Factors Affecting Nonfarm Income Diversification among Rural Farm Households in Central Nepal

Subject Areas : Environmental policy and management

Raju Ghimire ¹ (Doctoral Student, Department of Tropical Agriculture and International Cooperation, National Pingtung University of Science and Technology, Pingtung 91201, Taiwan)
Wen-Chi Huang ² (Associate Professor, Department of Agribusiness Management, National Pingtung University of Science and Technology, Pingtung 91201, Taiwan)
Rudra Bahadur Shrestha ³ (Doctoral Student, Department of Tropical Agriculture and International Cooperation, National Pingtung University of Science and Technology, Pingtung 91201, Taiwan)

Received: 2015-08-22 Accepted : 2015-08-22 Published : 2014-06-01

Keywords: Food Security, Income Diversification, Rural Farm Household, Nepal,

Abstract :

Nonfarm activities play an important role in the determination of rural household income, consumption expenditure, and household food security. However, much less studies have been devoted to the factors that influence nonfarm income diversification by farm household in developing countries. Using cross-sectional data and a probit model, this study attempts to determine the factors influencing nonfarm income diversification decisions by farm households in Central Nepal. The result reveals that household characteristics such as age, gender and education of the household head, and family size play a significant role in nonfarm work decisions. The households with larger farm size are less likely to participate in nonfarm work than their counterpart. Additionally, for those remains in the rural households, distance to road and market hinders the opportunities for nonfarm work. Finally, regional differences also exist in participating nonfarm activities among farm households. This study suggests that government policy should pay more attention on education, gender and infrastructures such as road and markets, to reduce the entry barriers and facilitate easier access to nonfarm activities. Also, nonfarm activities need to be promoted and incorporated in governmental plans and policies for balanced development between hills and terai areas.

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