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.
