Smallholder rural farm households face an increasing need of looking for alternative income sources to supplement their small scale agricultural activities. However, livelihood diversification is determined by complex and yet empirically untested factors in Debre Elias Woreda. Thus, the aim of this study is to assess the determinants of livelihood diversification strategies in the study area. The data were collected through both primary and secondary data collection methods. The data were obtained from 160 sample household heads that were selected through a combination of two-stage, purposive and simple random sampling techniques. The descriptive statistics were used to identify the livelihood strategies and the livelihood assets. The finding of the survey result indicates that much of the rural households (61%) in the study area practice diversified livelihood strategies that combined on-farm activities with non/off-farm activities. Multinomial logit model applied to investigate the determinant factors influencing the households’ choice of livelihood strategies. In this regard, the econometric analysis demonstrated that out of the total sixteen variables included in the model only seven variables including land size, livestock holding size, sex of household head, mass media, market distance, total annual household income, and urban linkage are found to be the significant determinants up to 10% probability levels. The results of this study suggest that both agricultural intensification and non/off-farm diversification should be strengthened to attain smallholder households’ livelihood security.
Key words: Livelihood, off-farm, non-farm, diversification and smallholder.
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