DETERMINANTS OF FARM HOUSEHOLD’S PARTICIPATION IN NON-

FARM ACTIVITIES THE CASE OF CHEHA WOREDA OF GURAGIE

ZONE, ETHIOPIA.

A SENIOR RESEARCH PAPER SUBMITTED TO DEPARTMENT OF

AGRICULTURAL ECONOMICS IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE BACHLOR OF SCIENCE DEGREE
INAGRICULTURAL ECONOMICS.

BY:
GETACHEW HAILEGEBREAL -(AGR161/10)
YITAGES TAFESE-(AGR347/10)

ADVISOR: ZUBER OUMER

JANUARY, 2021
WOLKITE, ETHIOPIA

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 AKNOWLEDGMENT

First and for most, we would like to be thankful to the Almighty God for everything he has
done to us throughout our career.

We would like to forward the deepest of our appreciation and genuine gratitude to our advisors
Mr.Zuber Oumer for his critical and constructive comments, guidance and continuous supervision
and step by step follow-up.

Our appreciation goes to all staff members of the Department of Agricultural economics,
Wolkite University for their continuous and uncountable contribution to reshape us in the
academic and research activities throughout our stay at WKU.

Last, but not least, we would like to end our heartfelt thanks to our families for their remarkable
moral and uncountable support throughout my life and our friend Mr.Belete Tesfaye for his
continuous support throughout the whole research career.

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 LIST OF ACRONYMS AND ABBREVIATIONS

CSA Central Statistical Authority

EIAR Ethiopian Institute of Agricultural Research
ETB Ethiopian Birr (Ethiopian currency)
IFAD International Food and Agricultural Development
GZSA Guragie Zone Statistical Authority
MoARD Ministry of Agriculture and Rural Development
MoFED Ministry of Finance and Economic Development
SNNPR Southern Nations, Nationalities and Peoples Region

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 TABLE OF CONTENTS

AKNOWLEDGMENT ii
LIST OF ACRONYMS AND ABBREVIATIONS iii
LIST OF TABLES vi
LIST OF FIGURES vii
ABSTRACT viii
CHAPTER ONE 1
1. INTRODUCTION 1
1.1. Background 1
1.2. Statement of the Problem 3
1.3. Objective of the Study 4
1.4. Research Question 5
1.5. Scope and Limitation of the Study 5
1.6. Significant of the Study 5
CHAPTER TWO 6
2. REVIEW OF LITERATURE 6
2.1. Definition and Concepts 6
2.2. The Contribution of Non-Farm Activity for Farm Income 8
2.3. Non-farm Activities in Ethiopia 8
2.4. Determinants of Farmers Participation in Non-Farm Activities 10
2.2 Empirical review 11
CHAPTER THREE 13
3. RESEARCH METHODOLOGY 13
3.1. Description of the Study Area 13
3.2. Research Design, Target Population and Sampling Frame 15
3.3. Data Type, Source and Methods of Data Collection 15
3.4. Sampling Procedure and Sample Size Determination 16
3.4.1. Sampling Procedure 16
3.4.2. Sample size determination 16
3.5. Methods of Data Analysis 17

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 3.6. Definition of Variables and Working Hypothesis 18
CHAPTER FOUR 23
4. RESULT AND DISCUSSION 23
4.1. Determinants of the Household’s Non-farm participation 23
CHAPTER FIVE 28
5. CONCLUSIONS AND RECOMMENDATIONS 28
5.1. CONCLUSSIONS 28
5.2. RECOMMENDATIONS 29
6. REFERENCES 30
7. APPENDICES 34

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 LIST OF TABLES

Table 1: Determinant variables and hypothesized relation with dependent variable 22

vi
 LIST OF FIGURES

Figure 1: Geographical map of the study area 14

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 ABSTRACT

Farm household’s participation in non-farm activity is crucially important for the households to
improve their livelihood. Despite the multidimensional importance of non-farm activity for the
farm households, in rural parts of the country there are a number of factors limiting the
household’s participation in non-farm activity. Most of the literatures were used binary logit
model to identify the determinants of farmer’s participation in non-farm activities. This study
was targeted to identify the determinants of household’s participation in non-farm activity in
Cheha wereda of Guragie zone. This study was used to review different related literatures
conducted so far in different parts of the country to identify the factors affecting the farmers
participation in non-farm activity. The review results of this study confirmed that, age of the
household head, educational level of the household, family size, agro-ecology and access to
credit were significantly and positively affecting their participation. Whereas the land size holed
by the specific household affects their participation in non-farm activity negatively and
significantly. This study also confirmed that, hand craft, selling Tella and Tej, daily labour work,
pottery and small scale local trading in weekly markets are the non-farm activities that most
commonly available in most parts of the country.

Key words: non-farm activity, household, determinants, logit

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ix
 CHAPTER ONE

1. INTRODUCTION

1.1. Background

The rural non-farm economy is generally defined as comprising all those non-agricultural
activities, which generate income to rural households (including income in kind and remittances),
either through waged work or in self-employment. According to Ann and Catherine (2010) non-
farm activities have become an important component of livelihood strategies among rural
households by increasing the shares of non-farm income of the household which enables to
insure against agricultural production risk. They also argued that, when farming is less profitable
and move risky due to population growth and market failures, many households are pushed into
non-farm activities.

Non-developing countries where smallholder farming is dominant like in Ethiopia, non-farm

income activities play an enormous role in breaking the vicious cycle of food insecurity and
poverty, because non-farm income can significantly increase the total income of rural dwellers,
help smooth out income fluctuations, and improve food security through savings, which in turn
allows rural dwellers to survive sudden shocks (Oladimej et al,. 2015).

Sanchez (2005 ) stated that the previous estimates vary substantially across countries with rural
non-farm income generation activities shares across continents which range from 30 to 45% of
rural income, in terms of rural employment opportunity of rural nonfarm activities involve about
25% in Asia, West Asia and North Africa, with higher figures in Latin America about 33.33 %
and lower in Africa 10 %.

According to Adams (2001), in developing countries between one third and half of the
households generate their income from a non-farm source and the share of this type of income is
between 20 and 70% of the total household income. As a result of this most policymakers pay
due attention to the importance of promoting rural non-farm employment opportunities, since, in

1
many developing countries, agricultural alone can no longer absorb the rapidly growing rural
population, and uncontrolled labor migration to urban areas, which often brings only higher
social costs. He also confirmed that, not only employment opportunity and source of income
non-farming activity for most rural people in developing and transitional economies, are also part
of a diversified livelihood portfolio; ensuring that the rural population in developing countries
derives important income shares from rural non-farm activities by minimizing agricultural risks.

