Characterstics And Determinants of Rural Micro Enterprise: The Case of Konso Special Woreda In Southern Region of Ethiopia

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Addis Ababauniversity


This study aims at examining the general characteristics of rural micro enterprises and factors that determine the engagement of households in such activities in an area characterized by low agricultural output, Konso special woreda of South Ethiopia. The study was motivated by the belief that rural micro enterprise employment is survival strategy of the rural households where there is limited local wage employment and agriculture fails to support the growing population. The study mainly used the household survey data collected through structured questionnaire to explore characteristics of farm economy and to describe the major characteristics of rural micro enterprise activities. Then, the analysis was undertaken by various means of analysis and economic regression for the examination of the injluencinglexplanatmy variables on household's income from micro enterprise activities. The study find~ that the crop production sub sector in the study sites is characterized by very low productivity. This is due to various reasons such as small and fragmented land holding, unsuitable soil fertil ity and land topography, lit/Ie use of high yielding inputs and lack of draft animal. Above all, shortage of rainfall is the seriou problem offarm economy in the study sites. Livestock sector is also constrained by shortage of grazing land and water as weil as prevalence of disease. Thus, the agricultural sector in the study sites is inadequate to support growing population. Consequently, people in the study sites are involved in very small income generating activities such as local drinks and food preparation as well as trade which mainly used family labour or relatives' and friends' labour. Their inputs are generated from the locality and mainly serve local people in their products. They are operated at homestead and at purt time base in combination with farm activities. They are perceived as somewhat profitable, labour saving, and reduce burden on environment and vulnerability of household to seasonal risks. As the result, they are attracted by most farmers despite they are constrained by a number of impediments mainly the lack of financial capital and inputs. From the determining factors, family size, and educational status of the household's head and location of household's residence to rural weather road and periodic market shown positive significance. This implies for agricultural and rural development strategies and policies to be jlexible in such a way that they incorporate micro enterprise sector. Among the promoting instruments, availing necessary resources like credit, expansion of education, and strengthening of rural transport sector and rural periodic markets are reasonably important. Key words: Rural poor, Rural micro enterprise, Risk averting mechanisms, Seasonal crop failure



Rural poor, Rural micro enterprise, Risk averting mechanisms, Seasonal crop failure