DETERMINANTS OF SMALLHOLDER FARMERS’ PARTICIPATION IN NON-FARM ACTIVITIES: IN CASE OF DARO LABU DISTRICT, WEST HARARGHE ZONE, OROMIA NATIONAL REGIONAL STATE, ETHIOPIA

Abstract

This study examined the determinants of smallholder farmers’ participation in and income from non-farm activities. In case of Daro Labu district, West Hararghe zone Oromia National Regional State, Ethiopia. Data for the study was collected using structured questionnaires from 160 randomly selected farm households and secondary data from different source. Determinants of smallholder farmers’ participation in non-farm activities and the income derived from non-farm activities were identified using Heckman two stage selection models to capture selections bias. The smallholder farmers’ who participated in non-farm activities constitute about 55.6 percent. The probit model part estimation, identified that farm size, family size, credit access, social network, distance to main road, five up to eight grades educational level and ownership of pack animals determine the probability of participation in non-farm activities in the study area significantly and The ordinary least square estimation, it was found out that training on non-farm activities, sex, credit access and divorced marital status of the sample household heads were found to be significant in explaining income generated from non-farm activities in the study area. Results show that the incomes from non-farm activities had high effect on the income level of participant sample farm households. The main non-farm activities were petty trade, khat trading, coffee trading, wage labor, livestock trade and other non-farm activities in the study area. There was a great difference in household income level between households who participated in non-farm activities and those who were merely dependent on agriculture. Hence, training regarding the role of non-farm activities on farm household income level should be necessary for household income growth and improvements of living standard of farm households.