In Africa, the average share of rural nonfarm incomes as a proportion of total rural incomes, at
42%, is higher (Reardon et al., 2008). Most evidence shows that rural non-farming activity in
Africa is fairly evenly divided across commerce, manufacturing and services, linked directly or
indirectly to local agriculture or small towns, and is largely informal rather than formal. Hag
blade et al. (2008) found that services, commerce and restaurants to be the fastest growing non-
farm sectors. He also argued that, non-farm incomes provide the cash that enables a farm
household to purchase food during a drought or after a harvest shortfall and as a source of farm
household savings, used for food purchase in difficult times.

In Ethiopia, 20 % of rural income originates from non-farm sources. In some parts of Ethiopia,
non-farm income accounts up to 35 % of total farm household income. However, the Derg
regime failed to create favorable conditions that promote the development of non-farm rural
sector and alternative income and employment opportunities for rural households (Reta and Ali,
2012; Davis, 2003; Delgado (2003). Fikru (2010) argued that, although the Derge regime
favored the promotion of rural handicrafts and industrial activities under the cooperative
arrangement, the property ownership policy followed by the regime discouraged the
development of non-farming activities in rural areas.

Besides, the modern business environments are changing ever more rapidly, making it
aincreasingly difficult for small scale enterprises to compete the markets; it is time to envisage
new ways to facilitate these enterprises and take advantage of their potential for broadening the
base of development (Adams, 2010). Despite vast potential for non-farm activities in the
Ethiopia, there are problems such as negative perception of the community, outdated methods of
production, lack of improved technology and skill, and lack of business start-up budget. There is

2
also lack of pertinent research to study the effect of non-farm activities on farm production and
to identify the major problems that hamper the non-farm sector (WB, 2008).

Hence, this study is conducted in four kebeles of Cheha wereda of Guragie zone, which is
located in the SNN Regional State where most of the people doing agriculture activities and
other rural house household doing non farming activities. Consequently, for the expansion of the
rural non-farming and diversification of income are desirable because it gives individuals and
households more options to improve their livelihood and to improve their own living standards.
Therefore, this study was undertaken to analyze the situation, the main determinants of non-farm
activities participation and identified the main non farm activities in the area.

1.2. Statement of the Problem

Ethiopian peasant economies are characterized by heavy demographic pressure on small and
fragmented farmland, and iniquitous land distribution structures; agriculture alone cannot solve
the problems of rural unemployment and underemployment (Tasew, 2007). Nonetheless,
Ethiopia is a rural and agrarian society where nearly 85% of the population is directly dependent
on agriculture and livestock for their livelihood. Agriculture accounts for about 50% of the GDP
and 90% of the total foreign exchange earnings. However, because of the natural and
socioeconomic problems, Ethiopian farmers are suffering from instability of income. Hence rural
non-farm activities can play an important role in improving the well-being of the rural population
(Yenesew et al,. 2015).

Despite the different measures taken by governments, the national economy still relies on the
agricultural sector. This sector is characterized by low labor productivity, a declining farm size
(an average of one hectare per household) and subsistence farming, soil degradation, inadequate
and variable rainfall, tenure insecurity, weak agricultural research base and extension system,
lack of financial services, imperfect agricultural markets and poor infrastructure Nevertheless,
focusing on agricultural production alone may not be enough to combat the population’s
vulnerability to shocks and the resulting food insecurity. Therefore, non-farm activities as
sources of alternative income may be of paramount importance for people’s livelihoods in the

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face of climate change, particularly in drought-prone areas and agriculture dependent areas of the
country (Sosina et al., 2011).

Consequently, non-farming activities are important for alternative source of income generation,
reduces agricultural risk in rural households, absorbs large amount of labor force and it will give
chance for the flourishing of small, medium and large industries in the country. Even though the
efforts taken to support and due attention in Ethiopia for non-farming activity is not yet good as
of its paramount important (Yenesew et al,. 2015).

However, non-farming activities not only lack of attention at national level but also at more
severs at different level. In such case, promoting non-farming activities is very essential to
reduce such recurrent problems specific to the areas but not yet. In Ethiopia the identification of
the major factors affecting the farmers participation in non-farm activity has got limited attention
from the research perspectives and most of the related scientific studies conducted so far was
area and field specific that were not represented the whole farmers throughout the country and
the whole aspects of the non-farming activities most commonly practiced within the country.
Thus, this research is targeted to identify the determinates that would seriously affect the farmers
participation in the non-farm activity and major type of non-farming activities practiced in the
study area and eventual provide the relevant recommendation that would give a base line for
policy directions on the finding to minimize the limitations on promoting non-farm activities
specific to the study area.

1.3. Objective of the Study

Generally, this study was designed to identify the determinants of farmers participation in non;-
farm activities in Cheha Wereda.

The specific objectives of this study were to:

 Identify the determinants of farmer’s participation in non-farm activities at household
level.
 Identify the most common types of non-farm activities commonly practiced in the
study area.

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1.4. Research Question

• What are the major factors determining the farmers participation in non-farm activities?
• What type of non-farming activities are commonly practiced by the farmers in the study
areal?

1.5. Scope and Limitation of the Study

Eventhough, there are a number of areas which needs attention, the study was focused only on
identifying the major determinants of farmers participation in non-farm activity in the Gasore
Kebele of Cheha Wereda; mainly because this the scientific studies conducted so far in the area
in related problem was very unattractive. On the otherhand, eventhough there are a number of
areas which needs similar attention in similar problem, due to different limitations this study was
only tried to look the status in the Gasore Kebeles. Thus this tudy was primarily focused on
analyzing the situation and types of most common non-farm activities practiced in the area and
the main determinant of farmer’s participation in non-farm activities specific to the stated
kebeles of the woreda mainly because of limitation of availability of resources and time to
undertake.

1.6. Significant of the Study

Primarily, this study was expected to give significant entry point for further policy interventions
on improving farmer’s livelihood through diversifying their income sources in the study area.
The study can also give direction for the policy makers on developing the appropriate policy
measures on the factors affecting farmer’s participation in non-farm activities. In addition, this
study was also expected to give clue information for the farmers about the external and internal
factors affecting their farm income and give direction on how to improve their farm income.
Moreover, the results of the study and the conclusions drawn are useful for other potential areas
that have similar non-farming activities and similar ways of living. The document can also serve
as a reference for other researchers who embark on similar or related problems in other parts of
the country.

