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Role of Off-farm Income on Crop Diversification in Some Selected Areas of Bangladesh

M. S. Rahman
Scientific Officer
Agricultural Economics Division, BARI Joydebpur, Gazipur-1701

M. A. Monayem Miah
Senior Scientific Officer
Agricultural Economics Division, BARI Joydebpur, Gazipur-1701

Sahadat Hossain
Chief Scientific Officer
Agricultural Economics Section, HRC, BARI Joydebpur, Gazipur-1701

Abstract/ Executive Summary:

The study was conducted in two districts of Bangladesh to determine the factors affecting the participation in off-farm income and crop diversification. A total of 150 sample farmers were selected for interview through random sampling technique. Analysis was done using Probit model, Simpson index of diversity and Multiple regression technique. The results showed that the average annual income was higher for service holders (Tk.1,83,696) compared to business (Tk. 1,69,215) and off-farm labour activities (Tk.1,09,373). Participations in activities like business and services were positively influenced by the farm size and education respectively. On the other hand, farm size and education were inversely related with participation in off farm labour activities. The respondents of business category spent 25% of their off-farm income for different crop production. Crop diversification index was found similar for business and service holders (0.40). Farmers in the study areas also faced some problems for crop diversification like low level of income and lack of credit facilities. Construction of roads and highways, marketing and credit facilities can improve the status of crop diversification in the study areas.

Keywords: Off farm income, Crop divercification

Location: Jessore and Rangpur

Start Date: 00-01-2011

End Date:

Program Area: Socio-economic and Policy

Non-commodity: Social status, Employement, Income generation

Objectives:

i) To examine the structure of rural household incomes in the study areas

ii) To find out factors affecting household participation in off-farm activities

iii) To find out the extent of diversification in the study areas

iv) To determined the factors affecting the crop diversification in the study areas.

Methodology:

Rural off farm activities in the study areas were classified into three categories; i) Business enterprises such as shop keeping, petty trading, contractor services etc; ii) Services such as salaried service in public and private sector institutions, teachers, lawyer, village doctors etc and iii) Off farm labour such as mechanics, wage employment in rural business, transport operations, construction labour etc. A total of 150 samples taking 25 from each group and 75 from each district were selected randomly for this study.The study was mainly based on primary data collected through face to face interview during the month of January to February 2011. The collected data were then edited and processed to fulfill the objectives of the study.Descriptive statistics were used to analyze the socio-economic characteristics of sample respondents and their annual household income. Probit model was used in this study.

Source of Information: Annual Research Report, Agricultural Economics Division, BARI

Article Link (Online Journal):

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

Average annual income was found higher for service holders (Tk. 183696) than that of business (Tk. 169215) and off farm labour (Tk. 109373). The intensity of participation in business activities is positively related with farm size, organization participation and infrastructure development. In the case of service, education plays a positive and significant role. Most of the factors included in the model are negatively associated with the participation in off farm labour activities. 25% of the total off-income of the business category was invested in different crop production. It was more or less similar for both the study areas. Service holders of Rangpur invested 27% of their off-farm income in different crop production. On an average, off farm labours invest 19% of their total off-farm income in crop production. Among the three categories, business holders invested more in different crop productions compared to other two categories. majority of the respondents (74%) mentioned that low level of income is the major problem that hinders the crop diversification in the study areas. Due to low level income respondents were not able to save enough money for producing diversified crops. Lack of credit and marketing facilities were also mentioned as problem of crop diversification by the 56 and 42% of the respondents respectively.

Knowledge Management: Report/Proceedings