ABSTRACT
There has been a drive on the part
of consumers, producers, researchers and policy makers for a transition toward
a new phase of agriculture. Within this vision, diversifying income among farm
households is critical to this drive. In the process of traditional economy
transforming into modern economy in Nigeria, farmers’ diversification phenomena
has arisen and developed and will continue a long time in the future. Income
instability has been a major challenge to the rural farming households and this
has adversely affected agricultural productivity. This necessitated the study
on on- farm income diversification decisions of rural farm households in Enugu
State, Nigeria. The study adopted the survey research design. Five objectives
and one hypothesis guided the study. The sample of the study comprised 240
respondents from three agricultural zones sampled through multi-stage random
sampling technique. Researcher-developed questionnaire was the instrument used
for data collection and the instrument was validated by three experts in
agriculture. Cronbach’s alpha method was used to determine the internal
consistency of the items and the result yielded a coefficient of 0.78 and was
therefore reliable. The researcher with the help of three research assistants
distributed the questionnaire which were used for data analysis. Data were
analysed using descriptive and inferential statistics: statistical mean,
multinomial logit model, participation index, exploratory factor analysis and
chi-square test. The study found that women (62.13%) dominated the rural farm
household heads. Forty-two percent of the household heads were within the
highly productive age range of 41-50 years. Twenty percent of the household
heads attended primary school while 26% and 45% attended secondary and tertiary
institutions respectively. Farming was the major occupation of majority
(43.83%) of the respondents with majority having a household size of 1-5
members. Most of the farmers (53.19%) have a farm size of not more than 2
hectares. Most of the farmers (50.21%) practised mixed farming. Average annual
on-farm income of the farm households was N158,000.00, N132,000.00
and N215,000.00 for crop farming, livestock farming and mixed farming
respectively. Factors influencing the choice of income sources were identified
as gender (p<0.05), age (p<0.01), educational level (p<0.10), farm
size (p<0.10), on-farm annual income (p<0.01) and access to credit
facilities (p<0.05). The participation index of gender (men and women) on
income diversification showed that men dominated women in decision making with
a mean score of 2.64 and 2.62 respectively. Institutional, financial and
infrastructural constraints were the major barriers faced by rural farm
households in raising income from various farm sources. The result of the
hypothesis showed that there was a significant (P<0.01) and positive
correlation between socio-economic characteristics of rural farmers and their
choice of income sources. It was recommended among others that farmers should
join a farmers association in order to gain better access to extension
services, farmers should identify and include high-valued agricultural products
in their farm businesses in order to expand diversification portfolios and
government should rehabilitate abandoned rural roads in order to reduce high
cost of transportation.
CHAPTER ONE
INTRODUCTION
1.1 Background Information
Nigeria
has been an agricultural economy since the colonial period up to the 1970s when
we witnessed the oil boom. The agricultural sector contributed over 60% to the
country’s Gross Domestic Product (National Technical Working Group (NTWG),
2009). From early 1970s to mid-1980s, rapid expansion of the oil sector played
a role in eroding the competitiveness of agriculture. The nation grew to rely
heavily on earnings from oil exports without making the investments needed to
diversify the economy through sustained agricultural growth (NTWG, 2009).
However, it has been realised that agricultural sector in Nigeria is currently
a key sector that can address the multiple challenges which has kept the
country from achieving broad-based economic growth, increasing household
incomes, increasing employment, and reducing food/nutrition insecurity and
poverty (Stakeholder’s Forum, 2009). The forum stated that agriculture provides
88% of non-oil foreign exchange earnings. According to NTWG (2009) and National
Bureau of Statistics (NBS) (2013), agriculture contributes about 42% of Gross
Domestic Product (GDP) as against 13-13.5% of Oil and Gas as well as employs
two-thirds of Nigeria’s entire labour force.
According
to Enete and Achike (2008), no less than a quarter of the world population
belongs to the farm households. One way or another, their livelihoods depend on
agriculture (Department for International Development (DFID), 2002). This is to
say that agriculture and allied activities are the mainstay of the people
living in rural areas (Pal and Biswas, 2011). According to National Planning
Commission (NPC) (2004), the bulk of agricultural production in Nigeria takes
place in the rural areas. Ogwumike and Akinnibosun (2013) stated
Farm
households have many challenges which include income variability (Adebayo,
Akogwu & Yisa, 2012). This is because high levels of income inequality are
likely to create a hostile atmosphere for economic growth and development
(Adepoju & Oyewole, 2014). Enete and Achike (2008) asserted that unstable
income of farm households could be accounted for by unfavourable weather changes,
outbreak of plague, pollution in coastal waters, eruption of negative
externalities, and other uncertainties which pose threats to farming activities
and yields, thereby causing income to fluctuate erratically. The continuous
increase in the rate of poverty in Nigeria and the dwindling nature of income
of individuals has made and still make people look elsewhere for succour
through income diversification (Adeyemi, Ijaiya & Ijaiya, 2007; Ijaiya,
Ijaiya, Bello, Ijaiya & Ajayi, 2009; Adebayo et al., 2012). There has been
a drive on the part of a vocal contingent of consumers, producers, researchers
and policy makers who call for a transition toward a new face of agriculture.
Within this vision, diversifying income with respect to farming system has emerged
to maintain ecosystem services critical to agricultural production (Bowman
& Zilberman, 2013).
Most
rural households in developing countries are undergoing the process of
diversifying their income sources (Zhao & Barry, 2013). Delgado and
Siamwalla (1997) and Gomes and Livdan (2004) opined that rural households
adjust their activities to exploit attractive new productive opportunities.
Rural households in many different countries have been found to diversify their
income sources allowing them to spread risk (Ellis, 1998, in Ibrahim, Rahman,
Envulus & Oyewole, 2009). The food crisis experienced in 2006 which soared
in 2007 (Stakeholders Forum, 2009) seemed to have driven Nigeria to delve into.....
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