Agroforestry Practices, Livelihood Diversification, and Their Association With Wellbeing Status of the Smallholder Farmers in Sidama Region of Southern Ethiopia

Smallholder farmers practice various agroforestry systems; however, limited information exists on how these practices contribute to rural livelihoods and household wellbeing. This study aimed to assess livelihood diversification strategies, with particular attention to agroforestry‐based diversification, and their association with the wellbeing status of rural household. A community‐based cross‐sectional survey was conducted involving 405 rural households across three different agroecological zones of rural Sidama. The mean wellbeing score was computed based on data related to food security, land and livestock assets, savings, and housing conditions. The livelihood diversification index was computed using Simpson’s Diversity index, incorporating income sources from both agroforestry and nonagroforestry activities. Eleven variables, including the livelihood diversification index and various agroforestry practices, were included in a multivariate regression model to examine their association with household wellbeing. The findings revealed that both livelihood diversification (mean score: 0.73) and wellbeing (mean score: 0.45) were relatively low. However, agroforestry provided the majority of household income (79.9%) and was strongly correlated with wellbeing ( r = 0.67) and livelihood diversification ( r = 0.71). Among five income sources, crop income and forest product sales positively influenced household wellbeing, whereas loan utilization had a negative effect. Regression analysis further revealed that home garden agroforestry ( β = 0.13, p < 0.05) and backyard agroforestry ( β = 0.10, p < 0.10) significantly improved household wellbeing. These findings highlight that agroforestry‐based livelihood diversification enhances household wellbeing. Therefore, interventions should prioritize promoting diverse agroforestry practices, supporting home garden and backyard systems, and enhancing market access for agroforestry products to strengthen rural livelihoods.