Since independence, poverty reduction and enhanced food security have been Kenya Government’s objectives. At micro-level, households diversify income sources as a management strategy to enhance their welfare. However, this had not been satisfactorily achieved due to multiple factors. This research was aimed at analyzing factors influencing income diversification in maize based farming systems. It is hypothesized that these factors significantly contribute to the performance of agro-based household economies. A cross-sectional survey was carried out in 2004 covering 1850 rural households covering seven agro-ecological zones describing different sources of incomes and labour allocation using a structured questionnaire. Multi-stage sampling technique was used in selecting respondents. Descriptive statistics, multinomial logit and Tobit models were employed in the analyses. The results show that majority of farmers engage in cash cropping but with off-farm income supplementation. However, though there is evidence that most households have opportunities in cash cropping and non-farm activities, pricing, inefficiency in production and marketing negatively impact on the fight against poverty and food security. In addition, lack of capital, makes it difficult for farmers to diversify from subsistence agriculture to commercial farming. Household heads and their spouses spend about 70% of their time on-farm. The household members participate in low paying casual labour ranging from KSh. 84.00 to 120.00 per day which is relatively lower than the governments’ recommended rate of KSh 210 to 245 depending on locality. In addition, households with bigger farm size are more likely to participate in the non-farm sector than those with illiterate or low educated heads. This implies that government role in catalyzing asset accumulation through job creation in both farm and a non-farm activity is still an important aspect if poverty and food insecurity have to be alleviated.
Key words: Income diversification, labour allocation, constraints, Kenya.
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