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The composition and determinants of rural non-farm income diversification in Nigeria

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  • Olugbire, Oluseyi Olutoyin
  • Obafunsho, Oluwatosin Esther
  • Olarewaju, Titilope Omolara
  • Kolade, Ruth Ibukun
  • Odediran, Festus Abiodun
  • Orumwense, Lucy Adeteju

Abstract

Farming has been considered the main source of income for rural households in Nigeria, despite their involvement in other income-generating activities. Focusing on income derivable from farming alone may be partially responsible for the ineffective poverty reduction strategies in Nigeria. Using the National Living Standard Survey data collected by the National Bureau of Statistics, this paper investigated the composition and determinants of non-farm incomes of rural households in Nigeria. The results show that the share of farm, non-farm wage (NFW) and self-employment (NFS) incomes in total household incomes were 24.3%, 43.0% and 23.7% respectively. Households whose heads are males or have formal education had an increased likelihood of households’ participation in NFW activities by 6.2% and 10.9% points respectively, while larger household size decreased it by 0.6% point. Furthermore, possession of capital assets, being a male household head and age increased the likelihood of participation in NFS employment activities by 33.3%, 1.5% and 0.3%; while larger farm size and household size decreased it by 1.6% and 0.1% respectively. The study concludes that any policy targeting poverty reduction should focus on providing a favourable environment for poor households to access non-farm activities in the studied area.

Suggested Citation

  • Olugbire, Oluseyi Olutoyin & Obafunsho, Oluwatosin Esther & Olarewaju, Titilope Omolara & Kolade, Ruth Ibukun & Odediran, Festus Abiodun & Orumwense, Lucy Adeteju, 2020. "The composition and determinants of rural non-farm income diversification in Nigeria," Journal of Agribusiness and Rural Development, University of Life Sciences, Poznan, Poland, vol. 57(3), March.
    • Handle: RePEc:ags:pojard:356106
    DOI: 10.22004/ag.econ.356106
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    References listed on IDEAS

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    1. Anh, Tran Thi Tram & Epprecht, Michael & Minot, Nicholas & Trung, Le Quang, 2006. "Income diversification and poverty in the Northern Uplands of Vietnam:," Research reports 145, International Food Policy Research Institute (IFPRI).
    2. Olugbire, Oluseyi Olutoyin & Obafunsho, Oluwatosin Esther & Olarewaju, Titilope Omolara & Kolade, Ruth Ibukun & Odediran, Festus Abiodun & Orumwense, Lucy Adeteju, 2020. "The composition and determinants of rural non-farm income diversification in Nigeria," Journal of Agribusiness and Rural Development, University of Life Sciences, Poznan, Poland, vol. 57(3), March.
    3. Lanjouw, Peter, 1998. "Ecuador's rural nonfarm sector as a route out of poverty," Policy Research Working Paper Series 1904, The World Bank.
    4. Anderson, Dennis & Leiserson, Mark W, 1980. "Rural Nonfarm Employment in Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 28(2), pages 227-248, January.
    5. Mohammad Abdul Malek & Koichi Usami, 2009. "Determinants of Non-farm Income Diversification in Developed Villages of Bangladesh," American Journal of Economics and Business Administration, Science Publications, vol. 1(2), pages 141-149, June.
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    1. Olugbire, Oluseyi Olutoyin & Obafunsho, Oluwatosin Esther & Olarewaju, Titilope Omolara & Kolade, Ruth Ibukun & Odediran, Festus Abiodun & Orumwense, Lucy Adeteju, 2020. "The composition and determinants of rural non-farm income diversification in Nigeria," Journal of Agribusiness and Rural Development, University of Life Sciences, Poznan, Poland, vol. 57(3), March.

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