Causes and Effects of Land Size Variation on Smallholder’s Farm-Income: The Case of Kombolcha District of East Hararghe, Oromia, Ethiopia

Abstract

For farmers, farmland is a basis of their livelihood and the basic agricultural resource and is now becoming a constraint in agricultural production. This study was carried out in Kombolcha district of Oromia National Regional State. The specific objectives of the study were to identify the factors affecting size of landholding and to analyze the effects of land size variation on farm income. To address these objectives a two-stage random sampling procedure was used to select 5 peasant associations and 110 sample respondents from a total of 19 peasant associations found in the district. Multiple linear regression and Cobb-Douglass production functions were used for analyzing the cause of land size variation and effects of land size variation on farm income respectively. Accordingly, age of the household head, agro ecology, family size and land availability in PA were found to be the significant factors in causing variation in size of land holding in the study area. The regression coefficients of the Cobb-Douglass production function indicate that the size of cultivated land, average land productivity, livestock owned and non-farm income were statistically significant factors in explaining variation in farm income among farmers. Therefore, there should be urgency of devising means and ways to improve the farm income through strengthening the production of cash crops. Besides this, productivity of land should be increased through the introduction of high yielding varieties of crops. And there should be strategy to create non-farm income sources for the smallholder farmers.