Analyzing the determinants of non-farm income diversification of farm households in Peshawar district of Pakistan
The agricultural sector in Pakistan is not well-established to provide full employment opportunities and sufficient income for needed living standard to the rural population. Stagnant agricultural productivity and low returns in farming have led rural residents to look for alternative livelihoods, especially non-farm employment. With this background, the present study is an endeavor to empirically determine the factors of non-farm income diversification of rural farm households in Peshawar district of Pakistan. The study was undertaken in four villages and data was amassed from 196 small farming households by using the multi-stage sampling technique. The data were analyzed using the descriptive statistical measures, the mean of income shares approach and the ordinary least squares regression analysis. The results indicate that in all the selected villages, the pattern of non-farm employment was more or less the same; however, the income from non-farm employment activities had an important contribution towards incrementing the absolute income of farm households. Non-farm income diversification is hence crucial for sustaining livelihoods and an integral dimension for invigorating rural economies. Therefore, the study recommends the promotion of non-farm employment as a good strategy for supplementing the income of small farmers without shifting attention from agriculture.
Ahmed, F. (2012). Exploring the Linkages between Rural Incomes and Non-farm Activities. Journal of Agriculture & Social Sciences, 8(3), 81–86.
Alhasan, (2015). Pakistan Emergency Situation Analysis - District Peshawar. Report available at: http://reliefweb.int/report/pakistan/pakistan-emergency-situation-analysis-district-peshawar-april-2015
Ali, Z. (2014). Peshawar Loses Vast Agricultural Land to Urbanization. DAWN. Retrieved on 24 August, 2015 from http://www.dawn.com/news/1140287
Barrett, C.B., & Reardon, T. (2000). Asset, Activity and Income Diversification among Africa Agriculturalists: Some Practical Issues. In Income Diversification and Livelihoods in Rural Africa: Cause and Consequence of Change. Special edition of Food Policy.
Barrett, C.B., Reardon, T., & Webb, P. (2001). Nonfarm Income Diversification and Household Livelihood Strategies in Rural Africa: Concepts, Dynamics and Policy Implications. Food Policy, 26, 315-331.
Chaplin, H., Davidova, S., & Gorton, M. (2004). Agricultural Adjustment and the Diversification of Farm Households and Corporate Farms in Central Europe. Journal of Rural Studies, 20, 61-77.
Chaudhry, I.S., Malik, S., & Ashraf, M. (2006). Rural Poverty in Pakistan Same Related Concepts, Issues and Empirical Analysis. Pakistan Economic and Social Review, 42(2), 259-276.
Davis, B., Winters, P., Carletto, G., Covarrubias, K., Quinones, E.J., Zezza, A., Stamoulis, K., Azzarri, C., & Digiuseppe, S. (2010). A Cross Country Comparison of Rural Income Generating Activities. World Development, 38(1), 48–63.
DFID – Department for International Development, (2004). Rural Urban Development Case Study – Nigeria. Oxford Policy Management, United Kingdom.
Dimova, R., & Sen K. (2010). Is Household Income Diversification a Means of Survival or a Means of Accumulation? Panel Data Evidence from Tanzania. Working Paper, 122, 1-34. Brooks World Poverty Institute, Manchester.
Ellis, F. (2000). Rural Livelihoods and Diversity in Developing Countries. Department for International Development. Oxford University Press, Oxford.
Giorgi, M. (2001). Rural Non-farm Economy in Georgia: A Pilot Research Report. Natural Resources Institute Report. No. 2677. Department for International Development (DFID)/World Bank Collaborative Program for Rural Development.
Gujrati, D.N. (2004). Basic Econometrics. Int’l Ed. McGraw Hill Publishers, New York.
IFAD – International Fund for Agricultural Development, (2011). Rural Poverty Report. Available at: http://www.ifad.org/rpr2011/report/e/overview.pdf
IRM - Institute of Rural Management, (2012). Labour Market Survey. Exploring & Economic Opportunity through Vocational Skills Training, District Peshawar (Khyber Pakhtunkhwa). Available at: http://www.irm.edu.pk/wp-content/uploads/2012/05/Labour-Market-Study-Peshawar-IRM-2013.pdf
Janowski, M., & Bleahu, A. (2001). Factors Affecting Household-level Involvement in Rural Non-farm Economic Activities in Two Communities in Dolj and Brasovjudete, Romania. Paper presented at the workshop “Rural non-farm employment and development in transition economies. University of Greenwich, London.
Korir, L.K., Legat, K.J., & Njehia, B.K. (2011). The Role of Non-farm Investments in Agricultural Risk Management in Kenya. International Journal of Economic Theory, 3(2), 62-68.
Lay, J., & Schuler, D. (2008). Income Diversification and Poverty in a Growing Agricultural Economy: The Case of Ghana. Proceedings of the German Development Economics Conference, Zurich 39, 1-39.
Maqbool, N. (2014). The Man Who Championed the Cause for Poverty Alleviation: Remembering Dr. Mahbubul Haq. The New International. Retrieved on March, 9, 2015 from http://www.thenews.com.pk/Todays-News-2-262426-The-man-who-championed-the-cause-for-poverty-alleviation
Minot, N., Epprecht, M., Anh, T.T.T., & Trung, L.Q. (2006). Income Diversification and Poverty in the Northern Uplands of Vietnam. Research Report, 145, 1-111. International Food Policy Research Institute, Washington, D.C.
Okali, D., Okpara, E., & Olawoye, J. (2001). Rural-Urban Interactions and Livelihood Strategies, The Case of Aba and its Region, Southeastern Nigeria. Working Paper 4. International Institute for Environment and Development (IIED) 3 Endsleigh Street, London WC1H 0DD, United Kingdom.
Pakistan Agricultural Census Report, (2010). Agricultural Census Organization, Statistics Division, Government of Pakistan. Report available at: http://www.fao.org/fileadmin/templates/ess/ess_test_folder/World_Census_Agriculture/Country_info_2010/Reports/Reports_5/PAK_ENG_REP_2010.pdf
Pakistan Economic Survey, (2013-14). Agriculture – Chapter 2. Ministry of Finance, Government of Pakistan. Available at: http://www.finance.gov.pk/survey/chapters_14/02_Agriculture.pdf
Readon, T., Stamoulis, R., Cruz, M.E., Balican, A., Berdegue, J.A, & Banks B. (1998). Rural Non-farm Income in Developing Countries, special chapter in FAO. The State of Food and Agriculture 1998. Food and Agriculture Organization of the United Nations, Rome.
Ronning, L., & Kolvereid, L. (2006). Income Diversification in Norwegian Farm Households, Reassessing Pluriactivity. International Small Business Journal, 24(4), 405-419.
Sarah, A. (2012). Determinants of rural household income diversification in Senegal and Kenya. In : 6èmes Journées de recherches en sciences sociales SFER-INRA-CIRAD. SFER, INRA, CIRAD, Toulouse School of Economics. Paris: SFER, 18.
Teshome, B., & Edriss, A. (2013). Determinants and Patterns of Income Diversification among Smallholder Farmers in Akaki District, Ethiopia. Journal of Research in Economics and International Finance, 2(4), 68-78.