Does Non-Farm Income Improve The Poverty and Income Inequality Among Agricultural Household In Rural Kedah?

TL;DR

This study investigates how non-farm income influences poverty levels and income inequality among rural farmers in Kedah using primary survey data and decomposition methods.

Contribution

It applies poverty and Gini decomposition techniques to analyze the impact of non-farm income on poverty and inequality in rural Kedah.

Findings

Non-farm income has a significant effect on reducing poverty.

Non-farm income contributes to income inequality dynamics.

Empirical evidence supports policy focus on non-farm activities.

Abstract

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.