Off-farm income diversification among rural farm households in Nigeria

Abstract

This paper aims to analyze the extent of off-farm income diversification of farm households in rural areas of Nigeria by age, gender, educational qualification, farm size, household size and across the different regions in the country. The determinants of such diversification were also identified. Data for this study were obtained from 836 rural farm households using the Nigeria General Household Survey, 2013. The Herfindahl Index was employed to analyze the share of income from different income generating activities, extent of off-farm income diversification. Tobit Regression Model was used to identify the determinants of such diversification.An estimate of 0.28 was observed for the Nigerian rural farm households with a higher extent of diversification in the Northern regions. Males, older farmers, and farmers without formal education had a higher extent of diversification. The results show that having higher landholdings, post-primary education, access to electricity and location are major factors. Identifying the extent of diversification into the different off-farm sectors is relevant to inform policy and provide opportunities for promoting the different off-farm sectors with an ultimate goal of improving rural farm households’ livelihoods. This has its resultant effect on development of the entire rural space.