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 CHAPTER TWO

2. REVIEW OF LITERATURE

2.1. Definition and Concepts

According to Gordon (2008) defined non-farm activity as comprising all those non-agricultural
activities which generate income to rural households (including income in-kind and remittances),
either through waged work or in self-employment. In some contexts, rural non-farm activities are
also important sources of local economic growth like tourism, mining and timber processing).
Moreover, he values the rural non farming activity is of great importance to the rural economy
because of its production linkages and employment effects, while the income it provides to rural
households represents a substantial and sometimes growing share of rural incomes. Often this
share is particularly high for the rural poor. There is evidence that these contributions are
becoming increasingly significant for food security, poverty alleviation and farm sector
competitiveness and productivity.

Similarly, (Ellis, 2003) rural non-farm economy is defined as being all those income-generating
activities (including income in-kind) that are not agricultural but are located in rural areas. Non-
farm activities are that activity that sources of income by doing nonagriculturalactivities. non
farming activities such as metal work, petty trading, pottery, masonry, carpenter and wood work.
Thus, non-farm activities are those activities that are carried out by the household members not
on their own land. Consequently, to mention some of those non farming activities which are
mentioned by different authors are like processing such as preparation and selling of food,
donkey carts and renting livestock for transportation purpose i.e. donkey and camel,
domesticlabor, daily engagement in labor work and migration for season work, petty trading,
pottery, masonry, carpenter.

Start (2003) defines the rural non-farm economy as being all those activities associated with
waged work or self-employment in income generating activities that are not agricultural but are
located in rural areas. Thus, non-farm activities might include manufacturing (i.e. agro-

6
processing) and be accumulative (e.g. setting-up a small business), adaptive, switching from cash
crop cultivation to commodity trading (perhaps in response to drought), coping (e.g. non-
agricultural wage labor or sale of household assets as an immediate response to a shock), or be a
survival strategy as a response to livelihood shock. The rural non-farm economy cannot be
considered homogeneous; rather it is characterized by its heterogeneity, incorporating self-
employment, micro and small-medium sized enterprises and traders.
According to Tassew (2007), a non-farm activity in which farm household participates is
categorized into wage employment and self-employment activities. Three types of wage
employment can be distinguished, namely paid development work, manual non-farm work, and
non-manual (skilled) non-farm work. Paid development work involves jobs in community micro
dam construction, community soil and water conservation works such as construction of terraces
and a forestation, and other community work done under the food-for-work program. Manual
non-farm work is an activity in which farm households work for private and public construction
companies in urban and pier-urban areas. Non-manual (skilled) non-farm work involves masonry,
carpentry and cementing in public and private construction sites. Non-farm self-employment
comprises mainly petty trade, transporting by animals on their back, stone mining, pottery and
handicrafts, selling of wood and charcoal, local brewery and selling of fruits.

Non-farm activities include all secondary and tertiary sector employment of both permanent and
casual nature. Since these activities are quite diverse, a number of different terms are used in the
literature to refer to non-farm employment. Broadly speaking, non-farm activities in the rural
areas can be divided into the following categories (Gebrehiwot and Fekadu, 2012): such as
Small-scale industrial activities are food processing (flour milling, oil processing, soap making
and food processing), Cottage industries (handicrafts, spinning of cotton or wool, cloth weaving
and dying, pottery, leather tanning and distilling local), Artisan activities (blacksmiths, masonry,
wood work/carpentry, house construction, repair services and fabrication of farm tools) and
Commercial activities (trade and transportation.

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2.2. The Contribution of Non-Farm Activity for Farm Income

Non-farm activities have become an important component of livelihood strategies among rural
households. Different studies have reported an increasing share of non-farm income in total
household income, Start (2011)The reasons for this observed income diversification include
declining farm incomes and desire to insure against agricultural production risk (Ellis, 2003). As
studies in Africa during the 2008s, 2007s and 2009s shows that the share of income earned in the
non-farm sector ranges from 22 to 93% of the total rural household’s incomes. The simple
average share over the 25 case studies is 45 %. Small enterprise studies show similar figures
(Bishop, 2014). Estimate that 20-45 % of full-time employment of rural household is undertaken
in small non-farm firm, and 30-50 % of rural incomes come from these activities. Rural non-
farm income is also the backbone of the economy of numerous small towns scattered throughout
the countryside as well as an important source of income and employment 19 for many of the
poor. Seen in this light, the rural non-farm economy will play an important role in determining
the future prospects for employment growth and poverty alleviation in Africa (Barret et al.,
2004). In addition, the combination of farm and non-farm work provides a hedge against
fluctuation in the price of agricultural commodities related to variable rainfall and erratic world
market (Swindell and Lliya, 2011; Destaw 2003).

2.3. Non-farm Activities in Ethiopia

Lanjouw (2009) and Van den Berg (2012), the current study considers rural nonfarm activities as
all economic activities in rural areas except primary activities (crop and livestock production,
fishing and hunting). Remittances, however, are excluded as they do not represent an income
from the supply of household resources (Lemi, 2009). The types of RNFA rural dwellers could
get income from and/or complement their agricultural incomes in Ethiopia are quite
heterogeneous and may generally of wage employment and self-employments. Woldehanna
(2002) identified such wage employment activities as paid community development work or
food-for-work, farm work and manual work in construction, masonry and carpentry; and self-
employment activities like small trading, transporting goods by pack animals, selling fuel-wood,

8
making charcoal, selling fruits, making pottery and handicrafts and stone mining. In many
instances, it is observed RNFA in Ethiopia are highly related with the agricultural sector.

Due to the insufficient land resource to absorb the household’s full labor force and the rain fall
pattern variability, the smallholder farming households in Ethiopia are becoming unable to meet
the annual family food requirements. As a result, they are obliged to engage in
different non-farm activities like daily labour, firewood selling, petty trading, and handy craft
activities (like weaving, blacksmith, and pottery works) to supplement their fragmented land
based livelihoods and to cope up with the agricultural risks (Kebede et al,. 2014).

The expectation that achieving the goal of reducing poverty only through increasing agricultural
productivity and redressing the issues of access to key agricultural resources without non -farm
livelihood diversification could not be successful in Ethiopia (Emanuel, 2011). For these reasons
there is a strong consensus that any development intervention to improve the livelihood and food
security situation of the rural poor need to take agriculture along with the non -farm livelihood
activities like weekly local market trading and group laboring renting service, .

World Bank (2008) indicated that in Ethiopia the poor to survive tend to diversify in the form of
daily wage laborer, and to mitigate production risk of rain fed agriculture, choose low risk but
low return non-farm activities which contribute to poverty trap. Furthermore, Reta and Ali (2012)
indicated that in rural Ethiopia if there had not been other sources of income apart from
agricultural production, the land scarcity by the farmers coupled with agricultural risks could not
generate enough income to feed household members and they cannot fulfill household needs.
This suggests that the necessity of non/off-farm diversification in rural Ethiopia.

