Rural Farm Households’ Income Diversification: The Case of Wolaita Zone, Southern Ethiopia
Social Sciences
Volume 6, Issue 2, April 2017, Pages: 45-56
Received: Apr. 6, 2016; Accepted: Jun. 3, 2016; Published: Apr. 26, 2017
Views 3878      Downloads 225
Author
Yishak Gecho, Rural Development and Agricultural Extension Department, Wolaita Sodo University, Ethiopia
Article Tools
Follow on us
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.
Keywords
Income Diversification, Rural Households, Binary Logit Model, Wolaita, Ethiopia
To cite this article
Yishak Gecho, Rural Farm Households’ Income Diversification: The Case of Wolaita Zone, Southern Ethiopia, Social Sciences. Vol. 6, No. 2, 2017, pp. 45-56. doi: 10.11648/j.ss.20170602.12
Copyright
Copyright © 2017 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
References
[1]
MEDaC (Ministry of Economic Development and Planning), 2008. Survey of the Ethiopian Economy. Review of post reform development. MEDAc, Addis Ababa.
[2]
World Bank. 2009. Diversifying the rural economy: An assessment of the investment climate for small and informal enterprises in Ethiopia,” October 6, 2009.
[3]
Jirström, M., A. Andersson and G. Djurfeldt. (2011). Smallholders caught in poverty – flickering signs of agricultural dynamism. In African Smallholders: food crops, markets and policy. (eds Djurfeldt et al.) London: CABI. Chapter 4, pp 74-106.
[4]
Losch, B., S. Freguingresh and E. White. (2011). Rural Transformation and Late Developing Countries in a Globalizing World: A Comparative Analysis of Rural Change. Final Report of the RuralStruc Program, Revised Version. Washington, DC: World Bank.
[5]
Winters, P., T. Essam, A. Zezza, B. Davis and C. Carletto (2010). Patterns of Rural development: A Cross-Country Comparison Using Microeconomic Data. Journal of Agricultural Economics, 61(3):628-651
[6]
Ellis, F. (2005). Small-Farms, Livelihood Diversification and Rural-Urban Transitions: Strategic Issues in Sub-Saharan Africa. A Paper prepared for the Research Workshop on: “The Future of Small Farms.” Withersdane Conference Centre, Wye, Kent, UK, 26-29 June 2005
[7]
De Janvry, A., E. Sadoulet and R. Murgai. (2002). Rural Development and Rural Policy. Handbook of Agricultural Economics, Chapter 31, Volume 2, Edited by B. Gardner and G. Rausser. Elsevier Science B.V.
[8]
Barrett, C. B., Reardon, T. and Webb, P. 2001. Non-farm income diversification and household livelihood strategies in Rural Africa: Concepts, dynamics, and policy implications”, Food Policy, 26 (4): 315 – 31.
[9]
Babulo, B., Muys, B. Nega, F. Tollens, E. Nyssen, J. Deckers, J. and Mathijs, E. 2008. Household livelihood strategies and forest dependence in the Highlands of Tigray, Northern Ethiopia. Agricultural Systems 98 (2): 147&55.
[10]
Haggblade, S., P. Hazell and T. Reardon. (2010). The Rural Non-farm Economy: Prospects for Growth and Poverty Reduction. World Development, 38(10):1429–1441
[11]
Reardon, T. (1997). Using Evidence of Household Income Diversification to Inform Study of the Rural Nonfarm Labor Market in Africa. World Development, 25(5):735-747
[12]
Ellis, F. (1999). Rural livelihood diversity in developing countries: evidence and policy implications. Overseas Development Institute (ODI), Natural Resource Perspectives, Number 40.
[13]
Bryceson, D. (2005). African Rural Labor, Income Diversification & Livelihood Approaches: A Long-term Development Perspective. Review of African Political Economy 26, 80: 171-189.
[14]
Ellis, F. and Freeman, H.A. 2005. Rural livelihoods and poverty reduction policies. London and New York: Routledge.
[15]
Haggblade, S., Hazell, P.B.R. and Reardon, T. 2007. Transforming the Rural Non-farm Economy, John Hopkins University Press, Baltimore, USA.
[16]
Ellis, F. 1998. Livelihoods diversification and sustainable rural livelihoods. In Sustainable rural livelihoods: What contribution can we make? ed. D. Carney. London: Department for International Development (DFID).
[17]
Ellis, F. and Freeman, H.A. 2004. Rural livelihoods and poverty reduction strategies in four African countries. Journal of Development Studies 40(4): 1-30.
[18]
Babatunde, R. O., Olagunju, F. I., Fakayode, S. B. and Adejobi, A. O. 2010. Determinants of participation in off-farm employment among small-holder farming households in Kwara State, Nigeria.
[19]
EEA. 2008. Report on the Ethiopian economy. Volume VI 2006/07. Addis Ababa. Ethiopian Economic Association.
[20]
FDRE. 2010. Ethiopia’s agricultural sector policy and investment framework 2010-2020. Federal Democratic Republic of Ethiopia, Ministry of Agriculture and Rural Development. Draft final report, 15 September 2010.
[21]
CIDA. 2013. Assessment of CIDA’s food security strategy and funding in Ethiopia. Canadian Food Security Policy Group. Authored by Reach Consult Ltd. and Canadian Hunger Foundation, March 2013.
[22]
Stifel, D. 2010. The rural non-farm economy, livelihood strategies and household welfare. African Journal of Agricultural and Resource Economics, 4(1).
[23]
Devereux, S. 2001. Livelihood insecurity and social protection: A Re-emerging issue in rural development. Development Policy Review, 19(4): 507-519.
