Abstract

This paper analyses the overall impact of household nonfarm income and employment on agricultural investment as well as technical efficiency of rural farm households. we are interested in the hypothesis that income from non-agricultural labor relaxes credit constraints. Combining three waves of household survey on agricultural activities for five provinces in Cambodia with the geo-referenced factory data over the period of 2013-2017, I demonstrated that non-agricultural earnings relax credit constraints for areas where there is lack of access to credit facility. Household spend significantly more on spend significantly more on overall expenditure, particularly on land preparation, fertilizer, and some other expenditure items. The non-farm income also significantly increased agricultural cultivation mechanization, and diversification into livestock, which requires higher capital with higher risks. There is also some evidence showing that the proximity with garment factories significantly drive the non-farm employment and earnings.

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