EFFECT OF INCOME DIVERSIFICATION ON POVERTY STATUS AMONG RURAL FARMING HOUSEHOLDS IN OYO STATE, NIGERIA

Abstract

The study examined effect of income diversification on poverty status among rural farming households in Oyo State, Nigeria. Primary data was used with the aid of a well structured questionnaire and interview guide. The data collection process comprised of socioeconomic variables, input variables, poverty variables and income diversification variables among others in the study area A multistage sampling procedure was employed in the selection of 180 respondents used for the survey. Socio-economic characteristics, diversification and poverty attributes were analyzed using the parametric and non-parametric tools such as Descriptive Statistics (DS), Herfindahl Index (HI) and Probit Model among others. The results for the socioeconomic attributes of the respondents showed their mean age (62.5years), farming experience (42.4 years), monthly income (N76, 438.45k) and the household size (6 members). The results also showed that respondents that fell within the non-poverty (48.9%) and poverty group (51.1%), while those that diversified (77.8%) and non-diversified (22.2%) dichotomized poverty and diversification groups. Diversification was strongly determined by years of education (0.0012; P<0.10) and farm size (0.0108; P<0.01) while poverty was significantly influenced by gender (0.8393; P<0.05) and household size (0.5584; P<0.01). The Chi square result for the hypothesis tested revealed that marital status, education, farm size and household size influenced the diversification index of the respondents which is significant (P<0.01). Rural farmers should be encouraged to diversify their income sources to compensate for the off-season in the year when there is partial or zero production for household’s income sustainability and welfare. The classification of rural farming household result revealed that 77.78% of the farming household in the study area had diversified income sources as shown by IHHD<1.