Abstract:
Nowadays it is common diversification of income sources, assets and livelihood occupation both in rural and urban areas for individuals or households in different economies, but for different purpose. This study aims to examining the linkage between small towns and surrounding rural households’ livelihood diversification, contributions and determinants surrounding Sayo town, Dano District, West showa Zone, Oromiya National Regional State. Data were gathered in this process from both primary and secondary sources. Sample size of 134 households heads were choose from two kebeles. The sample respondents were selected from sample frame by using systematic random sampling. Instruments employed to gather primary data were survey questionnaire was administered, 12 key informant interviews and 2(two) focus group discussions were conducted. Both descriptive statistics and econometric modeling were used to analyze the data collected from the selected sample households. The descriptive analysis indicates that Sayo town plays an important role in providing various services. The results from multinomial logistic regression model showed age of household heads, land size, distance to the nearest market, agricultural extension services, access credit services and membership in formal Cooperative were significantly affect the livelihood diversification of households. The study recommends that, improving Access Credit Services, availability of Agricultural Extension Services, and Land Size, among household should be promoted to increase the choice strategies of household livelihood diversification Hence, the local and regional governments should devote a lot of attention to addressing the basic requirements of the rural populations, such as strengthening the urban-rural links in small towns to increase productivity. This may be accomplished through partnerships with other non -governmental organizations. The rural community also needs instruction and information on the advantages of linkage between rural-urban in off-farm and non-faming diversification.
