Sources of Income Inequality among Farm Households in Ethiopia; Using of Gin Coefficient

Author(s)

Efa Gobena Tura , Bizualem Assefa ,

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Volume 6 - August 2017 (08)

Abstract

The distribution pattern of income over years has been a major concern in the determination of the level of economic growth and development of any country. Household in rural Ethiopia are diversifying activity both within agricultural and non-agricultural sectors. The study intended to analyze sources of income inequality of cash and cereal crops farmers. Data for the study obtained from primary and secondary sources of data. About 164 respondents for cereal crops and 150 cash crops producers sampled for the study. For analysis purposes descriptive statistics, Lorenz curve and Gini coefficient were used for the study. One way ANOVA showed that there is statistical significant difference between cash and cereal crops farmers in terms of income obtained from livestock, off farm income and other farm income. The income obtained from the livestock business and other farm activities were unequally distributed among the cereal crops producers in Ethiopia. On the other hand, income obtained from non-farm activity and livestock business highly contributed for income inequality among the cereal crops producers. The Lorenz curve result showed that income inequality of cash crops producers higher than income inequality of cereal crops farmers. For both cereal and cash crops producer’s the study showed that livestock activities is small-scale, mostly free-costs which lacks modern livestock husbandry practice that could result in high productivity and yield easily. Based on the finding of the study, it is suggested that the policy makers targeting to alleviate income inequality should continue to explore options for promoting the farmers involvement in diversified farming and non-farming activity to overcome the income disparity in the country and it should be focused on value-added activities, especially on the lower income group.

Keywords

Cereal crops, cash crops, Gini Coefficient, Lorenz curve, Income 

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