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OFF-FARM ACTIVITIES AND HOUSEHOLD POVERTY REDUCTION IN RURAL SETTING OF
DODOMA MUNICIPAL: A CASE OF NALA WARD
Zawadi P Mammba
giftmammba@outlook.com
ABSTRACT
The main objective of this paper is to address the importance of off-farm activities in eradicate household
poverty. The concept actual raised due to negligence of off-farming activities in most of Tanzania rural area,
it is only recent that the contribution of off-farm activities to household poverty has not been widely
addressed and campaigned for. The campaigning for increasing off-farm participation in rural area is
mostly with the view of gaining socio-economic popularity but not to equip rural household with strategic to
eradicate household poverty. The major findings reveal off farm activities as one of the aspects that need to
be address to transform rural economy in order to eradicate rural household poverty. Empirical results are
consisting with theoretical hypothesis that engagement in off-faming activities is affected by age, sex,
educational level, dependency ratio or family size. However, the empirical results show that, are consist with
the hypothesis that engagement in off-farming activities is influenced by sex, education level and family size
of household heads although, age and dependency ratio, age does not effluences household heads to
engaging in off-farm activities. Despite of neglecting of off-farm activities, there is evidence show the growth
of off-farm sector in rural Tanzania.
Keywords: Farm Activities, Off-farm Activities, Household Poverty, Rural Setting
INTRODUCTION
There is growing interest in off-farm income as research on rural economies is increasingly showing that
rural peoples livelihoods are derived from diverse sources and are not as overwhelmingly dependent on
agriculture as previously assumed (Gordon et al, 2001). The role of off-farm activities in promoting rural
economy and reducing poverty is well documented (Islam, 1984; Ranis and Stewart, 1993; Reardon, 1997;
Weijland, 1999; Lanjouw, 2001).
In Africa most countries have not yet met the criteria for a successful agricultural revolution and factor
productivity lags far behind the rest of the world. This situation has led to growth of scepticism in the
international development discourse about the relevance of agriculture to the growth of rural economy. As a
result, the promotion of off-farm activities as a pathway out of poverty has gained widespread support among
African countries and development agencies. Evidence shows that, off-farm activity in Africa is fairly evenly
divided across commerce, manufacturing and services that linked directly or indirectly to local agriculture or
small towns and is largely informal rather than formal (Reardon, 1997).
In Tanzania, Ellis (1999) provides a review of the large-scale sample survey evidence on the significance of
the off-farm sector in rural Tanzania. While the author accepts existence of measurement problems of off-
farm income, the results show that non-monetized incomes remain quite important, suggesting that the
transition out of subsistence agriculture is far from complete, but also non-farm income shares are fairly low
and there is no clear evidence of a marked expansion of these shares over time. Other studies, however, give
a different story. When studying Non-agricultural earnings in peri-urban areas of Tanzania (Lanjouw, 2001)
finds that off-farm income shares rise sharply and monotonically with quintiles defined in per capital income
terms. The recent Household Budget Survey of 2012 shows also that rural income appears to be increasingly
dependent on off-farm sources relative to on-farm income sources (Katera, 2013).
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Although literature on off-farm activities is large, relatively few studies have examined how off-farm
activities contribute in eradicates household poverty. Moreover, the literature has been largely silent on how
governmental and non-governmental organization neglecting off-farm activities. These groups of papers
published in this special section helps to fill the knowledge gap. Hence these paper support theoretical
predictions that suggest diversification of off-farm and farm income- should base on marginal utility of
return. This is consistent with two theoretical arguments.
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However, the substantial evidence are composed from Dodoma Region basically in Dodoma Municipal that
had been noticed among the poorest regional in Tanzania that characterized by low agriculture productivity
(arid land), massive unemployment and increasing population density (Msaki et al., 2013). Dodoma region is
one of the poorest areas in Tanzania because of frequent famines caused by semi-arid natural conditions
(Ndanga, 2012). Rainfalls are erratic, with an average annual precipitation level of 570mm, where 85% of the
rains do fall between December and April (Sakai, 2012). Such rainfall pattern in Dodoma makes it possible
to maintain agricultural societies through unstable due to capricious rainfall (Ndanga, 2012; Sakai, 2012).
