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Factors Affecting Farm and Non-farm Income of Haor Inhabitants of Bangladesh

M. T. Parvin
Ex-M. S. Student, Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh-2202, Bangladesh

M. Akteruzzaman
Professor, Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh-2202, Bangladesh

Abstract/ Executive Summary:

The study has been conducted to examine the factors influencing farm and nonfarm income of Haor economy in Bangladesh. Dingaputa Haor area of Netrokona district was selected for the present study and a sample of 60 farmers had been taken randomly. The log linear form of Cobb-Douglas production function was chosen to determine the effects of socioeconomic variables on farm income and non-farm income. Apart from this, some descriptive statistical analysis were done to examine the socioeconomic characteristics of sampled households. The estimated results of the regression models revealed that family size and farm size had a significant positive effect on farm income and non-farm income had a significant negative effect on farm income. On the other hand, family size had a positive and significant effect on non-farm income and farm income had a negative and significant effect on non-farm income. To promote the farm and non-farm sector income and strengthening its potential linkages between them, the study mainly recommends increasing efforts on two fronts: first, reforming the institutions responsible for rural development and second, development activities and projects that would enhance farm and non-farm income and the linkages between them.

Keywords: Farm income, Non farm income, Haor

Location: Mohangonj under Netrokona district

Start Date: 00-01-2013

End Date: 00-06-2013

Program Area: Socio-economic and Policy

Non-commodity: Income generation

Objectives:

The objectives of the present study is to document the socioeconomic characteristics and to identify the factors affecting the farm and non-farm incomes of the participating farmers.

Methodology:

Considering the objectives, time, availability of fund and man power for conducting the present research, a two stage sampling procedure was followed. In the first stage, the Upazila namely Mohangonj under Netrokona district was selected purposively where multiple crops, livestock, poultry and fish catching of the different farming systems and also the different non-farm activities were practiced. In the second stage, the samples of 60 farmers were selected by simple random sampling procedure for obtaining the primary data for the study. In addition, the secondary data were collected from BBS, BARC, DAE, DoF, DLS, MoFL and MoA. Focus Group discussions (FGD) were conducted taking at least three from each of the selected group. The present study covered six months period from January to June, 2013. To quantify the effects of explanatory variables on dependent variable there are some econometric models such as linear, semi log, log linear or double log model, etc. But these models are not equally applicable for all cases. In order to estimate the effects of socioeconomic variables on farm and non-farm income, Cobb-Douglas form of production function was chosen on the basis of a best fit and significant result on dependent variable. Many factors affect household income but it is not proper to include all the variables in a model due to theoretical and economic considerations. Here, five important variables were selected and care was also taken to avoid the multicollinearity of the selected variables. For estimating the effects of different variable on farm income and non-farm income, the log linear form of Cobb-Douglas production function is as follows: 1. lnYf = a + b1 lnX1 + b2 lnX2 + b3 lnX3 + b4 lnX4 + b5 lnX5 +Ui 2. lnYnf = a + b1 lnX1 + b2 lnX2 + b3 lnX3 + b4 lnX4 + b5 lnX5 +Ui Where, Yf = Farm income (Tk. /farm); X1 = Age of the respondents (years); X2 = Family size (total number of family members); X3= Farm size (acre); X4 = Level of education (years of schoolings); X5 = Non-farm income (Tk. /annum) for first model and Farm income (Tk. /farm) for the second model ; a = Constant or intercept term; b1, b2, b3, b4, b5 = Coefficients of the respective input variables; and Ui = Stochastic disturbance/ error term.

Source of Information: Progress. Agric. 23(1 & 2): 143 – 150, 2012 ISSN 1017-8139

Article Link (Online Journal):

Funding Source:

1.

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The present study was an attempt to identify the socioeconomic characteristics of the farmers and the factors affecting the farm and non-farm incomes in a Haor economy. Based on the descriptive evidence emanating from this study, the following conclusions can be drawn on the findings: • Most of the farmers were middle aged (aged between 15-49 years) and had primary level of education. The average family size was 6.07 which is comparatively higher than the national average of 4.53 (HIES, 2010). • The number of small farmers was the highest in the study area. Besides farming boating, business, fish trading and non-agricultural labour were the dominant subsidiary occupations for the farmers. They got major portion of their income from the farm sources, but non-farm income also cover a part of their farm income and it was more profitable sector compared to the farm sector. • The estimated results of the first model shows that family size and farm size had a positive effect on farm income and non-farm income had a negative but statistically significant effect on farm income. • The estimated results of the second model shows that the effects family size had a positive effect on non-farm income and farm income had a negative but statistically significant effect on non-farm income. With a view to promoting the farm and non-farm sector income and strengthening its potential linkages between them, the study mainly recommends increasing efforts on two fronts: first, reforming the institutions responsible for rural development and second, developing activities and projects that would enhance farm and non-farm linkages.

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