Livelihood Diversification: A Streatagy for Rural Income Enhancement

Muhammad Israr^1, , Humayun Khan², Dawood Jan³ and Nafees Ahmad⁴

¹Assistant Professor and Head of Department, Department of Rural Development, Amir Muhammad Khan Campus, Mardan, The University of Agriculture-Peshawar, Khyber Pakhtunkhwa-Pakistan

²Professor, Institute of Development Studies, The University of Agriculture-Peshawar, Khyber Pakhtunkhwa-Pakistan

³Associate Professor, Department of Agriculture and Applied Economics, The University of Agriculture-Peshawar, Khyber Pakhtunkhwa-Pakistan

⁴Lecturer Department of Economics, University of Malakand, Chakdara (Dir Lower), KP-Pakistan

Cite this paper:
Muhammad Israr, Humayun Khan, Dawood Jan and Nafees Ahmad. Livelihood Diversification: A Streatagy for Rural Income Enhancement. Journal of Finance and Economics. 2014; 2(5):194-198. doi: 10.12691/jfe-2-5-10

Abstract

The aim of this study was to study the diversified income, its contribution and the effect of income of the households in Shangla district of Khyber Pakhtunkhwa, Pakistan. Data were collected from 323 households through face to face interviews with the help of a structured questionnaire. The empirical evidence shows that among the farm sources of livelihood the crop and livestock activities of the household were diversified and have been increased. The adoption of latest seed technologies of maize and wheat had increased the productivity and hence income of the farm households. The sample respondents had also diversified livestock activities. Average income from crop was Rs. 65,350 per annum per household based on total household. While its contribution to total income was 15.08%. Diversification was observed mainly in non-farm income sources. The overall non-farm income contribution to the total income after diversification was 69.40% and the average income was Rs. 300,811 per household per annum income. The contribution of total income from farm sources was decreased by 10.03% after the diversification of income. Agriculture to non- agriculture ratio decrease to 0.4408 after the diversification of income. Average income from the farm sources decreased while from non-farm sources increased. From all sources of income the change was Rs. 1,80,812 per annum per household. But the contribution of non-farm sources was more than the farm sources of income to the total household income. It was concluded from the findings that diversification had increased the household income. The area lack in development compared with other areas of the province. The study recommends further improvements in both the farm and non-farm sources of income for sustainable livelihood and this can be done by investing more in the productive capitals of the rural households.

Keywords:
diversification livelihood farm to nonfarm diversification and ratio

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