Impact of rural, non-farm activities on smallholder farmers’ income-poverty in Eastern zone of Tigray Region, Ethiopia

Abstract

This study aims at assessing the impact of rural, non-farm activities on smallholder farmers’ income-poverty. It answers these research questions: Is there any significant difference in the poverty indices between the participants and non-participants of non-farm activities? What is the average treatment effect of rural, non-farm activities on smallholder farmers’ income-poverty? The study design was a survey based on cross-sectional data collected from 352 randomly selected farm households. To attain its objectives, the cost of basic needs based on the daily nutritional cut-off point of 2200 kcal/adult equivalent was used to establish the local poverty line. The Foster-Greer-Thorbecke (FGT) results indicated that farmers engaged in non-farm activities have lower incidence, depth, and severity of poverty. Furthermore, the propensity score matching analysis shows non-farm activities have a significant positive impact (at 1%; t = 5.86) on smallholder farmers’ income-poverty reduction. This suggests that poverty eradication policies and interventions require a paradigm shift away from equating rural livelihoods with agriculture and should address the constraints facing farmers for participation in non-farm activities like weaving, spinning, knitting, embroidery, metalwork, masonry, and pert trade. This study should make a contribution to addressing the dearth of literature on the issue and to the eradication of rural poverty.