DETERMINANTS OF OFF- FARM AND NON-FARM INCOME DIVERSIFICATION AND EFFECT ON RURAL HOUSEHOLD OF THREE SELECTED RURAL KEBELE OF HAWASSA ZURIA WOREDA

Abstract

This study aimed on assesses of the determinants of off- farm and non-farm income diversification and effect on rural household of three selected rural kebele of Hawassa Zuria Woreda. The study was descriptive survey research design that follows pragmatic way using a mixed approach and conducted on 240 households that were selected through purposive sampling. Data collected through questionnaires’, interviews and key interview informants and analyzed by descriptive statistics, t-test, multiple regressions and multinomial regression using SPSS and Stata software. The reliability of the data analysis was checked with Cronbach’s alpha and it was reliable. According to the finding, both off-farm and non-farm activities have shown statistically significant contribution on the income of the households and have been filled most of the household’s expenditure. Family size, health status, farm size, income level, transport cost, credit access and training were statistically significant on the choice of household in these business activities. However, in off-farming activities age of the households, family size, educational level, distance from the market, health status, farm size, income level transportation cost, and training were statistically significant and affected the choice of farmers in off farm activities. However; the household faced lack of capital, lack of awareness, shortage of infrastructures, attitude of society and lack of business knowledge and skill whereas age, level of income, household size, land size credit access and transportation are the main challenges for participation of off-farm and non-farm activities in the study areas. Therefore, the study recommended that policy and strategy that enhance the participation the households on off-farm and non-farm income diversification and household members should be encouraged to take up off- farm and non-farm activities so as to argument their income and raise their standard of living.