On-Farm Income Diversification Decisions Of Rural Farm Households In Enugu State, Nigeria

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.