Importance of Non-farm Income to Community Forest User Households in Rural Nepal

Abstract

The paper empirically examines the household-level importance of various income sources and the factors associated with the non-farm work participation of community forest user households in rural Nepal. Data for the study was collected using structured survey of 275 randomly selected households. The income data are presented in absolute and relative terms by different household categories. Determinants of non-farm work participation is tested using probit regression model. Results show that non-farm income constitute an average of 55.5% of the total household income. Non-farm income such as remittances (migration from work abroad) and pensions constitute the most important source of income for all categories of household. Larger sized non-dalits households, which hold relatively larger value of implements and smaller land area show significant association with non-farm work participation. The varying share of the non-farm income to the total household income resulting by the combination of household’s individual and socio-economic characteristics are discussed.The study suggests that typical policies such as improvement in human capital , e.g. improved literacy and skills, and rural infrastructures will remain important for promoting and making the poor benefit from the income opportunities through various non-farm sectors.