آیا درآمد غیر کشاورزی ، فقر و نابرابری درآمد در میان خانوارهای کشاورزی در "کداه روستایی" را بهبود می بخشد ؟

This paper used a primary data collected through a surveys among farmers in rural Kedah to examine the effect of non farm income on poverty and income inequality. This paper employed two method, for the first objective which is to examine the impact of non farm income to poverty, we used poverty decomposition techniques- Foster, Greer and Thorbecke (FGT) as has been done by Adams (2004). For the second objective, which is to examine the impact of non farm income to income inequality, we used Gini decomposition techniques. Our result indicate that non farm income can improve the level of poverty or non farm income sources contributed towards poverty reduction among agricultural household. All of the poverty measures show that the inclusion of non-farm income into the agricultural household income reduce the level, depth and severity of poverty. But on the other hand, non farm income increased income inequality among agricultural household in Kedah. As expected agricultural income is the main source of income for rural people in the study area. The policy implication of this study is to encourage non-farm income activities among agricultural households as this would raise their income and hence, reduce poverty among them. However, it should be focused on value-added activities, especially on the lower income group.

Non-farm income is important for poverty reduction (de Janvry and Sadoulet, 2001) and for improving household welfare (Reardon et al., 1992; Reardon etal., 1998; Barrett et al., 2000;Canagarajah et al., 2001). Haggblade et al. (2005), for instance, report that non-farm income contributed 30 - 45 percent of rural household income across the developing world. Based on a review of a number of studies using rural household surveys conducted between the mid 1970s and the late 1990s, Reardon et al. (1998) finds that non-farm income as a share of total household income averaged 42 percent for Africa, 32 percent for Asia and 40 percent for Latin America. In Ghana, non-farm employment is an equally important source of income for rural households. On the other hand the empirical evidence on the effect of non-farm income on rural income inequality is mixed. Canagarajah et al. (2001) observes that this result may be due to the heterogeneity of the non-farm sector. Malaysia has made remarkable progress in reducing poverty since the introduction of a New Economic Policy 1970 with the headcount poverty rate declining from 37.7 percent in 1976 to 3.6 percent in 2007. But in terms of income distribution as shown by the Gini coefficient found that in almost 40 years, the improvements shown in the income distribution is very small. The Gini coefficient decreased slightly about 0.072 from 0.513 in 2007 to 0.441 in 2007. The question now, is this imbalance in income distribution is related to the non- farm activities. Specifically in this paper, we are trying to find the percentage of farmer having the source of non farm income. And to what extent the income received from non farm activities can increase farmer’s income and thus reduce poverty and to what extent the non farm income effect the income inequality.

This paper used a survey on agricultural household in Kedah to examine the effect of non farm income on poverty and income inequality. It is indicate that non-farm income sources contributed about one-third of the total agricultural household income.Besides, decomposition exercises carried out on poverty index shows that non-farm income sources contributed significantly towards poverty reduction among agricultural household. Meanwhile, the decomposition of the Gini coefficient analysis in this study found non-farm income sources contributed to increase income inequality or dis-equalising factor among the agricultural households. While farm and unearned income are income equalizers. The policy implication of this study is that, non-farm income activities should be encouraged among agricultural households as this would raise their income and hence, reduce poverty among them. However, it should be focused on value-added activities, especially on the lower income group. The findings of this study also suggest that a balanced development approach should not only focus on rural-urban divide, but also within the rural areas itself.