Analysis Of Livelihood Diversification By Farming Households

Project and Seminar Material for Agricultural Economics and Extension

Analysis Of Livelihood Diversification By Farming Households


Abstract


This study focused on analyse of livelihood diversification by farming households in Kachia, Kagarko and Jaba Local Government areas of Kaduna State, Nigeria. Primary data were collected from 220 respondents using structured questionnaire. The statistical tools used to analyse the data were descriptive statistics, logit regression and t-statistics. The result of the analysis shows that the average age of the farming households were 44 years with an average household size of 7 persons. Majority (64%) of the respondents were not literate. The respondent had an average farming experience of 18 years. About 90% of the respondents do not have access to credit; the respondents had an average farm size of 1 hectare. However, 85% of the farmers do not belong to any cooperative association while about half 50% of the respondents had no other source of income. The result of this study also shows that all the households derived income from farming which in average account for 60.6% of the total household income. Crop production provides about 51.3% of total income. More than half of the household derived income livestock enterprises which however account for only 9.3% of total income. The estimated coefficients of the Logit model, along with the standard error, t-values and marginal effect are presented. The likelihood ratio test was 63.259 with 6 degree of freedom is significant at (p≤0.01). The t-test indicated that there was significant difference between output, income and level of living of household that are involved in livelihood diversification and non-diversifying household. The result shows that the output, income and level of living had significance on the household that are involved in livelihood diversification at p< 0.05 level of probability.Lastly, among the major constraints to livelihood diversification in the study area were: lack of credit facilities, poor asset base, lack of awareness and training facilities, fear of taking risk and lack of opportunities in non-farm sector. It could be concluded that engagement in off-farmincome generation activities decreases with farming experience while it increases with male-headed household, education, credit and market. It is recommended that the monetary authority in collaboration with the government should promote non-farm employment by ensuring farmers access to credit.


Table of Content


  • Title Page
  • Certification
  • Dedication
  • Acknowledgement
  • Table of Content
  • List of Tables
  • Abstract

Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objective of the Study
  • 1.4 Research Questions
  • 1.5 Research Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms
  • 1.10 Organisations of the Study

Chapter Two:

Review of Literature

  • 2.1 Conceptual Framework
  • 2.2 Theoretical Framework
  • 2.3 Empirical Review

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Population of the Study
  • 3.3 Sample Size Determination
  • 3.4 Sample Size Selection Technique and Procedure
  • 3.5 Research Instrument and Administration
  • 3.6 Method of Data Collection
  • 3.7 Method of Data Analysis
  • 3.8 Validity of the Study
  • 3.9 Reliability of the Study
  • 3.10 Ethical Consideration

Chapter Four:

Data Presentation and Analysis

  • 4.1 Data Presentation
  • 4.2 Analysis of Data
  • 4.3 Answering Research Questions
  • 4.4 Test of Hypotheses

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • REFERENCES
  • APPENDIX
  • QUESTIONNAIRE

Chapter One


Introduction

1.1 Background to the Study

Agriculture has been an important sector in the Nigerian economy in the past decades and is still a major sector despite the oil boom. Basically it provides employment opportunities for the teeming population, eradicates poverty and contributes to the growth of the economy. Despite these however, the sector is thus characterized by low yields, low level of inputs and limited areas under cultivation (Izuchukwu, 2011). It involves small scale farmers scattered over wide expanse of land area, with small holding ranging from 0.5 to 3.0 hectare per farm land. It is characterized by rudimentary farm systems, low capitalization and low yield per hectare (Kolawale and Ojo, 2007). The roles of agriculture remain significant in the Nigeria economy despite the strategic importance of the oil sector. Agriculture provides primary means of employment for Nigeria and accounts for more than one third of total Gross Domestic Product (GDP) and labour force (Ismaila et al., 2010).

Nigeria’s agriculture at present is characterized by weak and inefficient production system, decade infrastructure and risk and uncertainty. Thus, rural household are now constrained to develop a strategies to cope with vulnerability of agriculture production system through livelihood diversification (1). However, most rural households are involved in agricultural activities such as animal and crop production as their primary source of livelihood, they also engage in other income generating activities to improve their primary source of income. In other words, only very few rural household that are involved in just one activity (2). Livelihood diversification plays a very significant role in the socio-economic life of the rural household and the need to analyse rural farmers’ livelihood becomes supreme. In Kaduna State as well, rural households diversify or engage in other income generating activities as a way of avoiding risk from agricultural disasters or failure, some households diversify into other agricultural sectors/farming strategies while others diversify into non-farm activities like tailoring, crafts and skills like knitting, plaiting of hair/barbing, others engage in civil service jobs.


1.2 Statement of the Problem

Diversification of livelihoods has been one of the country’s aim since 2000 as a way to encourage rural communities to utilize the available stock of natural resources to reduce their dependence on mining. Diversification initiatives were expected to improve the welfare of households as well-diversified livelihoods ensure the survival and advancement of standards of living (Ellis, 1998).

The government has developed several policies aimed at motivating Nigeriansto diversify their livelihoods. However, in Jaba Local Government areas of Kaduna State the choice of livelihood diversification activities that households employ in their exploitation of available natural resources are unknown. Further the choice and determinants of livelihood diversification activities have to be targeted to help households in coming up with lucrative rural development programs for policies and activities. There is therefore a gap in knowledge on the choice and determinants of household livelihood diversification activities in Jaba Local Government areas of Kaduna State. The study aimed at filling this gap in knowledge.