From the point of view of reducing poverty and food insecurity in rural Ethiopia, it is extremely
important to reduce vulnerability of the poor through diversification of the sources of their
livelihoods. Thus, it needs the analysis of the livelihood diversification opportunities available in
rural areas, the productivity and returns offered by such activities, especially those in which the
poor are engaged, and an identification of the factors that may affect the ability of the poor to
raise productivity and returns in their activities (Gebrehiwot and Fikadu, 2012). Furthermore, it

9
is crucial to recognize that rural people have their own strategies to secure their livelihoods
which vary from household to household depending on numerous factors such as their socio-
economic status, education and local knowledge, ethnicity, and stage in the household life cycle
(Wagayehu, 2004).

2.4. Determinants of Farmers Participation in Non-Farm Activities

Many factors influence the participation of farm households into non-farm activities, including
government intervention. If governments want to foster their participation, they would need to
make sure that policies in place, whether sectorial or broad, do not put unintended obstacles in
the way of diversification. Providing the services needed to foster business in rural areas - such
as telephone and internet coverage, training and information - also help to create an environment
conducive to diversification (OECD, 2009). Prerequisites for encouraging private investments
include improving the business climate, and providing business development and financial
services suited to the needs of rural entrepreneurs. Acquiring a labor force with appropriate skills
is crucial (IFAD, 2010).

Motivations for engaging in non-farm activities are not always purely financial, but also reflect
societal changes. In terms of the farm household, a financial motivation appears to be the
strongest driver for diversification in general, although social motivations are shown to be
important for farm tourism. However, it appears that weak business skills are limiting the extent
of diversification. Women play a more important role in the diversification of the farm into non
farm activities than in the primary agricultural activities (OECD, 2009). In Ethiopia, even
though, the smallholder rural farm households are involved in diverse livelihood activities, the
households access to different income sources beyond agriculture vary across the ownerships of
different livelihood assets. Moreover, the participation of smallholder farming rural households
into non/off-farm activities is determined by complex and yet empirically untested factors in the
study area.

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2.2 Empirical review

According to Jayne et al,. 2010 studied the role of non-farm activities in rural households in
Mexico. The result shows that participation in non-farm activities helps reduce poverty and
contributes to greater equality in the distribution of income. Results of the Multinomial
Estimation Method (where no participation in non-farm work is the choice comparison) show
that education, ethnic origin and regional availability of non-farm employment are found to
affect participation in off-farm activities. Education helps the farm households in the study area
to participate in the more remunerative off-farm activities. A study by Reardon (2010) also
shows that the effect of education is found to be different depending on the type of off-farm
activities. Similarly, land scarcity and access to roads have an effect on the participation decision
in non-farm employment. A study undertaken in four districts of Pakistan by Rijkers, B. and
Söderbom Teal (2008) indicated that education raises non-farm productivity and induces rural
Pakistan households to shift labor resources from farm to off-farm activities. One additional year
of schooling for all adult males raises household incomes by 8.9%. The other human capital
variable, health, has also a positive effect for males but the result is not significant for females in
rural Pakistan.

Emanuel (2011) in Ethiopia undertook a survey of the Agricultural Wage Employment and Rural
Non-Farm Employment in 2007. The result of the logit regression analysis shows that the
probability of working for wage is lower for literate households than illiterate ones. The reason is
that casual labor is generally perceived as a low status work by the public and more so by
educated people. He also tried to identify common non farm activities, accordingly he revealed
that hand crafts, local trading were the most common non-farm activities in Ethiopia. Similarly,
Woldehanna (2000) tried to determine the impact of traditional and modern education on the
supply of labor for off-farm wage employment in Tigray and reached the same result (negative
sign). He argued that higher education increases the productivity of the individual on the farm or
in the household more than it increases the productivity in off-farm employment or off-farm
employment in the rural areas of Tigray may not require education at all and hence there is no
special demand in the labor market for relatively educated farm households. On the other hand, a
study carried out by Mohammed (2011) in Naeder Adeit Woreda of Tigray revealed that

11
education is one of the effective instruments in promoting non-farm activities in rural areas. His
research also shows that farmers with more farm resources are less attracted to non-farm
activities. According to his result selling tella and tej, participating on local weekly market, and
working as daily labor to landlords are the main non-farm activities in the area.
Wassie et al., 2008 constraints to the development of small and micro enterprises can be
categorized as: general infrastructure problem and firm-specific financial and economic
problems. The infrastructure problem arises from the low quality and insufficient supplies of
roads, electric power and telephone lines. In cottage handicrafts and small scale manufacturing
enterprises, the major problem is lack of sufficient initial capital. The other problem is lack of
adequate skills to start the enterprise for cottage manufacturing enterprises and lack of supply of
raw materials and working premisesHe confirmed that the farmers participation in weekly
market for small trading, pottery, hand craft, and selling Tella and Tej was the most common non
farming activity in the area.

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 CHAPTER THREE

3. RESEARCH METHODOLOGY

In this part of the research, the study area and the research methodology to be applied throughout
the study process are briefly explained. Besides, the definition and hypothesis for input, output
and different variables are clearly described.

3.1. Description of the Study Area

Cheha Woreda is found in Gurage Zone; Southern Nations Nationalities and Peoples Regional
state of Ethiopia. It is bordered in south by Enemorina Eaner Woreda, Guraghie zone, in west by
the Oromia Region, in north by the Wabe River which separates it from Abeshge and Kebena
Woreda of Guraghie zone, in the east by Ezha Woreda, Guragie zone, and in the southeast
by Gumer and Geta Woreda of Guragie zone. The administrative center for Cheha Woreda
is Emdibir which is 195km far from Addis Ababa and 40 km far from the Wolkite town, the
capital of Guraghie Zone (GZSA, 2014).

As it had been indicated in the same source, the altitude in the Woreda ranges from 1710 to 2800
m.a.s.l. The mean annual temperature of the Woreda ranges from18oC to 27oC. The climate of
the woreda is classified in to two agro-climatological zones: dega (20%) and (80%) woyina dega.
The average annual rain fall of the woreda ranges from 900 mm to 1500mm.

According to Cheha Woreda Office of Agriculture 2014 report, the Woreda covers the total land
area of 69,764 ha classified in to 42 kebeles (39 rural and 3 town kebeles) of which most of them
are participated in non-farm rural activities. Woredas has the maximum area under agricultural
activities, however to the same extent there are a large number of households who are
participating in different rural non-farm activities.

