ABSTRACT
Diversifying the sources of livelihood for subsistence farmers beyond agriculture plays a significant role in reducing poverty as well as withstanding the adverse impacts of climate change. A cross-sectional survey research design has been employed to examine the factors which determine the participation of rainfed-dependent smallholder farmers in non-farm activities using a mixed methods approach. Data were obtained from 384 randomly selected households in the Woleka sub-basin of Ethiopia. Data were collected using survey questionnaires and interviews were analyzed using mean, percentage, chi-square test, t-test, one-way ANOVA, binary logistic regression model and thematic analysis. Access to adequate capital, poor infrastructure and lack of training are the major constraints which hindered farmers from undertaking non-farm activities. The regression model result revealed that several factors determine the propensity of smallholder farmers’ participation to non-farm activities. Better-off households, households led by literate and younger heads, having access to microfinance, having extension services, and having social responsibilities create engagement in non-farm economic activities. We argue that strengthening agricultural extension services, providing microfinance, entrepreneurial training and skill development, and infrastructure development would enhance the participation of smallholder farmers in non-farm activities. To achieve this, policy makers and other stakeholders need to integrate non-farm livelihood strategies into rural farming economies.
1. Introduction
Climate change has increased uncertainty and risk, predominantly in the farming sector. As a result, strengthening the resilience and adaptive capacity of smallholder farmers are necessary so as to cope with this additional threat. In this regard, livelihood diversification is a key rural household survival strategy and plays a considerable role in reducing vulnerability to climate change effects and is among the possible adaptation options for adverse impacts. Engagement in non-farm activities, besides its contribution in absorbing rural surplus labor could enable to reduce income uncertainties, increasing agricultural productivity and could also be among the plausible adaptation strategies to climate change (Yaro 2013; IPCC 2014). In the past, as described by Lanjouw and Lanjouw (2001), the rural non-farm sector had been considered as a low-productivity sector which produces low-quality goods and was often expected to diminish as a country develops. However, a shift away from this position towards appreciation of the role of rural non-farm sectors in their contribution to economic growth, rural employment, poverty reduction, sustainable natural resource management, climate change adaptation strategy and a more spatially balanced population distribution have been developed recently. In one of its report, the World Bank gave its testimony that millions of rural people worldwide have enabled to leapfrog from poverty through better incomes and employment in rural non-farm enterprises and hence contributed to better livelihood (World Bank 2008). Since rural non-farm economies are mostly small-scale, require low entry capital, and its seasonality and amenability are suitable to home-based activity; they can play an important role in the economic transformation of developing countries and as a viable adaptation strategy to climate change-induced shocks (Haggblade, Hazel, and Reardon 2007). Empirical findings evidenced that, those engaged in non-farm livelihood activities are more likely to meet the basic need of their family, are more capable of withstanding shocks and having a more stable livelihood than those that have to farm as a single source of their income (Leary and Kulkarni 2007; Mwamba 2013; Seng 2015). A study by Ersado (2003) in Zimbabwe and by Mwamba (2013) in Kenya confirmed that households with a more diversified income portfolio were better able to withstand the unfavorable impacts of the policy changes and weather shocks. A study in rural Cambodia by Seng (2015) also confirmed positive gains for farm households in per capita food consumption due to their engagement in nonfarm activities.
Multiple motives (push factors and the pull factors) prompt households and individuals to diversify assets, incomes and activities. While some diversify because they have little choice, better-off households may diversify because they have a lot of choices (Ellis 2000; Barrett, Reardon, and Webb 2001). Diversification may occur either as a deliberate household strategy or as an involuntary response to the crisis; it can act both as a safety valve for the rural poor (survival) and as a means of accumulation for the rural rich (Ellis 1998; Adi 2007). Likewise, the reasons behind diversification as a livelihood strategy, according to Ellis (2000), are often divided into two principal considerations: necessity (involuntary and desperation reasons) or choice (voluntary and proactive reasons).