1.3 Objectives of the Study

The purpose of this study was analysis of livelihood diversification by farming households in Jaba Local Government areas of Kaduna State.
The specific objectives were:

  1. To determine the Livelihood Activities Engage in by Farmers
  2. To examine the Impact of livelihood diversification on farmers’ income
  3. To evaluate Impact of livelihood diversification on farmer’s level of living

1.4 Research Question

The study will provide answers to the following questions

  1. What are the Livelihood Activities Engage in by Farmers
  2. What is the Impact of livelihood diversification on farmers’ income ?
  3. What is the Impact of livelihood diversification on farmer’s level of living

1.5 Hypothesis of the Study

The study tested the following hypothesis;

  • Ho: There are no Socio-economic and institutional variables influencing livelihood diversification

1.6 Significance of the Study

Government of Nigeria has put in place different policies to increase economic growth. These policies include the ADP, SAP, Trade Policies and NEPEP. This study is important for government as it gives guidance on how to plan for livelihood diversification of activities based on the choices made by households. This affects government spending in line with its policy to encourage diversification. The information generated by this study will empower rural households in their choice of how best to plan the diversification of their livelihoods. Furthermore, relevant organizations such as SPEDU, BCT, EDD, BNE and IS could draw appropriate strategies and design programs geared towards expanding livelihood diversification in the rural areas. The information will be reported as a journal article to reach different entities.

This study provides empirical evidence of the determinants of household choice of livelihood diversification activities in Jaba Local Government areas of Kaduna State. The study also provides extension workers and NGOs with information on the choice and determinants diversification to target when assisting households in the area to engage in diversified livelihoods that can benefit them. The study is expected to provide scientists with literature on choice and determinants of household livelihood diversification activities.


1.7 Scope of the Study

The study will be the analysis of livelihood diversification by farming households in Jaba Local Government areas of Kaduna State. The study is limited to some selected farming households in Jaba Local Government areas of Kaduna State. Hence, the respondents for this study will be obtained from and among the farming households in Jaba Local Government areas of Kaduna State.


1.8 Limitation of the Study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. However, the researcher were able to manage these just to ensure the success of this study.


1.9 Definition of Terms

Motivation:

This the process through which individual are charged to increase their action or performance either by internal or external factors.

Rural Livelihoods:

Rural Livelihoods are composed of the activities that provide the means of household survival and long-term well-being (Stephen and Lenihan 2010)..


1.10 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows.

  • Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  • Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  • Chapter three deals on the research design and methodology adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study.

Chapter Five


Summary, Conclusion and Recommendations

5.1 Summary

Livelihood diversification activities have become an important component of livelihood strategies among farming households in most developing countries, and non-farm income diversification has recently received increased attention in discussions about rural development and poverty reduction.

This present study was conducted to analyze the contribution of livelihood diversification strategies in enhancing poverty reduction among farming household in the study area.Data was collected from a sample of 164 farming households in two local government. Descriptive statistic and simpson index of diversification was estimated to described the nature and extent of livelihood diversification activities. The factors influencing adoption of different sources of livelihood activities was examined using censored Tobit regression model. Foster Greer Thorbeck measure of poverty was used to analyze the degree of poverty among the 164 respondents in the study area. And descriptive statistic was used to analyzed the contributions of livelihood diversification and constraints affecting livelihood diversification in the study area.

The results showed trade is by far the most important single additional source of livelihood for the rural households, providing about 72% of total income,Artisanship accounted for 27% and Civil service/private salaried jobs 44%. Conversely, the results for extent of livelihood activities shows that majority (70%) of farming households depend on one source of livelihood in addition to farming. Some 25% farming households moderately diversify (depend on two sources of livelihood) Only 5% were highly diversified(more than two sources of livelihood). The results of Tobit regression model shows that five (5) out of the seven (7) independent variables were positively related to the dependent variable (Simpson index of diversification). And three (3) variables age, gender and education were statistically significant at p<0.05, p<0.01%, and p<0.05 respectively.


5.2 Conclusions

Based on the findings of this study, it could be concluded that engagement in non-farm and off-farm income generation activities will increases farmers’ livelihood. The finding further revealed that diversified household experienced a significant increase of N93, 373.2 on average as a result of diversifying than non-diversified household. This implies that diversification had a significant impact on income and level of living of the farmers in Kaduna State, Nigeria. Since lack of credit facilities is overwhelmingly acknowledged as the important constraints inhibiting livelihood diversification, the rural financial systems need to be revamped. Non- governmental organization and other donor agency in collaboration with the government can link farmers to access credit through reduced interest rates and possibly a waiver of collateral requirement for a small amount of loans.


5.3 Recommendation

Based on the findings of this study the following recommendations were made:

  1. It is recommended that in order to increase small/medium enterprises, formation of cooperative societies and encourage farmers to join the existing cooperative societies, this will ensure that farmers pool their resources to achieve economies of scale for large scale business.
  2. It is therefore recommended that Government should establish skills acquisition centers for rural farming households to acquire more skills to diversify more into non-farm activities so that income realized will be channeled back to boost agriculture. Also, Government should partner with organizations like World Bank towards sponsorship of entrepreneur skills in the rural areas.
  3. There is need for improvements in the physical infrastructure – including roads, electricity, water, and telecommunication in the rural areas by Government.
  4. It is recommended as a matter of urgency that Government should provide quality education to the masses (especially of the girl-child – being the most disadvantaged), the type of education that will make households acquainted with educational programmes (formal and non-formal), become aware of benefits of cooperative societies, and accessibility to credit schemes which can make them self-reliant. This could increase the off-farm activities that could generate more income for the household and thereby reduce poverty among them.
  5. Therefore, it is recommended that Government provide sufficient resources to develop infrastructure i.e improvements in the physical infrastructure – including roads, electricity, water, and telecommunication, organize public services and implement development programs.
  6. Furthermore, there is need for government to empower women in terms of equal access to productive resources and employment opportunities.

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