Market Access and Livelihood Diversification in Rural Areas. A case study in [(ewet Woreda, North Shoa Zone, Ethiopia

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Date

2009-06

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Addis Ababa University

Abstract

The aim of this study was to examine the relation between markets, market access and livelihood diversification in rural areas in three se lected kebeles of Kewet Woreda in North Shewa. The study findings were drawn from data generated through a blend of qualitative and quantitative me thods. Logit regression model was used to identify the determinants of market access in rural areas for both rura l and town markets. To determine market access, frequency of visi ting market places was used as a proxy measure. One way of ANOV A is also used to see whether there is sign ificant difference on non farm income between market accessible and inaccessible households. The findings show that rural fall11 households do not have access to forma l market information about crop and livestock products; they rather depend on actual market day information from traders. The find ings further show that households face different types of constraints to access markets depending on their locations, distance, availability of infrastructures and types of crop production. Mainly physical accesses ,. to markets i.e. distance and lacks of roads were found to be the main constraints of rural households to access market centers. In addition, the fi nding of logit regression suggests that market access is negatively and significantly affected by distance. An increase in market distance by 30 minutes is expected to decrease rural market access by 73%. On thc other hand , information access, family size, educational status of household head and farm size v.. rere found to be positively related to market access . I also found that availabil ity of market centers and market access determines the livelihood diversification of rural farm households. Moreover, it is not only the avai lability of markets but also the size of the market that determines the level of livelihood diversification in rural areas. Fall11 households who are living around large 11Iral111arket centers are able to diversify their sources of incomes than households who live around small rural market centers. Similarl y, the numbers of non-farm economic activities in which ru ral households participate depend on access to markets ancl the size of the markets itself. Households in remote areas who lack markets or face serious difficulties in acces sing their nearest markets were found to beĀ· the least diversifier both in terms of the proportion of income from non-farm sources and numbcr of li velihood activities in which they were engaged. The result of one way ANOVA ana lysis reported that there is a significant relation between ma,ket access alld engagement in non-fann economic activi ties.

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Keywords

Livelihood Diversification

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