Farm Households Income Sources Diversification Behaviour in Nigeria

Abstract

The time lag inherent in agricultural production leads to an atmosphere of imperfect knowledge which could be reduced by diversity in income sources. The study examined the farm households’ income sources diversification behaviour in South Western Nigeria. A multi-stage random sampling technique was used to select 250 rural farm households in the study area while the data collected were subjected to analytical techniques such as descriptive statistics, the Simpson index of diversity and Tobit regression model. The results show that the mean age of respondents was 41years while the majority (83.4%) were married. Most (79.2%) of the households were headed by men while 74.2 percent of the respondents were educated. The mean household size was 9 and the distribution of respondents by the type of diversity in income sources showed that the majority earned their income from production of two or more crops. The average number of income sources was 5 while the Simpson index of diversity revealed a high level of income diversification of 0.8 in the study area. Regression analysis shows, age, household income, household size, access to extension services, farming experience, distance to market, membership of association and marital status to be the main determinants of diversity of income sources among respondents. It was recommended that in order to improve the standard of living of rural households, effort should be geared towards diversifying to high-value crops.

Key words: Diversification, income, households, Simpson index, farm, production, crops.