Abstract

Rehima M, Belay K, Dawit A and Rashid S

Crop diversification under small-scale production system is a risk management strategy and an important step for transition from subsistence to commercial agriculture. This paper investigates the determinants of crop diversification using data on the three stage randomly selected 393 farm households in SNNPR of Ethiopia. The value of Margalef index was used as dependent variable. The Heckman two stage model was applied to estimate separately the farmers’ decisions and level of diversification. The factors that affected crop diversification were gender, education and trade experience, membership in cooperatives, resource ownership, features of the land owned, access to extension services and transaction costs. Based on the findings the following recommendations were forwarded. The government should promote female participations, invest on formal and informal education of the farmers, provide incentive for extension workers and improve the extension system. Furthermore, the government and stakeholder should strengthen agricultural inputs and agricultural research particularly, generating agro-ecology based technologies and disseminates them. Non-crop activities (trade experience) and social organizations underline the need for designing integrated agriculture system (crop-non crop) and improving social organizations as powerful tools to increase diversification capacity of the farmers. Transaction costs need strengthening rural urban infrastructure to link crop diversification with markets.