Farm and Non-farm sector

Theoretically there are two possible impacts of off-farm employment on agricultural production and productivity. On the one hand, they can enhance farm production by providing the finance needed for farm inputs and technologies and, on the other hand, off-farm activities may have a detrimental effect on farm output by competing farming for labor. Similarly farmers are participates in off farm employment because of either of lack opportunity at farm or off farm employments are attractive returns compared to farming activities. Therefore, the aim of this study is to explore the effect of off farm employment participation of farm households on agricultural crop output yield and productivity, and to identify the demographic and socioeconomic factors that determines off farm participation of households using cross sectional surveying data. The results from Tobit and multivariate estimation shows that off farm labor supply farm households inversely related to crop output production andland productivity, whereas, labor productivity does not affect by off farm labor supply of farm households. The study confirms that farm and non-farm activities is competing each other.