According to the population projection reports of CSA (2010), the total number of rural
household in 39 rural kebeles of the woreda is 18, 088, out of these 15, 047 are male headed and

13
3041 are female headed. The total population of the woreda is 137,665 out of which 67509 (49%)
are male and 70,156 (51%) are female.

According to Cheha Woreda Office of Agriculture 2014 report, agriculture is the main stay of the
Woreda and hence it provides the largest share of the livelihood for the population. The Woreda
is characterized by mixed farming system where crop and livestock production are the main
activities and most households are participated in different rural nn-farm activities like daily
labor work, small trading mainly on the weekly markets in the Woreda and other local non-farm
activities. However, most of the rural households livelihood is still hand to mouth and not
satisfactory even to feed their families mainly because of the agricultural sector is less effective
and subsistence in its nature and characterized by lack of access to modern agricultural
technologies, absence of appropriate market, dependency on rainfall and lack of small-scale and
large scale irrigation practice resulting in very low productivity.

Figure 1: Geographical map of the study area

SNNPRs
Source: GIS computation from Solomon A (2016)

14
3.2. Research Design, Target Population and Sampling Frame

The target population of the study was the current Number of rural households in the study area
who directly involved in farm and non-farm activities in the Woreda. The sample population of
the study includes both households who are participants and non-participants on the non-farm
activities currently. The lists of households within the Cheha wereda of Gurage zone were used
to select households to be incorporated in the study. After making a pilot research assessment on
the study area, the questionnaire was prepared by the researcher through incorporating the entire
necessary variable and questions. After making a highlight review on the printed questionnaire
and making minor refinements the questionnaire was distributed to the trained enumerators to
collect the data and administered by the researcher. After collecting the data from the
respondents, it has been proposed to enter in to STATA software and analyze using both
descriptive and econometric methods However in the current status it is impossible to collect the
data from the respondents. Therefore, now this study had been used secondary data and review
related studies in order to give the appropriate conclusions and recommendations accordingly.

3.3. Data Type, Source and Methods of Data Collection

From the beginning the for this study it was designed to use both primary and secondary data
from different sources were used. It was targeted to take the primary data on the household’s
engagement status, socio-economic, demographic, institutional, and physical and other factors
were collected through interview of questionnaire which has been administered by trained
enumerators. However due to shortage of time and the existing problems in country that we all
know, it is impossible to collect and use primary data for this study. Therefore, this study was
conducted using only secondary data from different relevant and important sources. Secondary
data that could substitute the primary data were obtained from review of relevant sources such as
published documents in related problem, books, Journals, Zonal and Woreda level published and
unpublished relevant official reports and other relevant organizations current report on related
issues.

15
3.4. Sampling Procedure and Sample Size Determination

3.4.1. Sampling Procedure

To select representative samples for this study, multi-stage sampling techniques was employed.
In the first stage, Cheha Woreda was selected purposively as it is one of the areas where farmers
most likely participated in different non-farm activities in the zone. In the second stage, four
kebeles namely Dubisa, Eiwan, Jato and Gassore were selected randomly.

In the third stage, four representative kebeles were selected randomly. Finally, the list of
participant and non-participant households in each of four kebeles was prepared separately and
sample households from each of the sample kebeles were selected randomly based on the
probability proportional to the number of households in respective kebele. Based on this multi-
stage sampling procedure, a total of 144 households were randomly selected for an interview.

3.4.2. Sample size determination

Due to the fact that the sample frame of the study has two categories namely the households who
participate in non-farm activities and who did not participate group, some degree of variability in
the population is expected to be happen; Cochran (1977) formula was employed to determine the
size of sample for this study. For determining the size of samples representing large, infinite and
heterogeneous population, Cochran (1977) formula comparatively minimizes the sample size
related biasness and hence it is preferable (Cochran, 1963:77). The formula can be specified as:

t
n= (1)

Where, Z is the abscissa of the normal curve that cuts off an area α at the tails (1 – α equals the
desired confidence level, e.g., 95%). The value for Z is found in statistical tables which contain
the area under the normal curve, e is the desired level of precision, p is the estimated proportion
of an attribute that is present in the population (Expected variability in the population), and q is
1-p.

16
Considering 95% of the confidence level (z= 1.96), 40% estimated proportion of an attribute in
the population (p= 0.4) and 8% level of precision (e) the sample size for this study can be
determined as:

th ft‫ ݿ‬ft
n= ftf
= 144.06 ≈ 144

This method of data collection helps to easily capture respondents’ motive, feeling and
individual’s idea of the subject matter under study. I use purposely among the result obtained 40
households, which directly involved on the activities selected.

3.5. Methods of Data Analysis

Primarily, to address the objective of this study both descriptive and econometric methods of
data analysis were proposed to use. For descriptive analysis mean, standard deviation, frequency
and percentage was used. In the econometric analysis, logit model was used to identify
determinants of households participation in non-farm activities in Cheha woreda. However due
to the absence of primary data collection from the target population, currently there is no any
data collected from the proposed respondents to be analyzed using specified descriptive or
econometric methods.

Specification of the model

Choosing an appropriate model and analytical technique primarily depends on the type of
variable under consideration and the objectives to be addressed (Gujrati, 2004).

Econometrist Model

The dependent variable of the study is binary taking values of 1 if the households is participated
in the non-farm activity in the last production year and 0 otherwise. Probit or logit models are
the two computing and most commonly used model in such impact studies having binary
dependent variable. The results obtained from the two models are very similar since the normal
and logistic distributions from which the models are derived are very similar. However, logit

17
model is preferred for this study and be used to identify the determinants of sampled households
decision to participate (Rosenbaum and Robin, 1983). The reason behind preferring logit model
over the probit is that, logistic distribution (logit) is also more preferable than the others in the
analysis of dichotomous outcome variable like this adoption decision, in that it is extremely
flexible and easily used model from mathematical point of view and results in a meaningful
interpretation, which also resolves the problem of heteroscedasticity. Moreover, the model is
mathematically convenient and simple and it can better resolve the problem of heteroscedasticity
(Greene, 2003).

Following Gujarati (2004) the logit model can be specified as:

Pi = E(Yi=1/Xi) = F (α + βxi) (2)

= + α+βxi

= +
, where Zi= α + βxi-Ui

= +
, the cumulative logistic distribution function.

Where Pi= P(Yi=1) is the probability that the household’s participate in non-farm activities
Xi = are different factors that affect household’s participate in non-farm activities
α is the constant term.
βi’s are the coefficient of parameters.

