Determinants of Smallholder Farmers’ Cash Crop Production Decision and Its Effect on Household Income in Humbo District, Wolaita Zone, Ethiopia

Producing market oriented crops at smallholder farmer level is very important for improving the rural household’s income. The aim of this study was identifying factors that determine smallholder farmers’ cash crop production decision and its effect on household income in Humbo District, Wolaita Zone, Ethiopia. Data for the study was collected from 254 rural households using interview schedule. Multi-stage sampling technique was used as sampling technique. The data was analyzed using descriptive statistics and Heckman’s two stage model. Accordingly, the study identified cash crops such as pepper, cabbage, onion, and cotton are dominantly produced by smallholder farmers; male headed households are more likely producing these crops relative to female headed; and farmers at the age range of 31 and 64 years are more likely producing than at other age category. Lack of timely supply of agricultural inputs, higher prevalence of crop diseases, fluctuation of market price, and perishable nature of crops are identified as the major crop problems in the study area. Based on the Binary Logistic Regression result, sex, experience on farming activities, access to extension service, off-farm income, and distance from farm land to water sources were significantly determining cash crop production decision. On the other side, Multiple Linear Regression model result revealed as access to credit, off-farm income, number of oxen, landholding size, and education level were significantly determining rural household income. Accordingly: the government should intervene in timely provision of modern agricultural inputs and create favorable linkage between farmers and research centers. The credit institutions should be accessible to ensure timely purchase of agricultural inputs. Keywords: Smallholder farmers, participation, income, cash crops, Heckman two stage; DOI: 10.7176/EJBM/12-25-05 Publication date:September 30th 202