Impact of Farm Diversification on Income and Expenditure of Small Scale Farm Households in Rangpur District of Bangladesh

Farm production diversification has the potential to broaden and strengthen the sources of farm and non-farm incomes of rural households. This study intends to estimate the impact of farm diversification on income and expenditure of smallholder farm households. A total sample of 100 farmers were randomly selected from the three villages namely South Panapukur, Gaghottari and Betgari under Gangachara upazila of Rangpur district in Bangladesh. Both tabular and quantitative analyses were done to achieve the major objectives of the study. The findings show that the socioeconomic characteristics, cropping pattern, land type, soil type of Gangachara upazila are suitable for farm diversification. From 100 farmers about 55 percent farmers practiced 11-16 numbers of crops, vegetables, livestock and fish. Smallholder farm households were also involved in both farm and non-farm activities which were 71 percent of farm households. Average annual income from farm and non-farm activities were Tk. 75150.00 and Tk. 23350.00 respectively. Average annual expenditure on farm and non-farm practices was Tk. 43000.00 and Tk. 12000.00, respectively. In the present findings, the average annual expenditure on food and non-food items was Tk. 41000.00 per family. The Poisson regression was run to predict the determinants of farm diversification in the last 12 months where soil type, farm size and employment member of family were statistically significant at one percent level of significance and education was statistically significant at five percent level of significance. The Multiple regressions were done to estimate the impact of farm diversification on income and expenditure where farm size and combination of farm and non-farm practices were statistically significant at one percent probability level. But all the explanatory variables included in the model were not statistically significant as were generally expected. Farmers faced different problems and constraints in diversifying farm. In spite of the entire problems, this study has thrown light on some important issues regarding farm diversification of the study areas. Overall results indicate that rather than farm diversifications, diversification of income from farm to non-farm sources positively and significantly affect the household income and expenditure.