The estimation of the model is, first the probability of non-participant is given by:
1- Pi = 1- +
(3)
+
= = =
Hence, Li = ln〔 〕=Zi= α + βxi Ui, Where Li is the log of odds ratio.

The model can therefore be written as: P(Y=1) = F(Xi) where Xi is the explanatory variables to
be considered as the determinants of the household’s participate in non-farm activities

3.6. Definition of Variables and Working Hypothesis

In this section, the variables expected to affect the household’s participation in non-farm activity
and their respective hypothesized relation with the dependent variable is being described and
hypothesized accordingly.

18
Dependent variable-The dependent variable is a dichotomous variable. It will represent in the
model by 1 for those who participate on non-farm and 0 for those who not participate on non-

farm activities.

Independent variables: Based on empirical studies, the independent variables in this study are
the determinants of non-farm work participation. The following variables were taken to identify
determinants of non-farm activities participation of sampled households.

Age of the household head (AGE): - Age is an important factor for agricultural production in the study
area. As the age of the household head increases the farmer acquires more knowledge and experiences
with possible positive impact on participation of off-farm activities.

Sex of household head (SEX): - with regard to farming experience and access to technology
males are better than female farmers. Then, sex was expected a positive impact on off-farm
participation.

Family size: This refers to the number of individuals living in a household. Having more people
living in a household indicates a greater burden on the actively working individuals. So that, it is
hypothesized that less family size are expected to be less active and hence rely more on farm
than non-farm income. This is defined as the larger families, is expected to have a positive
correlated with non-farm participation. The structure of rural families plays a significant part in
determining access by individuals to non-farm opportunities. Reardon (2009) observes that
family size and structure affect the ability of a household to supply labor to the non-farm sector.
Larger families and those with multiple conjugal units supply more labor to the rural non-
farming sector, as sufficient family members remain in the home or on the farm to meet labor
needs for subsistence. Oladimej et al., 2015 applies the same logic to migration opportunities,
observing that extended family structure influences access to migration. In this case, the longer
absences involved make it all the more important that those remaining in the home are able to
supply the basic labor required for subsistence.

19
Education (EDU): - agricultural production technologies are always coming up with better
knowledge. Evidences in different literatures showed education has positive impact on nonfarm
participation. Then, level of education was expected a positive impact on non-farm participation.

Total land size (LADSZ): As the cultivated land size increases, provided other associated
production factors remain normal, the likelihood that the holder gets more output is high. Then,
the study hypothesized that participation on off-farm activities and large cultivated land size are
positive relationship.

Irrigation (IRRIG): - It is dummy variable taking value 1, if the farmers used irrigation and 0
otherwise. Irrigation is one of the modern technologies that enable farmers to produce during off
seasons of the year where there is no rain which lead farmers no to have free time to engage in
other non-farm activities. Therefore, this study hypostasized that access to irrigation is is
expected to affect the households participation in non-farm activity negatively.

Total livestock unit (TLU): - it is the total number of livestock holding of the household
measured in livestock unit. Livestock play a major role in food security. Therefore, it expects
livestock holding is a positive impact on participation of off-farm activities.

Household Asset in Birr (ASSET): total household owned being a proxy for farmer‟s resource
endowment, those sample farmers with large household asset have better chance to earn more
income and then a household able to participate on off-farm participating (Sanchez, 2005).

Access to Credit: It is hypothesized that less credit available expected to be less active on non-
farm activities. Which is defined as the more credit available, is expected to have a positive
correlated with non-farm participation? It is Dummy variable that takes the value 1 when the
household takes loan and 0 otherwise. Park and Kerr (2009) cites the results of a four-country
study in Africa (Reardon, et al., 2008) where 30–84% of rural industries complained of poor
access to credit – next in importance to lack of infrastructure inputs and markets. Land is often
required as loan collateral and this can exacerbate income inequality associated with rural non-
farming activity. Reasons for market failure in credit include: the lender does not know the

20
default risk of each potential borrower and to collect this information is costly; moreover, there is
an associated moral hazard problem that rural credit programmers may attract borrowers with no
intention to repay.

Frequency of extension contact (EXTN): It is a continuous variable which measures number of

contacts between extension agents and single farmer per year. Farmers that have frequent contact
with extension workers is expected to have better access to information and non-farm activity
type and profitability that could improve their income (Maddala, 2002). It is hypothesized that
household heads that have more contact with extension agents were expected to be higher
probability of participating in non-farm activity than those having less contact.

Training (TRN): It is a continuous variable which refers the number of training available for
farmers per year. Training is an important tool in building the managerial capacity of the
households to use their limited resources for multi purposes. It enables household to identify the
basic principles to manage their time appropriately and to engage in attractive activities
accordingly (Kebede , et al., 2014). Therefore, it was hypothesized that households who trained
more are expected to be better participant than those who trained less or did not trained.

Credit use (CRDT): It is a dummy variable which represents whether the households were used
credit or not during the last 1 year production season. It is represented as 1, if the farmer has used
credit and 0 otherwise. Credit service is an important source of financing and it enables the
smallholder farmers to in different non-farm activities that would increase their farm income
(Taylor et al., 2009). It was hypothesized that farmers who have used credit sources are more
participant than their counterparts.

Agro-ecology (AG-ECO): This variable refers to the area and its climatic and weather features
that the households were located. It is a dummy variable that can be represented as 1 if the agro-
ecology of the households is favorable and o otherwise. In this case it is hypothesized that, the
households who are residing in a more favorable climatic and geographic environment, gives rise
to more opportunities to diversify income or participate in non-farm employment.

21
Table 1: Determinant variables and hypothesized relation with dependent variable
Variable Symbol Measurement Effect on
Dependent Variable
Household Participation (HPNFA) HPNFA 1 if participate, 0, otherwise

Explanatory Variables

Age of the household head (AGE) LAND Year +ve

Sex of the household head (SEX) SEX 0, if male 1, if female +ve
Education of the household head EDU Year +ve
(EDU)
Land size (LADSZ) LADSZ Hectare -ve
Family size per household (FAMSZ) FAMSZ Number +ve
Irrigation (IRRIG) IRRIG Year -ve
Total livestock unit (TLU) AGE Year +ve
Asset in Birr (ASSET) ASSET ETB +ve
Access to credit (CRDT) CRDT 1, if yes 0, otherwise +ve
Frequency of extension contact EXTN Number +ve
(EXTN)
Training raining (TRN) TRN Number +ve
Agro-ecology (AG-ECO) AG-ECO 1 if favorable 0 otherwise +ve

22
 CHAPTER FOUR

4. RESULT AND DISCUSSION

In contrast with the usual ways, this study in this part is going to assess and review different
related literatures conducted so far in the same problem and give a general discussions about the
variables and the research outputs. This is because, due the existing problems of the country we
have shortage of time to collect the actual data from the respondents in the study area.

