The Practice of Livelihood Diversification in Rural Bale Zone: The Case of Sinana District, Oromia, Ethiopia

Abstract Rural households diversify their activities into non-farm and off-farm activities. This study, mainly strives to Analyze the practice of livelihood diversification in rural Bale Zone; the case of Sinana District, Oromia, Ethiopia. Primary data was gathered using structured survey questionnaires that carried out by well-trained enumerators and supervisors. Using multistage sampling design a total sample of 335 households were selected. Double hurdle model was used to identify factors affecting decision and extent of participation in livelihood diversification. The results suggested that education of house hold head, household size, distance to nearest market, oxen owned, access to credit, access to training and total annual income were found to be significant in influencing household’s livelihood diversification decision. Moreover, age of household head, sex of household head, education of household head, community based organization membership, access to mass media, access to training, landholding size, and climate shock were found to be significant in influencing extent livelihood diversification. Finally the study has concluded that the households in the study area are likely to have a diversified livelihood when they have higher annual income, educational level, proximity to nearest market, access to training and access to credit facilities. Moreover once households decide to participate in livelihood diversification activities, the extent of livelihood diversification gets boosted when there is higher educational level, access to mass media, access to training and community based organization membership. Therefore, the government is recommended to build human capital through education, skills and training opportunities to motivate rural households to engage in livelihood diversification.