DETERMINANTS OF RURAL HOUSEHOLDS LIVELIHOOD DIVERSIFICATION: IN CASE OF KEBENA DISTRICT, GURAGE ZONE

Abstract

The study examined the determinants of livelihood diversification of farm households in case of Gurage Zone Kebenadistricts. The specific objectives were identifying the factors influencing farm household livelihood diversification as well as to examine the contribution of livelihood diversification on household income. For achieving these objectives primary data was collected. The data were obtained from 376 sample household heads that were selected through a combination of two-stage, purposive and simple random sampling techniques, and also analyzed with both descriptive and econometric analysis. The descriptive statistics were used to assess the livelihood strategies and their contribution. The finding of the study indicates that households in Kebena district engage in various livelihood activities such as on farm only, on-farm plus off-farm, off-farm and the combination of all (on farm plus off-farm and non-farm). From the sampled households 40.5% work exclusively on-the farm,31.4% On-farm plus Off-farm, 21.5%on Off-farm and 6.6% On-farm plus Off-farm plus Non-Farm. Multinomial logit model applied to investigate the determinant factors influencing the household’s livelihood diversification. In this regard, the econometric analysis demonstrated that out of the total eleven variables included in the model only nine variables including farm size, livestock holding, gender, age, education level, market distance, dependency ratio, access to credit, and access to extension service are found to be the significant determinants up to 10% probability levels. Finally the study recommends government and focusing group expand and strengthening the agricultural extension service for rural households so as to create a diversified livelihood activity and improve the livelihood of the farmers household and extension on off-farm and non-farm opportunities and on the role of participating in cooperatives, facilitating the availability of credit, and enhancing elder farmers’ knowledge.