[24]
MoFED (Ministry of Finance and Economic Development). 2002. Ethiopia: Sustainable development and poverty reduction program. pp. 34, 71 & 76. Federal Democratic Republic of Ethiopia (FDRE) Ministry of Finance and Economic Development (MoFED), Addis Ababa, Ethiopia.
[25]
Goodrich, R. 2001. Sustainable rural livelihoods: A summary of research in Mali and Ethiopia.
[26]
Csaki, C. and Tuck, L. 2000. Rural development strategy: Eastern Europe and Central Asia. World Bank Tech. Report No. 484. World Bank, Washington DC, USA.
[27]
Upton, M. 1996. The Economics of Tropical Farming Systems. Cambridge Univ. Press, UK.
[28]
Bob Rijkers. 2008. Rural non-farm enterprises in Ethiopia: challenges and prospects understanding the constraints to continued rapid growth in Ethiopia: The role of agriculture Africa Regions, World Bank, November 2008.
[29]
Bush, J. 2002. Baseline household food economy assessment: Boloso Sore Woreda, Wolayita zone, Christian Aid, Addis Ababa, Ethiopia.
[30]
WZFEDD. 2012. Wolaita Zone socio-economic information. Wolaita Zone Finance and Economic Development Department, May 2012.
[31]
Yamane, T. 1967. Statistics. An introductory analysis, 2nd Ed. Harper and Row. New York
[32]
Greene, W. 2000. Econometric analysis. Englewood Cliffs, NJ: Prentice Hall
[33]
Feder, L., Just, R. E. and Zilberman, O. 1985. Adoption of agricultural innovation in developing countries: “A survey” economic development and cultural change, 32(2): 255-298.
[34]
Liao, T.F. 1994. Interpreting Probability Models: Logit, probit, and other Generalized Linear Models. Sage university Paper Series on qualitative applications in the social sciences. P. 07-101. Thousand Oaks, CA: Sage.
[35]
Sharma, V. P. 1997. Factors affecting adoption of alkali land reclamation: An application of multivariate logistic analysis. Indian Journal of Agricultural Economics, Vol. 52, No. 2, April-June 1997
[36]
Gujarati, D. N. 1995. Basic Econometrics. Second Edition. New York, MacGraw Hill, Inc. 838p.
[37]
Ghosh, J. and Bharadwaj, K.1992. ‘Poverty and Employment in India’, in H. Bernstein, B. Crow and H. Johnson (eds) Rural Livelihoods: Crises and Responses, Oxford: Oxford University Press and The Open University.
[38]
Mujib Urrehman, J. and Rana, M. F. 2008. Five livelihood strategies of different categories of households in rural areas of Abbottabad, Pakistan. Sarhad J. Agric. Vol.24, No.4, 2008.
[39]
Berry, S. 1989. Coping with Confusion: African farmers’ responses to economic instability in the 1970s and 1980s, Boston: African Studies Centre, Boston University.
[40]
Amare Demissie and Belaineh Legesse, (2013). Determinants of income diversification among rural households: The case of smallholder farmers in Fedis district, Eastern hararghe zone, Ethiopia *Journal of Development and Agricultural Economics Vol. 5(3), pp. 120-128, March 2013.
[41]
Ellis, F. 2004. Occupational diversification in developing countries and implications for agricultural policy. December 2004, Hot Topic Paper
[42]
Dilruba, K. and Roy, B.C. 2012. Rural livelihood diversification in West Bengal: Determinants and constraints. Agricultural Economics Research Review Vol. 25(No.1) January-June 2012 pp 115-124.
[43]
Reardon, T., C. Delgado, and P. Matlon. 1992. "Determinants and effects of income diversification amongst farm households in Burkina Faso," Journal of Development Studies, 28 (January1992), pp. 264-296.
[44]
Valdivia, C. and Quiroz, R. 1999. Rural livelihood strategies, assets and economic portfolios in coping with climatic perturbations: A case study of the Bolivian Andes’, Integ. Natural Resource Mgt. Sustain. Agric., Forestry and Fisheries, 28-31 Aug., CIAT, Cali, Colombia.
[45]
Dercon, S. and Krishnan, P. 1996. Income portfolios in rural Ethiopia and Tanzania: Choices and constraints. Journal of Development Studies, 32(6): 850-875.
[46]
Kaija Darlison (2007): Income Diversification and Inequality in Rural Uganda: The Role of Non-Farm Activities. A paper prepared for the Poverty reduction, Equity and Growth Network (PEGNeT) Conference, Berlin, September 6-7, 2007.
[47]
Idowu A. O, Awoyemi T. T, Omonona B. T and Fausi A. O (2011): Non-Farm Income Diversification and Poverty among Rural Farm Households in Southwest Nigeria. European Journal of Social Sciences. Vol21 no 1Pp 163-177.
[48]
LANJOUW, P., J. QUIZON and R. SPARROW (2001): Non-agricultural earnings in peri-urban areas of Tanzania: evidence from household survey data. In: Food Policy 26: 385-403.
[49]
SMITH, R.D., A. GORDON, K. MEADOWS and K. ZWICK (2001): Livelihood diversification in Uganda: Patterns and determinants of change across two rural districts. In: Food Policy 26: 421-435.
[50]
Awoniyi, Olabisi Alaba, 2 Salman, Kabir Kayode, 2009 Non-Farm Income Diversification and Welfare Status of Rural Households in South West Zone of Nigeria, UNDP Nigeria 2009.
[51]
Stefan Schwarze and Manfred Zeller, 2005. Income diversification of rural households in Central Sulawesi, Indonesia. Quarterly Journal of International Agriculture 44 (2005), No. 1: 61-73
[52]
Isaac, B., 2009. Poverty and income diversification among households in rural Nigeria: A Gender Analysis of Livelihood Patterns. Oluwatayo Conference Paper No 41.
ADDRESS
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
U.S.A.
Tel: (001)347-983-5186