While reliance on non-farm income diversification is widespread in rural Africa, not all households enjoy equal access to attractive non-farm opportunities (Barrett, Reardon, and Webb 2001). Farm household diversification into non-farm activities emerges, according to Barrett, Reardon, and Webb (2001), from time-varying or diminishing returns to labor, market failures, as ex-ante risk management, and from ex-post coping with adverse shocks. Davis (2003) and Haggblade (2007) have categorized the driving factors behind diversification as demand-pull (like new market or technological opportunities) and distress-push (like lack opportunities, shocks, small land size, poor land quality and crop failures) factors. The combined relevance of push and pull factors suggests that there are two sets of non-farm activities: those who serve as last resort activities for the poor, and those that provide profitable opportunities for those who have access (Atamanov 2011).
As stressed by Ellis (1998), the basic issue to be addressed in any analysis of livelihood is what combination of result in
As stressed by Ellis (1998), the basic issue to be addressed in any analysis of livelihood is what combination of result in the ability to follow what combination of livelihood strategies with what outcomes are given a particular context. Members of a household combine their capabilities, skills and knowledge with different resources at their disposal to create activities that will enable them to achieve the best possible livelihood for themselves including non-farm economic activities (see Figure 1). In asset-based frameworks, capitals are usually allocated across six categories and livelihood outcomes are the achievements of livelihood strategies, such as more income, increased well-being, reduced vulnerability, improved food security and a more sustainable use of natural resources (Ellis 1998; DFID 1999). Diversification of livelihoods both on the farm and non-farm is among the major policy areas for building resilience to climate change and reducing vulnerability (Yaro 2013; IPCC 2014). Smallholder rainfed-dependent subsistence farmers are considered to be the most vulnerable to climate variability and change and need interventions to adapt their livelihood systems to changing climatic conditions (NMA 2007). With erratic rainfall, recurrent drought, limited participation in non-farm activities and widespread natural resource degradation in the study area, it could be very difficult for the smallholder farmers to overcome the adverse impacts of climate change and requires immediate interventions. Climate change and variability have become as one of the major threats and will further exacerbate the existing problems in the study area, and would probably further increase the vulnerability of rainfed-dependent smallholder farmers. Relief aid and safety net programs, which are being carried out by the government and non-governmental organizations (NGOs) in the study area, might contribute to saving life in times of famine but might not be a long-lasting solution to adapt the changing climate. Mintewab et al. (2010) on their part disclosed that growing foreseeable weather uncertainty would probably affect particularly the agricultural economy. As a result, understanding alternative and accessible coping mechanisms that enable the smoothing out of incomes and consumption by complementing varying sources of income is fundamental. In this regard, designing feasible and sustainable adaptation strategies, and diversifying the livelihood of the smallholder farmers besides agriculture could have a paramount contribution to enhancing their resilience capacity to climate change-induced impacts (Barrett, Reardon, and Webb 2001).
the ability to follow what combination of livelihood strategies with what outcomes are given a particular context. Members of a household combine their capabilities, skills and knowledge with different resources at their disposal to create activities that will enable them to achieve the best possible livelihood for themselves including non-farm economic activities (see Figure 1). In asset-based frameworks, capitals are usually allocated across six categories and livelihood outcomes are the achievements of livelihood strategies, such as more income, increased well-being, reduced vulnerability, improved food security and a more sustainable use of natural resources (Ellis 1998; DFID 1999). Diversification of livelihoods both on the farm and non-farm is among the major policy areas for building resilience to climate change and reducing vulnerability (Yaro 2013; IPCC 2014). Smallholder rainfed-dependent subsistence farmers are considered to be the most vulnerable to climate variability and change and need interventions to adapt their livelihood systems to changing climatic conditions (NMA 2007). With erratic rainfall, recurrent drought, limited participation in non-farm activities and widespread natural resource degradation in the study area, it could be very difficult for the smallholder farmers to overcome the adverse impacts of climate change and requires immediate interventions. Climate change and variability have become as one of the major threats and will further exacerbate the existing problems in the study area, and would probably further increase the vulnerability of rainfed-dependent smallholder farmers. Relief aid and safety net programs, which are being carried out by the government and non-governmental organizations (NGOs) in the study area, might contribute to saving life in times of famine but might not be a long-lasting solution to adapt the changing climate. Mintewab et al. (2010) on their part disclosed that growing foreseeable weather uncertainty would probably affect particularly the agricultural economy. As a result, understanding alternative and accessible coping mechanisms that enable the smoothing out of incomes and consumption by complementing varying sources of income is fundamental. In this regard, designing feasible and sustainable adaptation strategies, and diversifying the livelihood of the smallholder farmers besides agriculture could have a paramount contribution to enhancing their resilience capacity to climate change-induced impacts (Barrett, Reardon, and Webb 2001).
