Sunamganj District of Bangladesh

Analyzing the Determinants of Non-farm Income Diversification of Farm Households in Peshawar District of Pakistan

Abstract The agricultural sector in Pakistan is not well-established to provide full employment opportunities and sufficient income for needed living standard to the rural population. Stagnant agricultural productivity and low returns in farming have led rural residents to look for alternative livelihoods, especially non-farm employment. With this background, the present study is an endeavor to empirically determine the factors of non-farm income diversification of rural farm households in Peshawar district of Pakistan. The study was undertaken in four villages and data was amassed from 196 small farming households by using the multi-stage sampling technique. The data were analyzed using the descriptive statistical measures, the mean of income shares approach and the ordinary least squares regression analysis. The results indicate that in all the selected villages, the pattern of non-farm employment was more or less the same; however, the income from non-farm employment activities had an important contribution towards incrementing the absolute income of farm households. Non-farm income diversification is hence crucial for sustaining livelihoods and an integral dimension for invigorating rural economies. Therefore, the study recommends the promotion of non-farm employment as a good strategy for supplementing the income of small farmers without shifting attention from agriculture.

Linkage Effects of Rural Non-Farm Income Diversification on Poverty Reduction among Farm Households in Southeast, Nigeria

Linkage Effects of Rural Non-Farm Income Diversification on Poverty Reduction among Farm Households in Southeast, Nigeria

How has microcredit supported agriculture? Evidence using panel data from Bangladesh

AbstractImproving agricultural productivity has received a greater attention in recent years amid concerns about rising food insecurity, population pressures, and climate change. Many believe that better access to institutional credit, spanning microcredit as well as commercial and agricultural banks, can help rural households smooth risks, and access inputs and other technology to modernize agriculture and improve farm/nonfarm linkages. We use recently augmented household panel data spanning over 20 years in Bangladesh to examine the effects of rural credit expansion (both microcredit and formal bank channels) on outcomes for agricultural households. We find that microcredit has benefited households with lower landownings, raising agricultural income from activities such as livestock rearing that require less land, as well as nonfarm income diversification for all households, but with the strongest effect for landless or near‐landless households. We do not find effects of microcredit on crop income, but do, however, find that reported supply‐side credit constraints significantly lower crop income. Borrowing by both men and women has contributed to nonfarm income growth for marginal farmers, but only men's borrowing has contributed to nonfarm income growth among higher landowning groups.

Is non-farm income diversification a feasible option for small-scale farmers? An assessment using a composite fuzzy indicator

European politicians encourage the income diversification of rural households through various measures. Although a knowledge of farm households’ potential for non-farm income diversification seems important for finely targeting such policy measures, thus far no attempt has been made to summarise the various determinants of income diversification in a single figure. This contribution aims to close this gap. A composite fuzzy indicator that measures farm households’ potential for non-farm income diversification is developed and applied to 626 small-scale farm households in Bulgaria, Hungary, Poland, Romania and Slovenia. The indicator summarises the incentives and capacities for non-farm income diversification on the individual household member level and on the household and regional levels in a single measure using fuzzy logic methodology. The composite fuzzy indicator performs well and the results for the single small-scale farm households can easily be retraced. The indicator not only singles out the households that have the potential for non-farm income diversification but also shows the reasons for this. The indicator shows that most of the 626 households studied have a high potential for non-farm income diversification and that all are pushed toward diversification by the small size of their farms. The composite fuzzy indicator also identifies farm households that are trapped in a desperate situation due to unfavourable chances of finding a job in the labour market and long distances to the nearest large urban centre. Decision makers could utilise the composite fuzzy indicator to finely target diversification measures to the multifaceted conditions of farm households.

The influence of market barriers and farm income risk on non-farm income diversification

Empirical evidence shows that non-farm income diversification is associated with higher welfare among farm households. However, most studies have ignored market barriers and farm income risk in explaining income diversification behaviour. This study develops a theoretical framework that includes both market barriers and farm income risk, in addition to other factors, in explaining income diversification behaviour. The theoretical framework is used to empirically test the hypotheses that: market barriers reduce the intensity of non-farm income diversification; and farm income risk increases the intensity of non-farm income diversification. The results confirm the hypotheses, suggesting that market barriers and farm income risk are key factors in explaining income diversification behaviour of farm households. Future studies should therefore, consider the two factors in the analysis of income diversification behaviour. Key words: Market barriers, farm income risk, income diversification.

Determinants of Non-farm Income Diversification in Developed Villages of Bangladesh

Problem statement: Though the Non-Farm Sector (NFS) has been prioritized in the national policy documents, empirical evidences based on the broader definition of the sector seem to be insufficient about its role both in income diversification and income distribution especially in segmented area of rural Bangladesh. Approach: We use income inequality Gini decomposition method for exploring the role of Non-Farm Incomes (NFIs) and censored Tobit regression for estimating determinants of NFI diversification. We use original data collected from a field survey on individual participation in farm and Non-Farm Activities (NFAs), labor time and household incomes of 214 randomly selected households in four villages of a typical developed rural area, namely, Comilla Sadar Upazila (Sub-district), for the year 2005-06. Results: The NFAs are undoubtedly no longer "marginal" in the case study villages. In addition to supporting the fact that despite having the greater role of the NFS in income diversification and increasing household income, the NFI components do very little or nothing to reduce income inequality, our Gini-decomposition results suggest that further unevenly access to local high return non-farm self-employments and out-country remittance employments would actually aggravate the income distribution. In addition to local NFS, our econometric results give us several important insights for non-local remittance (out-country) and other incomes (transfers): Lower extent of local high-return Household Non-Farm Enterprises (HNFEs) is a reality and landholding is crucially important for financing such HNFEs. For high-return non-farm wage employments and out-country remittance incomes, where the low-income households have limited access, education is particularly important. Participation of female in direct economic activities is negligible. Social capital and local institutions are not significantly active in promoting either local or non-local NFS. Conclusion/recommendations: The future NFS development strategy, thus, should be aimed at promoting high-return HNFEs and creating out-country remittance employment opportunities for the low income households, making local institutions more effective, and increasing female participation in direct economic activities.

Nonfarm income diversification and household livelihood strategies in rural Africa: concepts, dynamics, and policy implications

Asset, activity and income diversification lie at the heart of livelihood strategies in rural Africa. This paper introduces a special issue on the topic “Income Diversification and Livelihoods in Rural Africa: Cause and Consequence of Change.” We concentrate on core conceptual issues that bedevil the literature on rural income diversification and the policy implications of the empirical evidence presented in this special issue.

The Determinants of Nonfarm Income Diversification in Rural Peru

This paper shows that in Peruvian rural areas, there has been substantial growth over the past decade in household employment outside of own-farming. At present 51% of the net income of rural households comes from these off-farm activities, and thus they certainly cannot be considered as “marginal.” The reasons households diversify their incomes are several. Access to public assets such as roads and private assets such as education and credit is an important factor in diversification. Increasing access to these assets will help rural households to increase their self-employment as well as wage employment in the nonfarm sector.