Determinants of Participation in Non-farm Activities among Rural Farm Households in Ambo District of West Shoa Zone, Oromia Region, Ethiopia

Abstract

This study examined the determinants of non-farm economic activities participation decisions among rural farm households in Ambo district of West Shoa zone of Oromia region, Ethiopia. The research design adopted in this study was cross-sectional field survey from which a total of 300 rural farm households drawn. Descriptive statistics and logistic regression model were applied to investigate the effect of various factors on the decision to participate in non-farm economic activities. The logistic results show that gender, marital status of household head, dependency ratio, skill, access to credit and distance to the nearest market were found to be the key factors that significantly influenced rural farming household’s decisions to participate in non-farm activities. Women and married headed rural farm households were more likely to participate in non-farm activities. Transferable skill and access to credit also have positive influence on rural farm household decision to participate in non-farm activities. High dependency ratio and a long distance from the house to nearest market have strong negative effect on the decision to participate in remunerative non-farm activities. According to the descriptive result, the major non-farm economic activities that help rural households in the study area comprise selling of foods and drinks, retail shop, selling of wood and charcoal, trade in grain general, weaving, boutique, and craft work. The study has also identified factors that lead households to participate in non-farm activities. They include low income from farming activities, land inadequacy, soil fertility or productivity, growing family size, and increased opportunities. Thus, while this study is not advocating for non-farm economic activities as a substitute to farming, non-farm work could be a reliable complement to farming activities. Policies that aim to increase the non-farm work participation decisions of family members should take into consideration the difference in responses to the various factors that affect the non-farm activities decisions of rural farm households.

Keywords: Determinants, Participation, Non-farm activities, Rural Households, Logit Model

DOI: 10.7176/JEP/12-4-04

Publication date: February 28^th 2021