Factors affecting the participation of small-scale farmers in additional income generating activities in dry farming areas: The case of Dire Dawa, Ethiopia

Expanding non-farm income generating sources for drought prone subsistence farmers plays a significant role in reducing deep rooted poverty, minimizing chronic household food security as well as enhancing resilience building and climate change adaptation capacities of rural communities. This study intended to identify household level determinants of participation in non-farm income generating activities (NFIGA) among smallholder farmers of rural Dire Dawa Administration (DDA), Eastern Ethiopia. Hence, cross-sectional research design that used both descriptive and inferential statistics was employed. Data were collected from 250 sample household heads by using simple random sampling technique from 12 rural kebeles of DDA. Whereas semi-structured interview schedule, personal observation and focus group discussions were made directly. The Tobit model result revealed that saving habit, and family size were significant and positively related with the probability of participation in NFIGA while land size owned, livestock ownership and active labor force were found to be negatively related. Moreover, low market access and information, lack of knowledge and skill, lack of capital and credit, lack of transport, lack and sustainability of input supply, lack of appropriate training and advice and lack of close supervision were the major constraints which hindered farmers from undertaking non-farm activities. This shows the need for non-farm activities to be part of rural development policies. The interventions should also be designed to suit the needs and situations of different categories of the households in the study area. Keywords: Non-farm income, Tobit model, rural development, Dire Dawa, Ethiopia.