This study assesses the determinants of off-farm work participation decisions of farm households in Ethiopia.
Ethiopia is an agrarian society where nearly 85% of the population is directly dependent on farming activities for their livelihood. It accounts for about 50% of the GDP and 90% of the total foreign exchange earnings. Crop production, livestock husbandry and mixed farming are the main types of farming activities in the country. Family labour is the primary farm input for the sector. The agricultural sector of the country is still characterized by low labour productivity, a declining farm size (an average of one hectare per household) and traditional farming systems, natural resources degradation, variable weather conditions, tenure insecurity, weak agricultural research base and extension system, lack of financial services, imperfect agricultural markets and poor infrastructure.
Non-farm activities have a great potential to provide employment and additional incomes during the slack season to rural households. In addition, given rising population pressure on agricultural land which results in a decline in land holding per individual, off-farm activities can provide alternative employment. Despite their great potential, rural non-agricultural activities account for less than 3% of the rural labour force.
Table of Contents
1. INTRODUCTION
1.1. Background of the study
1.2. Objective of the Review
2. LITERATURE REVIEW
2.1. Concepts and Roles of Off-Farm Activities
2.1.1. Concepts of Off-Farm Activities
2.1.2. Role of Off-Farm Activities
2.2. Theoretical Model
2.2.1. Theoretical Framework Of Modeling Selection Bias
2.3. Empirical Studies
2.3.1. Empirical Evidences from Other Developing Countries
2.3.2. Empirical Evidences on Ethiopia
2.4. Motives of Livelihood Diversification
2.5. Overview of Livelihood Diversification in Africa
2.6. Household Level Benefits of Off-Farm Activities
2.7. Conceptual Frame Work
3. Summary and Conclusion
3.1. Recommendation
Research Objectives and Themes
This research aims to conduct a comprehensive literature review to identify the socio-economic and demographic determinants that influence the participation of rural farm households in Ethiopia in off-farm work, while highlighting the potential role of these activities in poverty reduction and livelihood diversification.
- Determinants of off-farm labor market participation in rural Ethiopia.
- The role of livelihood diversification as a coping mechanism for smallholder farmers.
- Economic linkages between agricultural production and off-farm employment.
- Distinction between "push" factors (necessity) and "pull" factors (opportunity) in labor allocation.
- Policy recommendations for promoting rural income stability and poverty alleviation.
Excerpt from the Book
2.1.1. Concepts of Off-Farm Activities
As engine of economic growth and poverty reduction, in developing countries, agriculture should be integrated with sectors that have direct or indirect linkages. According to Babatunde et al. (2010) financial capital appears to be the most limiting factor for farming, so that cash income from off-farm activities helps to expand farm production; increase household income and reduce risk of crop failure. Hence, off-farm is one among the activities whereby agriculture is believed to be integrated with. World Bank (2008) has reported that, in most developing countries, the importance of off-farm activities is increasing and estimated to account for 30 to 50% of rural incomes. According to Rios et al. (2008), the higher the off-farm income is, the larger capital endowments; and having higher capital endowments will in turn help to produce more and more and even to be productive.
According to Asenso-Okyere and Samson (2012), Haggblade et al. (2010) and Diao and Nin Pratt (2007), modern agricultural inputs can result with ample production and productivity of marketable commodities that results with trade linkage; the requirement of agricultural inputs and marketing facilities by itself, induces off-farm activities. According to World Bank (2018), Off-farm employment comprises both being wage employed outside the farm-household (i.e. off farm wage employment) and running a non-farm enterprise (NFE) (i.e. off-farm self employment). Men and women enter off-farm employment either out of necessity (push factors) or opportunity (pull factors) (Haggblade et al., 2010). The literature has defined push factors as negative factors that force households and individuals to seek supplementary income sources outside the farm while pull factors are defined as positive factors that attract people into off-farm employment to improve their welfare (AloboLoison, 2015).
Summary of Chapters
1. INTRODUCTION: This chapter introduces the agrarian structure of Ethiopia, the low prevalence of off-farm activities compared to other African nations, and the research objective to review determinants of participation.
2. LITERATURE REVIEW: This section covers theoretical models and empirical evidence regarding off-farm work, distinguishing between survival-led diversification and opportunity-led diversification across various regions.
3. Summary and Conclusion: This final chapter synthesizes the main findings, emphasizing that off-farm activities are crucial for income stability, and provides recommendations for strengthening credit, training, and policy focus on rural households.
Keywords
Off-farm, participation, rural households, Ethiopia, livelihood diversification, push factors, pull factors, agricultural development, smallholder farmers, poverty reduction, labor supply, income stability, human capital.
Frequently Asked Questions
What is the primary focus of this research?
The research focuses on reviewing the determinants that influence the decisions of Ethiopian farm households to participate in off-farm work, a strategy crucial for livelihood diversification and income stability.
What are the central themes discussed in this work?
The central themes include the role of off-farm activities in poverty reduction, the distinction between "push" (necessity) and "pull" (opportunity) factors for diversification, and the impact of human capital and farm characteristics on labor allocation.
What is the main objective of the study?
The main objective is to provide a comprehensive review of existing academic literature to understand why and how rural households in Ethiopia participate in non-farm economic activities.
Which scientific methods are analyzed in this research?
The paper reviews various studies that utilize econometric frameworks, specifically the two-stage Heckman sample selection model, to analyze participation decisions and the intensity of labor engagement.
What does the main body of the paper address?
The main body examines concepts, theoretical models, and empirical evidence from various developing countries and specific studies conducted in Ethiopia regarding off-farm income generation.
What are the key terms that characterize this study?
The study is characterized by terms such as off-farm participation, rural households, livelihood diversification, subsistence farming, and socio-economic determinants.
How do "push" and "pull" factors influence a household's decision?
"Push" factors are negative triggers like drought or land scarcity that force households into low-return activities for survival, whereas "pull" factors are positive incentives like market accessibility that attract households to more lucrative non-farm ventures.
What role does livestock ownership play in off-farm participation?
Livestock ownership often acts as a proxy for resource endowment; higher ownership levels enable farmers to invest in off-farm activities, such as processing livestock products for trade, thereby increasing their participation.
What recommendations does the author provide for policymakers?
The author recommends enhancing credit access, investing in veterinary services, improving forage programs, and providing non-farm skills training to empower rural households to diversify their income streams effectively.
- Arbeit zitieren
- Geleta Abera (Autor:in), 2021, Ethiopian rural farm households participation on off-farm activities, München, GRIN Verlag, https://www.grin.com/document/1008099
