Patterns of Livelihood Diversification: The Case of Kembata Tambaro Zone, Southern Ethiopia

Abstract

Population density has led to land scarcity in the rural farm households. This has adversely affected livelihood activities in agriculture leading to low income. Farm households in KTZ tend to rely on alternative income sources to improve their household income and increase agricultural production. However, the households level of livelihood diversification to different income sources beyond agriculture vary across land holding size. Thus, the aim of this article is to measure the level of diversification of farming household’s livelihood into non/off-farm activities in the study area. A huge amount of farm level primary data was collected from the study area individual farmers through personal interview using structured questionnaire. A total of 252 sample households who were selected through a combination of purposive and stratified random sampling techniques were retained for subsequent analysis. The finding of the survey result indicates that ninety seven percent of the respondents in the study area diversified in to non-farm activities. The study has also shown that non-farm income accounts for 53% total income of rural households in rural Ethiopia. The Composite Entropy Index has been used for measuring livelihood diversification. The livelihood diversification index of 0.260 (CV 94) showed that majority of the household heads undertook one form of livelihood diversification strategies or another. It has been argued that there is a significant difference (at 1% level of significance) among different farm size with respect to level of livelihood diversification. It is evident that livelihood diversification is the highest among small land holding groups and small holders derive a higher proportion of their income from non-farm sources than large farm holders. Therefore, the smallholder farm households’ participation in lucrative non-farm activities needs to be strengthened.

Keywords: Livelihood diversification, Composite Entropy Index, level of livelihood diversification, rural farm households, land holding size, Kembata Tambaro Zone, Ethiopia.