MATERIALS AND METHODS
Several measurements of off-farm activities constructed and used to analyse the relationship between age,
sex, education level, family size and dependency ratio with reasons for engaging in off-farm activities.
Economic theory also highlights the important of off-farm activities in household income.
In depth-interview conducted to the DARDO, WEO and VEO as key informants. In primary source the
structured questionnaire summarised, edited and coded before analysed. Statistical Package for Social
Sciences (SPSS) used to analyse quantitative data. Also descriptive statistics such as frequencies and
percentage used to obtain the variability and central tendencies of variable.
Respondents selected from each hamlet inconsideration of age, sex, educational background and wealth
status. Overall, total of 102 respondents selected whereby 93 from simple random sampling and 9 from
purposive sampling. Specifically, background information on farm, off-farm activities and studied area
background gathered from secondary source. In case of inferential statistics, multiple regressions were used
to predict reasons for engaging in off-farm activities as a targeted variable and the age of household head, sex
of the household head, education level of the household head, family size, and dependency ratio as a variable
to predict. The estimating equation is as follows:
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Eoff-farm = Ag+Sx+Edl+D*+Fs+






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The neoclassical farm household model predicted that a farm household chooses to work either on the farm or off-farm depending
on the marginal return from farm and off-farm labor (Singh et al, 1986).
For an individual, the action for off-farm participation is based on the comparison of the market wage rate and the reservation
wage. The reservation wage is the marginal value of time when none is allocated to off-farm work. An individual will participate in
off-farm work when the reservation wage is lower than the market wage (Benjamin et al., 1994).
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To better capture the underlying reasons for engaging in off-farming activities, regressions (multiple linear) was employed.
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Table 1: Variables Definitions
Name Definitions
Ag (age/Household head) Number of years
Sx (sex /Household heads Female or Male
Edl (education level/Household
heads)
Number of years spend in education (Primary School/Secondary
School/higher Learning Institution)
D* (dependency ratio) [(age 14 + aged 65)/ aged 15-64]*100
Fs (family size) Number of family member
Eoff-farm (reasons for engaging in
off-farm activities)
Reason for engaging in off-farm activities (1.00), Not reason for
engaging in off-farm activities (2.00)
RESULTS AND DISCUSSION
We begin by discussing the background variables of respondents by focusing on age group whereby, the
household head with age of 18 and above are considered. As shown in Table 2, age distribution of the
respondents categorised into five bases; (1) 18-33; (2) 34-49; (3) 50-64 and (4) age above 65. Result does not
indicate household heads aged below 18 years old, also Table 2, indicates age groups by focusing on
frequency distribution and percentage contribution of each age groups. In case of household head sex, results
indicate 40.9% of household headed by female. Probably divorce and financial disability had leads female
households head to engaging in off-farm activities. Most respondents were married with very few cases of
separated household heads. Whereby, widow and widower were 16.1% and whos not married is 17.2%.
Also, the education level of household heads are ranked into 4 categories; not attending school, primary
education, secondary education, high learning institution. Results show that 55.9% of the heads of household
heads had attended primary schools with only 4.3% attended higher learning institution whereby 33.3% has
not gone to school. The presence of relatively high proportions of household heads with primary education
is due to the fact that, majority of rural dweller they are not realizes the potentiality of education to their daily
lives.












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Table 2: Households Background Variables
Categories Frequency Percent
Age of Household heads
18-33 44 47.31
34-49 23 24.73
50-64 21 22.58
65 and above 5 5.38
Total 93 100
Sex of Household Heads
Male 55 59.14
Female 38 40.86
Total 93 100
Marital Status of Household Heads
Married 56 60.2
Not married 16 17.2
Widow/widower 15 16.1
Separated 6 6.5
Total 93 100
Education Level of Households
Not gone to school 31 33.3
Primary school education 52 55.9
Secondary school education 6 6.5
High learning institution/College/University 4 4.3
Total 93 100
Family Size
1-4 51 54.84
5-8 39 41.94
9 and above 3 3.22
Total 93 100
Dependency ratio
Below 14 164 44.1
Between 15 and 64 194 52.1
Above 65 14 3.8
Total 372 100
This paper indicates 54.8% of family size is range between 1 to 4 family members. And low family size is
range between 9 and above household members. In this study the dependency ratio includes those family
members under the age of 15 and over the age of 64. Also productive portion makes up the family members
ages between 15 and 64.
