The effect of off-farm income from industry on rice production: A case study of Cheung Kaeub commune, Kandal Stueng district, Cambodia

Using cross-sectional household data from a field survey conducted in Cheung Kaeub commune in 2004, this paper explored the effect of off-farm income from industry on rice production. By using with and without comparative study approach and other data analysis methods consisting of two-independent samples t-test, production function, correlation and economic profitability analyses, this paper found the effect of off-farm income from industry on rice production as follows: (1) off-farm income has a strong correlation with input investment and rice output, (2) farm households with off-farm income harvested rice yields around 3 tones per hectare, while farm households without off-farm income obtained around 2.5 tones per hectare. This large difference in crop yields attained by farm households with and without off-farm income was found to be highly significant at 1% percent level of confidence, (3) Farm households with off-farm income could get economic profit around 49 thousand riels per hectare from rice enterprise, while farm households without off-farm income lost around 38 thousand riels per hectare due to poor performance of the crop, and (4) the results of production function analysis indicated that three important factors of production consisting of input investment, land and labor contributed to rice output significantly. Based on the standardized coefficient beta of each variable, it can be implied that if farmers could increase operating expenses on inputs by one percent, rice output would increase around 0.439 percent, holding other factors constant. Similarly, one percent increase in cultivated area, rice output would increase by 0.809 percent, holding other factors constant. One percent increase in the amount of labor used on rice cultivation, rice output will increase about 0.200 percent, holding other factors constant. Farm households with off-farm income harvested rice output around 0.205 percent higher than farm households without off-farm income did.