Determinants and effects of off-farm participation on income diversification among farmers households in hadiya zone, Central Ethiopia

Abstract

This study was analyze the determinants and effects of off-farm participation on income diversification among farmer’s households in selected districts in Hadiya Zone, Ethiopia using cross-section data. Primary data were collected from 260 sample respondents using simple random sampling. Descriptive statistics were applied to characterize the sample households by table, figure and percentage. Probit model and PSM were used for estimation of determinant participation of rural households in off-farm activities and impact level of annual income from off -farm activities. The result of factors affecting participation of rural households in non-farm activities indicate access to credit, access to road services, access for telephone service, access to medical facilities and nutritional status had a positive effect on off-farm participation of households at 1% significant level and also age of respondents, education status, family size, farm size and demand for product had a positive effect on off-farm participation of households at 5% and 10% significant level. The infrastructure development of the study area is below average in researcher observation. Therefore, road construction, electricity and telephone services should be developed in order to facilitate annual income households and participate off-farm activities to improve their welfare. Finally, there should be policy and program intervention to facilitate and stimulate participation of rural household in off-farm activities due to non-farm activities has play a great role for increasing rural employment and improving wellbeing of the rural household.

Key words: average income, off-farm activities, Probit model , Prosperity Score Matching,  welfare

DOI: 10.7176/JAAS/84-04

Publication date: January 31^st 2025