Reasons for Engaging In Off-Farm Activities
This section presents the results of econometric analysis on the reasons that lead household head to engaging
in off-farm activities. In this case, independent variables of age, dependency ratio, sex, family size and
education level of household head also dependent variable is reasons for engaging in off-farm activities are
used to formulate the model. During the model analysis, the Weighted Least Squares Regression (WLSR)
was applied on farm size variable in order to minimise error.
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The summary model results indicate respectable level of prediction since the quality of the prediction of the
dependent variable, R is 0.618. That means, independent variables contribute 61.8% to the dependent
variable. Also explanation between variable (R-sq) is 38.2% and that indicate how age, sex, education,
dependency and family size act as a reasons for the household head to engaging in off-farm activities. The
variance in the criterion variable accounted 38.2% of Adjusted R-sq is 0.38. The independent variables
significantly predicted the dependent variable F (5, 73) = 9.028, p < .0005. As a result, the econometric
model is consequently fit the data since there is a statistically significant relationship between the reasons of
engaging in off-farm activities and the age, sex, education level, dependency ratio and family size of the
household head.
Table 3: Variable Contribution Measurement-Coefficients
Model Unstandardized Coefficients Standardized
Coefficients
T Sig.
B Std. Error Beta
(Constant) 2.801 0.547 5.124 0.000
Ag (Age/Household
heads)
0.010 0.085 0.014 0.117 0.907
Edl (Education level) 0.312 0.103 0.294 3.021 0.003
D* (Dependency ratio) 0.037 0.086 0.050 0.431 0.668
Fs (Family size) -0.201 0.071 -0.356 -2.848 0.006
Sx (Sex of the household) 0.534 0.190 0.288 2.802 0.006
The probability of the t statistic for independent variable of age is .117 for b coefficient is 0.907 > sig .05,
there is no statistically relationship between the ages of household head and the reasons for engaging in off-
farm activities. As a result, the age of household head is not driving force that can lead household head to
engage in off-farm activities.
There is statistical relationship between education level of household head and the reasons to engaging in off-
farm activities, since b coefficient is .003 < .05. As a result, the education level of household head is among
of the reasons that cause Nala dwellers to engage in off-farm activities.
The high or low number of dependant household member is not the reasons that cause household head to
engaging in off-farm activities, there is others reasons rather than dependency ratio. Result show that, t
statistics score .431 in which b coefficient score .668 > .05 sig. which imply non-statistical relationship
between variables.
The family size is among of the reasons that lead household head to engaging in off-farm activities, data
show that household with high number of member are considered to be more attracted to engage compare to
household with low number of member. Empirical result show household size has probability of t statistics of
-0.2848 for the b coefficient of .006 less than the level of significance, which indicates strong relationship.
Model analyses illustrate positive relationship in variable-sex where t statistical score .534 for b coefficient is
.006 2 < sig .05. Also result indicate male household a more likely to engaging in off-farm compared to
female household head. Male household head who engaged in off-farm activities was 59.14%.
Supplementary reasons that cause most of household heads to engage in off-farm activities mentioned as;
low income from agriculture; burden of maintaining large family and availability of off-farm opportunity in
rural area.
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Interaction between Farm and Off-Farm Activities
Seasonality in agriculture causes most of the farmers to have excess labour during the slack season of
agriculture, which induces them to engage in off-farm activities. Results indicate that, off-farm activities
are much performed during dry seasonal compare to agriculture that practiced in rainfall seasonal and most
of the farmers engaged soon after harvested their crops. Data show the number of household who engaged in
off-farm activities during dry seasonal are 52 (56.8%) and the number of household who engaged in off-farm
activities during rainfall seasonal are 14 household equivalent to 15.1% while the household who engaged
during both seasonal (Dry and rainfall seasonal) are 26 (28.1%). Note that, majority are engaged in off-farm
activities during dry season by 56.8 %, as a result off-farm income cured most household from extremely
poverty during dry season.
Out of 93 household, farming incomes contribute Tsh. 56,034,500 in household income per annum whereby,
crop cultivation contributes Tsh. 47,273,500 and livestock keeping contribute Tsh. 8,761,000. Tsh.
