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Survey Of Farm Source Of Income Among Residents
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Diversification has
been analysed as a rational response by households to lack of
opportunities for specialisation, though was initially considered not
the most desirable option (Warren, 2002). Ellis and Freeman (2005)
indicated that rather than promoting specialisation within existing
portfolios, upgrading them through diversification could be more
realistic and relevant to sustain agriculture. But Kimenju and Tschirley
(2011) argued that to achieve rapid growth in rural areas and the
economy as a whole, it is widely recognized that countries must go
through an agricultural transformation, which involves more
specialization by rural households, not more diversification.
Resolving
this tension between the clear benefits from diversification to rural
households in the short- and medium-term is a major policy challenge to
Nigerian government (Olugbire, Falusi, Adeoti, Oyekale& Adeniran,
2011). Diversification is being advocated in many parts of rural Nigeria
today to ensure food security. Hence, the need to investigate into the
income diversification decisions among rural households.
1.2 Statement of the Problem
Nigeria’s
agricultural sector has a high potential for increased growth, but this
potential is not being fully realised. Agriculture still suffers from a
wide range of distortions and influences that limit its contribution to
food sustainability. Nigeria Bureau of Statistics
(2013) maintained
that agriculture is the largest sector of the economy, yet the fastest
growing segments are wholesale, retail trade and telecommunication.
Income instability has been a major challenge to the rural farming
households and this has adversely affected agricultural productivity.
Hence, there is need for a coherent action at all levels of farming
activities of the households in order to stabilise her reportedly very
volatile income.
Most Nigerian studies on income diversification focused on non-farm diversification
(to mention a few: Okali, Okpara &Olawoye, 2001; Babatunde &Qaim, 2009; Ibrahim &
Onuk,
2009; Ibekwe et al., 2010; Ijaiya et al., 2010; Idowu,
Banwo&Akerele, 2011; Adebayo et al., 2012; Tasie, Offor& Wilcox,
2012). On the other hand, few studies within the past ten years have
been carried out on income diversification with respect to farm and
farm-related activities only. These studies highlighted farming as an
occupation of rural farmers but very few considered the factors driving
the farmers’ decisions to diversify income among various farming
activities. Again, income diversification has received minute attention
in agricultural economics and extension literatures in Nigeria
(examples: Enete&Achike, 2008; Babatunde &Qaim, 2009; Ibrahim,
Rahman, Envulus&Oyewole, 2009; Ibrahim &
Onuk, 2009; Idowu,
Aihonsu, Olubanjo& Shittu, 2011; Adebayo et al., 2012;
Adepoju&Oyewole, 2014). The existing literature is somewhat
deficient in well-established principles on the use of indicators to
capture observed rural income diversification (Ijaiya et al., 2009).
Perhaps,
households that have more assets should be less risk averse and more
willing to participate in market production, while households with fewer
assets are more likely to settle for subsistence production in a desire
to avoid high transaction costs in selling crops and buying food
(Olale&Nazli, 2010). The researcher’s interest here is whether the
decisions they take is in the best pursuit of improving the general
economy and rural economy in particular. Understanding the decisions of
households with regard to how they allocate their income among various
farming activities is crucial for adjusting farming and rural policies.
Babatunde and Qaim (2009) affirmed that more research is needed to
understand what conditions lead to what outcomes in order to identify
appropriate policy responses. Hence, the gap this study seeks to fill is
to highlight the key factors driving rural households in their
decisions to diversify income among alternative farming activities
(on-farm diversification). This constitutes the problem of the study
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