Abstract:
In developing countries, non-farm activities play leading role in sustainable development and poverty reduction in rural areas. This study aimed to analyze the determinant of rural household’s decision to participation in non-farm income activities in Ambo woreda, using cross-section data. To select the sample size purposive sampling technique was employed. For this study both primary and secondary sources were used. Primary data were collected from 153 sampled respondents. Descriptive statistics were applied to characterize the sample households in terms of economic, demographic and institutional factors. Logit model was used for estimation of determinant participation of rural households in non-farm activities. The result of factors affecting participation of rural households in non-farm activities indicated that age of the households negatively and significantly influenced participation while education, membership to cooperatives, saving, access to market information, access to credit, non-farm training, and remittance received, land holding size significant and positively affects participation of rural household in nonfarm activities. Therefore, government, local and international NGO should providing appropriate information and knowledge about importance of non-farm activity and credit utilization for non-participants to encourage them to start non-farm income activities in the study area