4.1. Determinants of the Household’s Non-farm participation

Age of the household head (AGE)-According to the finding of Ayana and Ermias (2019) is
positive and significantly affects the decision of the household to participate in non-arm
activities. His analysis result indicated that coefficient of age in the marginal effect of the probit
model can be interpreted that a one year increase in the age of the household head, increases the
probability of participating in non-farm activities by 0.0164. Bishop (2014) also proved that the
age of the household head was significant positive relation with their participation in non-farm
activities. Moreover, Ashebir and Negussie (2016) confirmed that, the households’ heads with
one more year of age are more likely to refrain from joining the nonfarm wage jobs compared to
their younger neighbors. They concluded that a one year increase in age decreases significantly
the probability of involvement in non-agricultural wage jobs than farm works by 7% which is
significant at 1 % level of significance. On the other hand Oladimej et al, (2015) confirmed that,
the age of the household head have no significant effect on the households decision to participate
in non-farm activities. This may implies that Age of the household head different effect on the
households participation decision depending on different factors. It can be used as a proxy for
farmer’s experience which might have significant and positive effect on the probability of
participating in non-farm activities. This suggests that participation in non-farm activities are
easy for higher age household head Yenesew (2015)

Sex of the Household head (SEX): Yenesew et al,. 2015 revealed that sex of the household
head have significant effect at 5% level of significance with the marginal effect of 0.54. He

23
confirmed that the male headed households are more likely to participate in non-farm activity
than Female headed households. Ashebir Negussie (2016) confirmed with their analysis that, the
likelihood of participation in nonfarm wages jobs than farm works was higher for male
household heads compared to females by 42%. It was significance at a 10% with the margina;l
effect of 0.419. Ayana and Ermias (2019) also concluded that male headed households would be
about 41 percent more likely to engage in non-farm activities than those who are female headed
which is significant at 1 % level of significance with the marginal effect of 0.405. The rationale
behind this result is that male headed households have more opportunity to engage in off-farm
activities than female headed households who are traditionally more tied to duties at home.

Educational level of the household head (EDU): Ashebir and Negussie (2016) confirmed that,
completing elementary education improved the probability of participation in rural non-farm
self-employment more than farm employment by 8.4% compared to those who were less
educated, at 1% level of significance with the marginal effect of 0.05. In the context of
household livelihood strategies, this suggested that in households adopting mixed farming non-
farm strategies, members with low level of education were more likely to remain on the farm
than those who are less educated. They confirmed that the more the households are educated the
more they are likely to participate in non-farm activities. Oladimej et al, (2015) also confirmed
that the level of education has significant positive effect on the households participation dicission
on non-farm activities at 5 % level of significance with the marginal effect of 0.362. On the other
hand Ayana and Ermias (2019) found that the level of education has no any significant effect on
the far,mers level of participation in non-farm activities in Woliata Zone of Ethiopia. This
indicated that the effect of the level of education of the household head on their participation has
different effect will be positive or null as confirmed from the literatures reviewed so far.

Family size (FAMSZ): Based on the reviews made in this study the number of peoples within
the family was one of the variable thst were significantly affecting the haouseholds decision on
non-farm activities. Accordingly, Oladimej et al, (2015) argued that the number of household
members have significant positive effect on their participation in different non-farm activities at
5% level of significance with the marginal effect of 0.362. They concluded that as the household
member increase by 1 percent the probability of the household’s participation in non-farm

24
activity increases by 36.2percent. The same finding was forwarded by Ashebir and Negussie
(2016); confirming that the households decision to participate in non-farm activity and their
number of adult household members have positive relationship. They confirmed that, as the
number of productive age group (14-64 years of age) was a highly significant determinant for
participation in non-farm occupations, especially for non-agricultural self-employment (with 5%
significance level). Addition of one adult member in the household resulted in a 13% and 5.2%
increase in the likelihood of participation in nonagricultural wage and self-employment activities
rather than farm activity. This implies that having a larger household, thereby having a greater
labor force, gives the household the flexibility to distribute work between the farm and
nonagricultural employment, and therefore have a higher capacity of diversification.

Total land Size (LADSZ): According to the finding of the researches conducted by Ashebir nd
Nigusie (2016) landholding influenced the choice as expected. The negative sign for non-
agricultural wage jobs showed that farmers were participating in such nonfarm activities for push
reasons. This implied that, most households engaged in low earning jobs as the small farm size
forced them to look for other sources of income for subsistence. Access to one unit of additional
land decreased the probability of participation in wage job relative to farm works by 33% at 10%
significance level. However, their study confirmed that, the size of land holding was in favor of
pulling the household to start own business than farm works with 10% significance level. A unit
change in the size of land raised the probability of participation in own business in contrast to
farm works by 23%. The same result was found by the study conducted by Bishop (2014) that
the size of the land owned by the household have significant negative effect on the households
participation in non-farm activities wage and small business activities which is significant at 5%
level of significance with the marginal effect of 0.723. Yenesew et al,. 2015 households with
large land size are participated less in non/off-farm livelihood diversification strategies and
participated more on on-farm only livelihood strategy. According to their finding, a plot of
increase in land size of the household will lead the households to decrease their participation in
non.-farm activity by 21.9%. He also argued that this effect will be due to the land endowments
play a key role in explaining both survival-led and opportunity-led diversification strategies
(Reardon, 1998).

25
Access to Credit (CRDT): was one of the variables that most of the related studies conducted in
different area so far was confirmed to have significant effect on the households participation in
non-farm activity. Accordinly, Ayana and Ermias 2019 confirmed that, having access to credit,
farm income, sex of the household head, age of the household head, possessing mobile phone
and agro-ecological zone are all found to be statistically significant at 1 and/or 5 percent level.
The effect of these variables on household’s participation decision on off-farm activities is
positive. The marginal effect for probit model shows that, citrus paribus, households who have
access to credit would be about 49.5 percent more likely to participate in non-farm activities than
those who haven’t. This may indicate that reducing financial problem of the household through
credit access will encourage them to participate in non-farm activities. Ashebir and Nigusie
(2016) provided the same result that the possibility of getting access to credit solves the liquidity
problem of households because credit helps the farmers buy agricultural inputs and equipments,
thereby raising productivity of farm whose income could shift to nonfarm enterprise
development and also the cash obtained from credit can serve as starting business for new own
enterprises. The effect of this variable emerged as expected in that it influenced the household’s
participation in non-farm activity positively at 10% significance level with the marginal effect of
0.011. A 10% increase in amount of credit would result in 11% increase in the household’s
participation on non-farm activity.

