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DETERMINANTS OF INCOME DIVERSIFICATION AMONGST RURAL FARM HOUSEHOLDS IN SOUTHWEST NIGERIA

Keywords: Herfindal Index , Non-farm Activities , Rural Farm Households , Social and Community Service , Animal wealth

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Abstract:

This study aims to analyze the determinants of household income diversification and the share of income sources to total household income among the rural farm households in southwest Nigeria. The study drew a sample of 411 rural farm households through a multi-stage sampling technique from three states in southwest Nigeria and the data obtained were analyzed using the Herfindal index and Tobit regressions. Results indicate that the level of income diversification among rural farm households in southwest Nigeria depicted by inverse of Herfindal index was 2.82. An average rural farm household in southwest Nigeria had its members involving in three income generating activities with two farming activities and one non-farm job. Ninety five percent of rural farm households had their members involving in non-farm activities with non-farm self-employment contributing the largest share of non-farm income. Education, experience in any non-farm activity and distance to urban centre were the major determinants of income shares from different sources of non-farm activities while increase in the size of household, per capita landholding and per capita animal wealth significantly increased the income diversification of the rural farm households in southwest Nigeria. Implication is drawn for provision of enabling environment for the establishment of more non-farm self employment jobs.

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