Journal of Development and Agricultural Economics
Subscribe to JDAE
Full Name*
Email Address*

Article Number - 471CD8760570


Vol.8(10), pp. 215-227 , October 2016
DOI: 10.5897/JDAE2016-0736
ISSN: 2006-9774



Full Length Research Paper

Determinants of off farm income diversification and its effect on rural household poverty in Gamo Gofa Zone, Southern Ethiopia



Fassil Eshetu
  • Fassil Eshetu
  • Department of Economics, College of Business and Economics, Arba Minch University, Ethiopia.
  • Google Scholar
Elias Mekonnen
  • Elias Mekonnen
  • Department of Economics, College of Business and Economics, Arba Minch University, Ethiopia.
  • Google Scholar







 Received: 17 April 2016  Accepted: 22 August 2016  Published: 31 October 2016

Copyright © 2016 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0


Data from 500 rural farm households were collected using multistage sampling technique from Gamo Gofa Zone, Southern Ethiopia and the determinants of off farm income diversification and its effect on rural poverty were examined with the help of logit and multinomial logit model. The regression result revealed that age, education, access to infrastructure, livestock ownerships, credits uses, and farm income are the main determinants of households’ participation in off farm activities. In addition, off farm participation rate was 76% while off farm income accounts for 51% of the total household income in the study areas. The estimation results of the logit model also showed that off farm participation significantly reduces the probability of being poor of rural farm households. The study also determined the poverty line and about 29.8% of the population were found below poverty line. Therefore, to reduce rural poverty, entry barriers to off farm activities (access to finance, market, education and infrastructures) need to be overcome and off farm opportunities (micro and small enterprises) in rural areas have to be expanded by government.

 

Key words: Off farm income, livelihood diversification, rural poverty, multinomial logit, Ethiopia.

Abdulaia A (2001). Determinants of income diversification amongst rural households in Southern Mali. Food Policy 26(4):437-452.
Crossref

 

Abdul-Hakim R, Che-Mat SH (2011). Does farmer's diversification into Non-farm employment reduce their likelihood of Poor? Evidence from Malaysia. J. Bus. Policy Res. 16(1):145-155.

 
 

Abdul-Malek M, Usami K (2010). Do non-farm incomes really matter for poverty among small households in rural Bangladesh? A case of advanced villages. J. Dev. Agric. Econ. 2(7):250-267.

 
 

Adam, R. (1999). Non-farm income, inequality and land in rural Egypt. World Bank policy research paper #2178.
Crossref

 
 

Babatunde R, Qaim M (2010). Impact of off-farm income on food security and nutrition in Nigeria. Food Policy 35(4):303-311.
Crossref

 
 

Berehanu E (2007). Livelihood Strategies of Smallholder Farmers and Income Poverty in draught prone areas: The case of Gena- Bosa woreda, SNNPRS. An MSc Thesis Presented to the School of Graduate Studies of Haramaya University.

 
 

Barrette CB, Reardonb T, Webbc P (2001). Nonfarm Income Diversification and Household Livelihood Strategies in Rural Africa: Concepts, Dynamics and Policy Implications. Food Policy 26(4):315-331.
Crossref

 
 

Carswell G (2002). Livelihood diversification: increasing importance or increasingly recognized? Evidence from Southern Ethiopia. J. Int. Dev. 14:789-804.
Crossref

 
 

Chang H, Mishra A (2008). Impact of off-farm labor supply on food expenditures of the farm household. Food Policy 33(6):657-664.
Crossref

 
 

Demeke M (1997). Rural non-farm activities in impoverished Agricultural communities: the case of Shoa Northern Ethiopia, De-organization and Rural employment. Network, Working papers P 25.

 
 

Ellis F (2000). The determinants of rural livelihood diversification in developing countries. J. Agric. Econ. 51:289-302.
Crossref

 
 

Lanjouw J, Lanjouw P (1995). Rural non-farm employment: Policy research working Paper 1463.

 
 

Lanjouw P (1999). Rural non-agricultural employment and poverty in Ecuador. Econ. Dev. Cultural Change 48:91-122.
Crossref

 
 

Lanjouw P (2013). Non-Farm Diversification, Poverty, Economic Mobility and Income Inequality: A Case Study in Village India. World Bank Policy Research Working Paper No. 6451.
Crossref

 
 

Raju G (2014). Factors Affecting Nonfarm Income Diversification among Rural Farm Households in Central Nepal. Int. J. Agric. Manage. Dev. 4:2.

 
 

Reardon T (1997). Using evidence of household income diversification to inform study of the rural nonfarm labor market in Africa. World Dev. 25(5):735-747.
Crossref

 
 

Reardon T (2000). Household Income diversification into rural nonfarm activities: Transforming the Rural Nonfarm Economy. Johns Hopkins University Press, Baltimore.

 
 

Egziabher TG (2001). Non-Farm Activities and Production Decisions of Farmers, the case of Damot gale and Kacha birra Woredas, in Southern Regions of Ethiopia. Soc. Sci. Res. Rep. Series 15:74.

 
 

Weldehana T (2002). Promoting farm /non-farm linkages for rural development, FAO, ISBN 92-5-104868-1.

 

 


APA Eshetu, F., & Mekonnen, E. (2016). Determinants of off farm income diversification and its effect on rural household poverty in Gamo Gofa Zone, Southern Ethiopia. Journal of Development and Agricultural Economics, 8(10), 215-227.
Chicago Fassil Eshetu and Elias Mekonnen. "Determinants of off farm income diversification and its effect on rural household poverty in Gamo Gofa Zone, Southern Ethiopia." Journal of Development and Agricultural Economics 8, no. 10 (2016): 215-227.
MLA Fassil Eshetu and Elias Mekonnen. "Determinants of off farm income diversification and its effect on rural household poverty in Gamo Gofa Zone, Southern Ethiopia." Journal of Development and Agricultural Economics 8.10 (2016): 215-227.
   
DOI 10.5897/JDAE2016-0736
URL http://academicjournals.org/journal/JDAE/article-abstract/471CD8760570

Subscription Form