Abstract:
This study was based on cross sectional survey data collected from 390 rural farm households. Multistage sampling technique was used to select the representative sample following purposive sampling to achieve the objective of the study. Descriptive statistics was used to investigate the rate of rural households’ off-farm income diversification and identify off-farm income generating activities pursued by rural farming households. Multivariate probit model was used to estimate major determinants of off-farm income diversification strategy.Accordingly, out of 390 sampled rural households 64% of the respondents were found to be diversifying their income sources either by participating in off-farm self-employment activities, agricultural wage employment or nonagricultural wage employment activities but the remaining 36% of respondentswas depended on agriculture only.Multivariate probit estimation result revealed that off-farm self-employment strategy was positively and significantly affected by gender, family size, education, access to credit, access of training and saving but negatively and significantly affected by livestock and market distance. On other hand agricultural wage employment strategy was negatively affected by education, livestock unit, land and credit access but positively affected by family size. Nonagricultural wage strategy was negatively affected by livestock unit and farm land size but positively affected by family size. These factors need to be considered by policy makers in the planning of rural development strategies
