Factors Affecting Livelihood Diversification Decision: The Case of Kuormuk and Homosha Districts of Assosa Zone, Beneshangul Gumuz Regional State, Ethiopia

Abstract

Ethiopia’s agricultural productivity is considered low despite the presence of various agricultural policies. These policies focus mainly on on-farm agricultural development to the neglect of rich opportunities for non-agricultural livelihood diversification activities. Livelihood diversification is a strategy that can boost farmers’ income and promote sustainable land management practices. This study was conducted to assess the various factors that affect households’ decisions on livelihood diversifications the case of Kuormuk and Homosha districts of Assosa zone, Beneshangul Gumuz regional state, western Ethiopia. Data was gathered by household survey from 376 sample households of 13 randomly selected rural kebeles of the Homosha and Kuormuk Districts through structural questionnaires. The alternative livelihood strategies that were used by the study households were agriculture only, and agriculture plus other activities (off-farm and non-farm activities). Binary Logit model was employed in identifying the determinants of rural livelihood diversification decision. From 13 hypothesized explanatory variables, 5 variables were found to have significant effect in determining diversification of household livelihood decisions. Accordingly, age of the household head, access to credit, receiving remittance and land size have negative association with livelihood diversification strategy. Whereas, getting training has a positively influence on households choice of livelihood diversification. Therefore, the findings of this imply that rural households’ development policies should consider off-farm and non-farm livelihood activities in addition to agriculture.