This non-farm sector is highly dependent on their

This chapter mainly deals with thecomponents of sustainable livelihood framework.

It starts by clarifying themajor livelihood capitals (natural, social, human, physical and financial)accessed by rural households against their livelihood diversification status.Vulnerability contexts, and institutional and policy issues against ruralhouseholds’ livelihood diversification also discussed in brief and concise manner.The types and combination of livelihood diversification strategies pursued byrural households in order to attain food security in the intention that why andin what context rural households diversify their livelihood also assessed in detail.

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On top of this, the combination of livelihood diversification strategies, amongdiversified livelihood households, are discussed albeit briefly.  Moreover, the researcher tried to bring tolight the main reason (s) why rural households diversified their livelihoodsand the contribution of livelihood diversification to the total income of thehousehold. Finally, the main determinants of rural households’ livelihooddiversification activities are also discussed using multinomial logistic regressionmodel. 5.2  Rural Households Livelihood Capitals /Assets/The sustainable livelihood approach isgrounded in the idea that people’s livelihood is largely depending on theopportunity to access livelihood capitals or assets which form the basis oftheir livelihood strategies (Zoomers, 2008). Siti(2013) argued that the ability of rural households to secure employment in the non-farmsector is highly dependent on their asset endowments.  Households are often involved in a portfolioof activities which is a result of various combinations of assets andactivities which  will  in turn  determine  the livelihood  strategies  that they  pursue.  Livelihood capitals are the core of the households’strategy to survive, meet their future needs or reduce their exposure to risks.

A household’s asset portfolios determine the level of resilience andresponsiveness to risks, events and shocks (Mewal,2016). Livelihood assets are allied eachother and transformable. In this regard, Walker et al.(2002) stated that the status of one asset may negatively influence thecondition of other assets. For instance, the status of a natural asset(depleted grazing land and highly eroded farm land) may influence the financialasset of a household. In the same vein, financial assets are highly associatedwith education and health status of the household where as social assets of thehousehold related with the participation of social institutions (like Iddir,equb, debo, wonfel and etc.

) and access to credit services. The logic behind importance of  the presence or absence of livelihood assetsat the household level is that the more assets any household access to, theless vulnerable to the negative effects of trends, shocks or seasonality they facedand the more secure their livelihood will be. Normally, increasing one type ofcapital will lead to an increase in other amounts of capital, for example, aspeople become educated (increase in human capital) they may get a better jobwhich earns more money (increase in financial capital) which means that theyare able to upgrade their home and facilities (increase in physical capital).

Sometimes; however, one form of capital decreases as other increases. Thiscould be true, for example, where a person or household sells their land tomigrate to a city. Diversification of livelihood isentirely depending on the amount of assets a household owned. It is believedthat households who have adequate assets have an excessive opportunity todiversified their livelihood than those who do not have.

Of course, livelihoodresearchers agreed that mainly there are five types of livelihood assets/capitals in which rural households’ livelihood has been established (i.e.natural, social, human, financial and physical capitals). Thus, the target households are enquired about thelivelihood assets they possessed and analyzed in relation to their choices oflivelihood diversification strategies. 5.

2.1       Natural Capitals andHouseholds Livelihood Diversification       Natural capital is the term used for naturalresource stock from which resource flows and services (such as land, water,forest, air quality, erosion protection and rate of changes in these resourcesand so on) useful for livelihoods are driven. It is of special importance forthose who drive all or part of their livelihood from natural resource-basedactivities (Mewal,2016). Ofthe natural capitals, land is very important as it is the main factor ofproduction that can determine the livelihood of rural households and thus, inEthiopia, almost all rural household’s livelihood income is depending onagricultural production (Yenesew, 2014). In addition, land,for rural people, is a criticalproduction factor which determines the type of cropsthat are grownand the size of thecrop harvests. Under the subsistenceagriculture system, land holding size plays a significant role ininfluencingcrop productionandhouseholds’foodsecurity (Mewal, 2016).  In line with the above justifications, in the study area,the findings of the study displayed that almost all household’s livelihoodincome depends on agricultural production and hence land is the main factor ofproduction that can determine the livelihood of rural farm households. Theoverall average cultivated private land size of the sample respondents in thestudy kebeles was 0.

714 hectaresduring the survey period and this average is slightly less than Borena district average land size( 0.8 ha) (BDAO, 2017);Amhara region land size (0.97 ha) and national land size (0.95) (CSA,1998). Table 5.1 Respondents Average CultivatedLand against Their Livelihood Strategies Variables   Values Livelihood strategies Average cultivated land size Y=0 Y=1 Y=2 Y=3 Mean 0.

66 0.16 0.4 0.35 F-value 3.213*** 0.

955 2.407*** 2.126***           Sources: Own Survey, 2016               *** Significant at ?=0.01Y=0, Y=1, Y=2, and Y=3 represents on-farm only, on-farm plus off-farm, on-farm plus non-farm,and on-farm plus off-farm plus non-farm respectively.

 The one way analysis of variance result hasshown that there was a significant mean cultivated  land size differences among the differentlivelihood strategies pursued by rural households’  at less than 1% level of significance. As itcan be seen above in Table 5.1, farm households who have relatively large meancultivated land size (0.66 ha.) were found to be more depend on agriculturalactivity alone. The value is significant at less than 1% significant level. Onthe other hand, those households who have relatively small mean cultivated landsize (0.

4 and 0.35ha.) were found to be engaged more in the combination ofagriculture & non-farm activities, and a combination of agriculture, offfarm and non-farm livelihood diversification strategies, respectively. Thisindicates that, in general, rural farm households are engaged in a combinationof agriculture and off-and/or non-farm livelihood diversification strategiesbecause the return they got from these small land sizes could not support theoverall household food and other financial requirements, and hence forced themto search for other alternative sources of income like non-agriculturalactivities.

Therefore, the above result implies that improving theparticipation of rural farm households into profitable non/off-farm activities besidesagricultural activities is an effective way to reduce their food as well asfinancial problems of rural farm households.   The key informants stated that the mainmeans of accessing lands in the study area are acquisition from government landdistribution, family gift, inheritance, land renting, crop land sharing and acombination of these. Among these means of accessing lands, government landdistribution is the main means of accessing land for the majority of ruralhouseholds. They also stated that landless and smallholder households shared inland from farmers who have lands but no traction power, capital and labor tocultivate the lands. The share cropping agreements are held between thenegotiating parties and local mediators depending on the crop type to be grownand land suitability for crops. In the study sites there is a locally acceptedstandard to rent in and out the land.

The key informants reported that thecurrent mean contract price of 1 timmad(one-fourth of a hectare of land) of land for one year varies between 1000-2000 ET birr depending uponfertility and suitability to a particular crop types.    Forest and water resources are also othernatural assets of the rural farm households in rural areas of most developingcountries like Ethiopia. However, the key informants, in all study kebeles, stated that “in our surroundings, unfortunately, there are no prominent forest cover andwater resources in which we benefited from them”. In addition, during fieldsurvey, the researcher personally observed some small to medium size revers(like Legemara, Legedaba ,Boreda andYeshum) flows to south wards to join Abayriver in south-west direction but no one can use them via irrigation or elsefor crop production.

This so, may be because of the topographic features ofsuch rivers are not suitable for irrigation.

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