ABSTRACT
Diversifying the sources of livelihood for subsistence farmers beyond agriculture plays a significant role in reducing poverty as well as withstanding the adverse impacts of climate change. A cross-sectional survey research design has been employed to examine the factors which determine the participation of rainfed-dependent smallholder farmers in non-farm activities using a mixed methods approach. Data were obtained from 384 randomly selected households in the Woleka sub-basin of Ethiopia. Data were collected using survey questionnaires and interviews were analyzed using mean, percentage, chi-square test, t-test, one-way ANOVA, binary logistic regression model and thematic analysis. Access to adequate capital, poor infrastructure and lack of training are the major constraints which hindered farmers from undertaking non-farm activities. The regression model result revealed that several factors determine the propensity of smallholder farmers’ participation to non-farm activities. Better-off households, households led by literate and younger heads, having access to microfinance, having extension services, and having social responsibilities create engagement in non-farm economic activities. We argue that strengthening agricultural extension services, providing microfinance, entrepreneurial training and skill development, and infrastructure development would enhance the participation of smallholder farmers in non-farm activities. To achieve this, policy makers and other stakeholders need to integrate non-farm livelihood strategies into rural farming economies.
1. Introduction
Climate change has increased uncertainty and risk, predominantly in the farming sector. As a result, strengthening the resilience and adaptive capacity of smallholder farmers are necessary so as to cope with this additional threat. In this regard, livelihood diversification is a key rural household survival strategy and plays a considerable role in reducing vulnerability to climate change effects and is among the possible adaptation options for adverse impacts. Engagement in non-farm activities, besides its contribution in absorbing rural surplus labor could enable to reduce income uncertainties, increasing agricultural productivity and could also be among the plausible adaptation strategies to climate change (Yaro 2013; IPCC 2014). In the past, as described by Lanjouw and Lanjouw (2001), the rural non-farm sector had been considered as a low-productivity sector which produces low-quality goods and was often expected to diminish as a country develops. However, a shift away from this position towards appreciation of the role of rural non-farm sectors in their contribution to economic growth, rural employment, poverty reduction, sustainable natural resource management, climate change adaptation strategy and a more spatially balanced population distribution have been developed recently. In one of its report, the World Bank gave its testimony that millions of rural people worldwide have enabled to leapfrog from poverty through better incomes and employment in rural non-farm enterprises and hence contributed to better livelihood (World Bank 2008). Since rural non-farm economies are mostly small-scale, require low entry capital, and its seasonality and amenability are suitable to home-based activity; they can play an important role in the economic transformation of developing countries and as a viable adaptation strategy to climate change-induced shocks (Haggblade, Hazel, and Reardon 2007). Empirical findings evidenced that, those engaged in non-farm livelihood activities are more likely to meet the basic need of their family, are more capable of withstanding shocks and having a more stable livelihood than those that have to farm as a single source of their income (Leary and Kulkarni 2007; Mwamba 2013; Seng 2015). A study by Ersado (2003) in Zimbabwe and by Mwamba (2013) in Kenya confirmed that households with a more diversified income portfolio were better able to withstand the unfavorable impacts of the policy changes and weather shocks. A study in rural Cambodia by Seng (2015) also confirmed positive gains for farm households in per capita food consumption due to their engagement in nonfarm activities.