Agro-ecology (AG-ECO): Ayana and Ermias (2019) revealed from their study that the variable
agro-ecological zone is found positive and significant at 1 percent; this result implies that
residents in mid-highland area have a strong incentive to participate in non-farm activities than
those residing in lowland areas of Wolaita Zone. That is, the marginal effect value of agro-
ecological zone shows that, citrus paribus, households who live in the mid-highland area would
be about 35 percent more likely to participate in non-farm activities than those who live in the
lowland area. The finding of Ashebir and Nigusie (2016) revealed that the Agro-ecological zone
of the household have significant negative effect on their participation on non-farm activity. The
hypothesis that residing in a more favorable climatic and geographic environment, gives rise to
more opportunities to diversify income or participate in nonagricultural employment was not
consistent with the finding of this study. It is interesting that the households residing in
unfavorable areas (kola) had higher probability of engagement in rural nonfarm employment (in

26
both categories) than farm activity as compared to those residing in middle land. The unexpected
sign of this variable is probably due to the fact that households in low land areas are pushed to
nonfarm economic activity, especially to a less remunerative unskilled job and low return self-
employments because of the subsistence pressure they face. The same result was reported by
Sosina et al. (2009) in Ethiopia.

27
 CHAPTER FIVE

5. CONCLUSIONS AND RECOMMENDATIONS

5.1. CONCLUSSIONS

According to the reviews made by the researcher of this study Different conclusiolns has been
forwarded. Accordingly, when we look at the methods to be used ton analyze such data included
in this study, most of the reviewed researchers were used logit model and they were argued that
this model is that it is extremely flexible and easily used model from mathematical point of view
and results in a meaningful interpretation, resolves the problem of heteroscedasticity. According
to the analysis results of the reviewed literatures, Age and sex of the household head, Family size,
Educational level of the household head, Access to credit and agro-ecological zone have positive
and significant effect on their participation in non-farm activities. On the other hand, land size of
the households, have negative and significant effect on their participation in non-farm activity.
The review result also confirmed that the male headed households are more likely to participate
in non-farm activity than female headed households. The review result also tried to identify the
major non-farm activities in different parts of the country which are more common. Accordingly,
selling of Tella and Tej, Small trading in local weekly markets, participating in construction as
daily labor, pottery making and hand craft are identified as the non-farm activities that most
commonly practiced in the different parts of the country.

28
5.2. RECOMMENDATIONS

Based on the conclusions drawn following the reviews made by the researcher the following
basic recommendations are forwarded.
In order to engage more farmers in the available non-farm activities, providing better
educational opportunities and adequate access to credit so that they can solve their
liquidity problem for their participation.
Policy makers and researchers need to focus on giving multidimensional supports for the
farmers to manage their resources wisely and allocate their available lands for different
farm and non-farm activities.
Clearly showing and directing farmers about the most effective and profitable types of
non-farm activities and initiate them to participate on it.

29
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 7. APPENDICES

Appendix: 1-Questionnaiers prepared to be interviewed to the respondents

QUESTIONNAIRE

DIRECTION: Give a sign ‘X’ on your choice among the alternatives given and write your
response on the space provided if the question is open.

Dear respected respondents, this interview schedule is designed to collect the necessary primary
data needed to conduct this study which is believed to be important to come up with valuable
recommendation for problems we observed. So the researcher wants to assure you that the data
obtained from this questionnaire can not be used for any other purposes than its academic value.

A. Identification Panel
Date……………. District………….
Name of Village Questionnaire……………. Name of Respondent (optional) ………………..
B. Household Characteristics
I. Sex of respondent
a male female
II age of respondent
26-30

20-25

>30

3. Marital status a. single b. married c. divorce

4. level of education (year)

a. No education v c. first cycle v e. high school v

b. Adult literacy v d. elementary f. others (specify) v

v

5. How much number of families do you have?

v
34
a. Female v b. male v c total
6. What is the primary occupation of the household head?
a. Smallholder Farmer v b. Small Scale Business v
c. Worker (employed) v d. Other (Specify) ________________________
7. Do you have non farming training? a. yes v b no v
8. Is your home is far from major market? a yes
v v b.no
9. How much km Distance of homestead from the major market ? __________km
10. Do you have a credit access? a. Yes v b no v
11. If your answer for Q10 is yes, for which purpose did you use the credit primarily?
__________________________________________________________________________
12.Do you Use agriculture inputs a. yes v b.no v
13 .If your answer is yes, what amount of input do you use?
14.do you have oxen ? a. Yes v b. no v
15.if your answer is yes how much Number of oxen do you have ? a.1 b.2 c.4 d.other
g. Distance of main road from homestead ………………………….
II income sources of family
16. what are the main source of your income?
a crop production v b. livestock rearing
v
III participation of non farming income
17. Did you participate in non farming activity? a. Yes v b. no v
18.if your answer is yes what type of activity do you perform?
a. petty trade v b masonry c.carpenter
d.daily labor v e.tanner v f. pottery
v
g. other activity(stone and mild selling, transportaton)
19. . Why did you to start your non farming activity ?
A. Family tradition v D. Small investment is required v
B. To be self-employed v E. No other alternative for incomes v
C. Brings high income v F. Others (Specify) -------------------------
20.Who initialed and started the non farming activity?
A. Myself v b. other (specify) v
21. is there the relation between farming and non-farming activities in Gasore Kebele ?

v
35
 a. Yes v b no
22.What amount of income generate by participating non farming activity them in the study area?
_____________________________________ETB
23.what seems like the attitude f the society about non farming activity ?
a. It is good v b.it is not good v
24. What seems like the contribution of non farming activity to change the living standard of the
society? a. It is efficient b.it not efficient
c. it is enoughv d.it is not enough v
25. What problems did you face while running in non farming in relation to:
A) Economic factors
· Market v · Finance v
· Technology Infrastructure
v v
· Training ·Raw material & other v
v
B) Social factors
· Public acceptance v
· Attitude toward non arm activity
C) Legal and Administration factor v · Government policy v
26. Did you perform both farming and non farming activity?
a. Yes b.No
v v

Appendix: 2-Determinants of farmers participation ( Ayana and Ermias, 2019)

36
Appendix: 3-Determinants of farmers participation (Bishop, 2014)

Appendix: 4-Determinants of farmers participation ( Ashebir and Nigusie, 2016)

37
Appendix: 5-Determinants of farmers participation (Mohammedawel, 2011)

38