Income Diversification Sources, Constraints, and Measurements: Evidence from Agarfa District, South‑eastern Ethiopia

Abstract

Agriculture is considered a driving force to reduce povertyand food insecurity. However, the agricultural sector hasbeen unable to meet the growing food need of the rural population and it has been influenced by various risks. Although income diversification strategies supplement farmers’ farm production, the extent of households’ income diversification sources and their associated factors are not yet empirically identified in Agarfa District. Thus, this study aimed to measure income diversification strategies and identify factors responsible for the choice of income diversification strategies among rural householdsin the district. The study drew a sample of 150 households using the stratified random sampling technique from three kebeles of the district. Quantitative data were collected by interviews while qualitative data were collected by focus group discussions and key informant interviews. Descriptive and inferential statistics were applied to characterize households’ income diversification strategies. Results show that agriculture has a leading contribution to the total income of households (88.89%) followed by non‐farm (10.12%) and off‐farm activities (0.99%). Furthermore,the results reveal that the mean diversity indexes increase from households engaged in house maid activities (36.67) to households engaged in crop production (38320.00). The study, therefore, concludes that the agricultural sector alone cannot improvehouseholds’ income, ensure food security, and alleviate poverty in the study area. Thus, rural development policies and strategies should focus on promoting income‐generating activities besides agricultural activities in rural areas to improve the overall wellbeing of the rural communities.