151,342,000 obtained from different source of off-farm activities. Off-farm activities contribute much
compared to agriculture but in a real sense the contribution of off-farm is compounded collection from 17
different off-farm activities while agriculture is only 2 activities (crop cultivation and livestock keeping).
Rural household income much depends on farm and off-farm income in large extent, the interaction is much
influenced by income.
Most of the farmers are participating in off-farm activities mainly to supplement their agricultural income.
Excess labour and the agriculture seasonality are the key factors responsible for farmers to participate in off-
farm activities. Large family results in declining farm size which in turn results in low level of per capital
productivities and hence less income.
Figure 1: Average income from farm activities
Crop cultuvation,
Tsh. 508,312 , 84%
Livestock keeping,
Tsh. 94,204 , 16%

Rural off-farm activities in the study areas were classified into three categories; i) Business enterprises such
as shop keeping, petty trading, contractor services ii) Services such as salaried service in public and private
sector institutions, teachers, lawyer, village doctors and iii) Off-farm labour such as mechanics, wage
employment in rural business, transport operations, construction labour.

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Figure 2: Average income from off-farm activities
Business
enterprises , Tsh.
805,172 , 49%
Tsh. Services,
455,892 , 28%
Off-farm labour ,
Tsh. 366,269 ,
23%

Contribution of off-farm activities to household poverty reduction
The effect of off-farm to household income analysed by compared household income distribution, with a
counterfactual off-farm income. Result show that, the average total household income from both activities
farm and off-farm are Tsh. 2,229,855. Out of that, average household income from farm activities are Tsh.
602,522 while off-farm activities are 1,627,333. If household income were composed by only farm activities
the household income could be Tsh. 602,522 equivalent to 27% of average total household income.
Whereby, off-farm activities contribute annual average household income of Tsh. 1,627,333 equivalent to
73% of total annual average household income, this imply, the contribution of off-farm activities to
household income is high compared with farm activities Table. 5
Table 4: Farm and off-farm income
Source of income Income per annum (Tsh.) Mean (n=93) Percentage
Off-farm activities 151,342,000 1,627,333 73
Farm activities 56,034,500 602,522 27
Farm and off-farm activities 207,376,500 2,229,855 100
The annual average household expenditure on meal is Tsh. 1,081,000 (46%), equivalent to Tsh. 3,000 per
day. Therapeutic Tsh. 26,055 (0.9%), clothing is Tsh. 78,000 (3.4%), school fees Tsh. 139,962 (2.7%), rent is
Tsh. 85,500 (0.086%), entertainment Tsh. 203,853 (4.0%), communication disbursement is Tsh. 175,475
(5.1%), ceremonial contribution is Tsh. 34,894 (0.32%), development contribution is Tsh. 4,427 (0.1%) and
other households expenditure Tsh. 1,315,534 (36.7%). It seems Nala dweller put more consideration to
unproductive activities rather than productive activities. Households spend the average of Tsh. 203,853 per
annum equivalent to 4.0% on refreshment and other unnecessary entertainment while spend only Tsh. 4,427
equivalent to 0.1% on development contribution. Results show Nala dwellers are much attracted by
ceremonial contribution than development contribution.
Part-time farming and multiple job holding have become strategies to support and stabilize households
income while off-farm employment is the only one strategy to deal with income fluctuations and risk
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associated in agriculture. Study indicates 81 (87.1%) are self-employed, and only 12 (12.9%) households
head are permanent employed in different Governmental and Non-Governmental Organisation (NGOs).
CONCLUSIONS
The question of off-farming activities and household poverty reduction is not simple and unlikely to be
answered without empirical evidence. As a result, this paper examines the important of off-farm activities in
eradicating household poverty by analysing data quantitative and quantitatively.
Taken as a whole, this paper provides a cautionary tale for policy-maker institution and rural development
stakeholders that are eager to eradicate rural household poverty in order to transform rural economy. In that
case, policy options should not be limited to farming, but rather go beyond it to off-farm activities, since both
are equally important for rural economic growth.
ACKNOWLEDGEMENT
The authors wish to thanks H.I Mbise, R.N Masologo, N. Buretta and E. Makamba they contribute much on
the study. Equally authors would like to put on record our gratitude toward Nala Ward community for their
time and active participation throughout the period of the study.
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