Determinants of Rural Livelihood Diversification: The Case of Rural Households in Lemmo District, Hadiyya Zone of Southern Ethiopia

The purpose of this study was to explore the determinants of rural livelihood diversification activities of the rural household in the Lemmo District, Hadiyya Zone of Southern Ethiopia. Data was gathered by household survey from 131 sample households of 4 randomly selected rural kebeles of the District through structural questionnaires. The alternative livelihood strategies that were used by the study households were agriculture only, agriculture plus off- farm, agriculture plus non- farm, and agriculture plus off- farm plus non- farm activities. Multinomial Logit model was employed in identifying the determinants of rural livelihood diversification strategies. From 12 hypothesized explanatory variables, seven variables were found to have significant effect in determining diversification of household livelihood sources. Accordingly, total family size, household head education, frequency of development agents’ visit, access to credit service and remittance receiving have positive and significantly effect on diversification livelihood activities. However, total land holding and dependent family size have negative and significant correlation with diversification livelihood sources. Therefore, the findings of this imply that rural households’ development policies should consider off-farm and non-farm livelihood activities in addition to agriculture. Keywords: Rural Livelihood, Diversification, Determinants, Multinomial Logit Model, Southern Ethiopi