Figure 1. Determinants of non-farm economic activities: conceptual framework. Sources: Adopted from Ellis (1998), DFID (1999) and Barrett, Reardon, and Webb (2001).Display full size
A study by Temesgen, Ringler, and Hassan (2010), in the Blue Nile basin, found that smallholder farmers who have a non-farm source of income were less likely to depend on food aid and liquidating their assets in times of climate-induced shocks. Though empirical findings have underlined the importance of non-farm livelihoods, very small proportion of farmers in Ethiopia has access to non-farm income (Temesgen, Hassan, and Ringler 2008). A study by World Bank (2010, 84) found that income diversification as an adaptation strategy to climate change was not common in Ethiopia. Rijkers, Söderbom, and Teal (2008) particularly disclosed that only 25% of rural households in Ethiopia had one or more sources of income from non-farm activities and only 2% of all households relied exclusively on non-farm enterprise activities. According to this report, the participation of rural households in non-farm economic activities was among the lowest in Amhara National Regional State (ANRS) where this study is conducted. A similar result was disclosed by Bazezew, Bewket, and Nicolau (2013) in drought-prone areas of ANRS. Furthermore, a study by Bantider, Hurni, and Zeleke (2011) in the eastern escarpment of Wollo (Ethiopia) has reported that, though there is a scarcity of cultivated land and majority of farming households were destitute, livelihood diversification into non-farm activities was found to be low.
Even though expansion of non-farm income generating activities has been designed among the key intervention for moisture deficit areas during the growth and transformation period in Ethiopia (MoFED 2010, 53), they are not well developed and practiced in the study area. The limited availability of non-farm employment opportunities would make the effort of households in securing viable livelihoods that are resilient to climate change-induced vulnerability more difficult. Knowing the existing livelihood strategies and pointing out the determinant factors affecting smallholder farmers in practicing non-farm sources of livelihood is unquestionably important in the provision of information to formulate an appropriate strategy for the development of the sector. The major determinate factors inhibiting smallholder farmers to engage non-farm livelihood activities have not been studied adequately and empirical studies on this issue are limited in the study area. Therefore, the intent of this study was to identify the socioeconomic and institutional factors which determine the decision of smallholder farmers’ participation in non-farm activities.
2. Methods and materials
2.1. Description of the study area
2.1.1. Location and biophysical situation of the sub-basin
Woleka sub-basin (in the North central part of Ethiopia) covers an estimated area of 6415 km2 and situated approximately between 10°15′–10°55′N and 38°25′–39°30′E (Figure 2). The altitude of the sub-basin ranges between 1070 and 4200 meters above sea level and characterized with agroecology types ranging from tepid to cool moist and sub-moist mid-highlands (woinadega), and cold to very cold moist/sub-moist and sub-afroalpine to afroalpine in parts of the highlands (dega and wurch); and the lowlands in the western and southern parts of the basin being hot to warm moist and dry lowlands (kolla). This diverse agroecology enables the sub-basin to produce different crop, fruits and vegetable types; and rearing of varied types of livestock (SWDoFED 2017). The area receives annual rainfall ranging between 800 and 1390 mm; while the annual maximum and minimum temperature range between 13–31°C and −0.5–16 °C, respectively (Aster and Seleshi 2009). The area is characterized by both wet and dry seasons; and receives its maximum rainfall from June to September (main rainy season – locally known as kiremt); and February to May is the small rain season, which is locally known as belg (Aster and Seleshi 2009; Rosell 2011). Thus, crop production follows a bimodal rainfall regime (with single maxima type) leading to two harvesting periods (Kassa and Eshetu 2014; SWDoFED 2017) but the small rainy season is erratic and highly variable and experienced frequent failure which hampers belg harvesting considerably (Rosell 2011; Ayalew et al. 2012). Delayed onset and early cessation as well as poor belg performance make crop production challenging in the area. The rugged and bare mountains of the area also enhance runoff resulting into land degradation and hence low productivity. All these make the sub-basin as one of a drought-stricken and food-deficit areas of the country where food aid is a major source of livelihood for most of the population (Lakew et al. 2000; Bantider, Hurni, and Zeleke 2011; Kahsay 2013).
