Research shows there is an increase in farming households who also earn their income away from the farm. But what is the impact of this on their farming activities?
In Uganda, about 60 per cent of rural households engage in some form of income generating activity off-farm, and the proportion of those with positive off-farm earnings has increased.
While some research carried out in Uganda has linked off-farm income to poverty reduction, there is limited information on the linkage between the farm and the off-farm sectors.
Off-farm income is expected to provide farmers with liquid capital for purchasing productivity enhancing inputs such as seed and fertilisers. On the other hand, pursuit of off-farm income may undermine their adoption of technologies by reducing the amount of labour allocated to farming enterprises.
This is an analysis of the premise that off-farm income increases their adoption of technologies, translating into increased productivity. Maize production is used as a case study to explore the linkage
Maize is cultivated by 86 per cent of the rural households accounting for almost half of the area under cereal crops in the country. It is estimated that 59 per cent of maize farmers produce surplus for the market every season.
Substantial improvements have occurred in the sector. The National Agricultural Research Organisation has disseminated new varieties, among which are the Longe series 1 through 12 that have been bred for disease resistance and high yields.
The proportion of farmers planting improved varieties is over 59 per cent, and more than 80 per cent of land opened up is planted with these maize types.
Off-farm employment has become increasingly important. About 90 per cent of those sampled reported receiving earnings from off-farm work.
Here, off-farm earnings are defined as income generated from any non-agricultural enterprise such as crafts, metal work, transportation or any informal business, as well as transfers and remittances.
The characteristics of households were studied, contrasting between farmers with and without off-farm income. The summary statistics show a significantly larger proportion of land allocated to improved varieties and higher expenditures on purchased inputs among farmers with off-farm income compared to those without off-farm income.
A larger proportion of farmers with off-farm income had received formal education and interacted with extension agents, and had access to credit. However, maize yields are significantly higher among farmers without off-farm income.
The results show a positive and significant effect (at 10 per cent level) of household off-farm income on adoption of improved maize varieties.
A one per cent increase in off-farm income earned increased the probability of adopting improved varieties by about 0.4 per cent. The intensity of adoption is about 0.003, implying that the number of hectares planted with improved seed increased by about 0.3 per cent due to a percentage increase in off-farm income among the adopters.
The positive effect suggests that off-farm earnings may induce technology adoption by providing farmers with capital for purchasing the improved maize technologies.
Other significant determinants include household access to extension services and sex of the household head. In particular, farmer interaction with extension service providers increased the probability of land allocated to improved seed by 13.8 per cent.
Adopters, who interacted with an extension services provider, increased the land allocated by 0.117 hectares. Access to extension services is an important ingredient for diffusion of agricultural innovations.
The main service providers include the National Agricultural and Advisory Services programme, the local government system, and non-governmental organisations.
The statistically significant effect underscores the important role played in increasing diffusion and dissemination of improved technologies in farming systems.
It was also found that households with male heads had a higher probability of allocating land to improved maize than those with either female heads or headed by children. Male farmers are relatively endowed with the resources for farm investments.
The results demonstrate that off-farm earnings are important for adoption of improved seed. Another important factor is interaction with extension services.
But it also reveals that farmers without off-farm income are generally more efficient than those with off-farm income, implying that the productivity gains may be undermined by reduction in time allocated to farm management because of off-farm opportunities competing for household labour.
Although this study had interesting findings, more research is needed to to isolate the effect of income from various categories of off-farm work.
The author is a PhD student of development economics at Ohio State University