Volume 28, No. (4), 2018 (August)
DETERMINANTS FOR INCOME DIVERSIFICATION BY FARM HOUSEHOLDS IN
A. Nazir , G. Li , S. Inayat , M. A. Iqbal , A. Humayoon, S. Akhtar
1* 2 3 4 1 A. Nazir, G. Li, S. Inayat, M. A. Iqbal, A. Humayoon, S. Akhtar
1 College of Economics & Management, Huazhong Agricultural University, Wuhan 430070, China;
2 Department of Dairy Technology, Faculty of Animal Production and Technology, University of Animal and Veterinary
3 Sciences, Lahore, Pakistan; Institute of Agriculture and Resource economics, University Agriculture, Faisalabad,
4 Pakistan. Department of Agricultural Economics, Faculty of Agricultural Social Sciences, Sindh Agriculture University,
Page Number(s):
1163-1173
Published Online First:
August 01, 2018
Publication Date:
August 01, 2018
ABSTRACT
Farmers have numerous ways to tackle agricultural risks and most of them employ the income diversification strategies simultaneously. The present study analyses the determinants of the income diversification decisions by farm households. Data was collected from 400 farm households in Sindh province of Pakistan. Results show that 69 percent farm households were employing off-farm activities as diversification strategy. Business was the most adopted off-farm diversification strategy followed by government service. The marginal effect of probit regression divulged that one-year increase in education level would results in 2.5% escalation in the probability of farmer to go for off-farm income sources. Also, the multinomial probit regression revealed that adults participating in off-farm works coefficient were negative but highly significant in all diversification strategies. Likewise, farming area, dependency ratio and family size are the driving factors for participation in off-farm labour activities. Therefore, some different income diversifications strategies should be developed, by which farmers can earn additionally and smooth their income. Further, low interest credit arrangement should be introduced for the farmers, specifically for the small and marginal farmers to fabricate their own off-farm income producing sources. So that farmers can improvise and earn more benefits, improve their living standard and alleviate poverty as well. JEL: C01, D30, J24, L25, Q12 agricultural sources is increasing. For instance, Fernandez-Cornejo et al., (2007) indicted that almost two
Keywords:
Off-farm income; Credit; Probit regression: Multinomial Probit Regression; Pakistan