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Distributional effects of non-farm incomes in a Malaysian rice bowl

Author

Listed:
  • Siti Badariah Saiful Nathan
  • M. Mohd Rosli

Abstract

Purpose - – The purpose of this paper is to identify the structure of household income and examine the effects of non-farm incomes on the income distribution of farm households in a relatively developed rural area of the Malaysian rice bowl. Design/methodology/approach - – The non-farm incomes were disaggregated into different components to determine the contribution of each income source to total household income and overall inequality. The income distribution and decomposition was examined using the Gini decomposition method. Findings - – It was found that almost 71 percent of the households in the sample had at least one source of non-farm income. On average, non-farm incomes contributed about 33 percent to total household income. Non-farm wage employment was the dominant source of non-farm income, accounting for almost 26 percent of overall household income. The farm incomes, especially the paddy incomes were found to be the inequality-decreasing income source. The study also confirmed the proposition that the non-farm incomes were the inequality-increasing income source as they contributed up to 35 percent of the overall income inequality. Originality/value - – Previous studies have found that non-farm incomes have different effects on income inequality of rural communities, especially those in the rice granary areas situated in less developed states of Malaysia, where poverty is still a problem. This study is significant because it identifies the effect of certain incomes on the overall income inequality among farm households in the granary areas located in a relatively developed rural area. The studied areas are characterized by an intensive paddy production and a rapid development in business and industrial activities, and hence, providing non-farm employment opportunities to the rural farmers. Therefore, this study shows the income structure and how farm and non-farm incomes affect the overall income distribution of the paddy farmers.

Suggested Citation

  • Siti Badariah Saiful Nathan & M. Mohd Rosli, 2016. "Distributional effects of non-farm incomes in a Malaysian rice bowl," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 43(2), pages 205-220, February.
    • Handle: RePEc:eme:ijsepp:v:43:y:2016:i:2:p:205-220
    DOI: 10.1108/IJSE-09-2013-0200
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    Citations

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    Cited by:

    1. Othman, Kamarudin & Omar, Hapiza & Fuad , Hanani Ahmad & Laidin, Jamilah & Ramli, Irlisuhayu Mohd, 2020. "The Casual Impact of Government Support on the Small Strategic Crop Industry: Malaysia's Experience," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 10(01), January.
    2. Kamarudin Othman & Hapiza Omar & Hanani Ahmad Fuad & Jamilah Laidin & Irlisuhayu Mohd Ramli, 2020. "The causal impact of government support on the small strategic crop industry: malaysia`s experience," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 10(1), pages 298-310, June.
    3. Nitta, Atomu & Yamamoto, Yasutaka & Kondo, Katsunobu & Sawauchi, Daisuke, 2020. "Direct payments to Japanese farmers: Do they reduce rice income inequality? Lessons for other Asian countries," Journal of Policy Modeling, Elsevier, vol. 42(5), pages 968-981.

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