NON – FARM INCOME, PRODUCTIVITY AND WELFARE STATUS OF YAM-BASED FARMING HOUSEHOLDS IN SOUTHWEST, NIGERIA.

Abstract

The study examined the Non - Farm Income, Productivity and Welfare Status of the Yam-Based Farming Households in Southwest, Nigeria. The objectives of the study were to: identify the types of non-farm activities engaged by the farmers, the reasons for their engagement and the extent of contributions to total household income; determine the factors that influence yam- based farming households’ decision to participate in non-farm income activities; evaluate the level of productivity of the yam- based farming households; assess the welfare status of the farmers; and estimate the effect of non- farm income and productivity on welfare status of farmers in the study area. Primary data used in the study were obtained from 345 respondents selected through a multistage sampling procedure. Data were analyzed using descriptive statistics, probit regression model, total factor productivity, fuzzy set theory and two stage least square. The result of the study showed that majority of the respondents (93.7%) were 60 years or less old with an average age of 46years which indicated that the farmers were in their economically active age. The study also showed that yam production was dominated by married men who were highly experienced and educated. The majority of the farmers engaged in one or more non- farm income activities. Some of the activities were; bricklaying, tailoring, restaurant dealer, iron works, teaching and others. The farmers had one or more reasons for participating in non-farm activities. The study also showed that non-farm income activities contributed about 50.77% to total household income of the yam – based farmers in the study area. The probit regression model result of the factors influencing the decision of the yam- based farming households to participate in non-farm income activities revealed that out of eleven included variables only four variables of education status, household size, access to social amenities and closeness to urban center positively influenced the decision to participate in non- farm income activities while sex, farm size and access to credit facilities though significant negatively affected the probability of participating in non-farm income by the farmers. The distribution of the Total Factor Productivity (TFP) indicated that, 170(52.17%) ,54(17.39%) and 96(30.44%) of the respondents have TFP >1, TFP =1 and TFP<1 respectively. The fuzzy set result revealed that the capability to attain a desired state of welfare was highest with respect to ownership of economic asset and lowest with respect to security. Based on the welfare indexing for the elementary indicators of the welfare dimensions, the composite welfare index for farmers in the study area by the fuzzy logic aggregation was estimated at 0.2270. This indicates that the capability of the farmers to attain the valued capabilities set available to them is approximately 22.70%. The multidimensional welfare status index threshold was set at 0.5 with 36.47% of the farming households attaining state of better welfare status. The result of the two stage least square (2SLS) using total factor productivity index and non-farm income as instrumental variables on effect of non- farm income and productivity on the welfare status of the farmers showed positive relationship between the non-farm income and agricultural productivity on welfare status. The study recommends the promotion of non-farm employment as a good strategy for supplementing the income of yam –based farming households as well as sustaining equitable growth among rural households in Nigeria because non-farm income was not only a source of income for the participating households but a source of investment fund to boost agricultural productivity.