Using primary survey data from two agro-ecologically distinct rural communities in eastern Nigeria, this paper examines the determinants of livelihood diversification away from agriculture as well as the manner in which different agro-ecological determinants affect such diversification. The probability of participating in non-agricultural activities was estimated in an endogeneity-controlled, two-step probit model employing data on household assets, demographics, human capital, as well as a proxy for differences in agro-ecology. Results show that not many households remain undiversified as they combine activities within farming, commerce, skilled non-farm and low skilled non-farm sectors. Both human capital and the agro-climactic variables were found to determine the nature of diversification. Against the backdrop of the recent deagrarianisation thesis, the study found that despite high incidence of diversification, agriculture is not in any significant decline. Policies thus should be aimed at both agricultural and non- agricultural activities. Policies based on the assumption that agriculture is no longer relevant will hurt farming and retard development.
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Paper provided by EconWPA in its series Microeconomics with number
0508001.