Farm-Level Analysis Of Off-Farm Income And Farm Capital Accumulation Among Small-Scale Farmers In North-Central Nigeria

Abstract

The study analysed off-farm income and farm capital accumulation among small-scale farmers at farm level in North Central Nigeria. Multistage sampling technique was used to select 360 respondents, comprising participants and non-participants in off-farm work. The participants were disaggregated into three main typology namely, agricultural wage, non-agricultural wage, and self-employments. Data for the study were obtained from primary source with the aid of standard questionnaire and analysed using descriptive and inferential statistics. Self-employment was the dominant (42.78%) off-farm work. Full-time participants were mainly (38.50%) in non-agricultural wage employment. Participants with off-farm work experience of 14–19 years were mostly (55.20%) in self-employment, while 61.50% of the farmers with off-farm work experience of 26–33 years were in agricultural wage employment. Off-farm income constituted 50.28% of total household income. The strongest and weakest predictors of enterprise diversification were funds for farm investment (0.65) and crop failure (0.36), respectively. The mean entropy of diversification was 0.67. Farm income (p < 0.01, t = –10.237) and off-farm income (p < 0.01, t = 2.536) significantly affected market labour supply. Self-employed participants had the highest average off-farm income (N266,680.78). Farm capital differed significantly (p < 0.05) among off-farm work typology. Farm capital was unequally distributed among the respondents (G = 0.56). Causality ran from farm capital to off-farm income. Participants had significantly (p < 0.01) less total farm liabilities, debt-asset-ratio, and loan for farm production than non-participants. Participants significantly (p < 0.01) incurred more yam production costs and total variable costs than non-participants. Participants had significantly (p < 0.01) higher average technical efficiency estimates in yam and cowpea enterprises but less average profit efficiency estimates than non-participants. It was concluded that small-scale farmers had average reliance on off-farm income for the purposes of generating funds for farm investment and increasing farm capital. Although, self-employment generated higher off-farm income, farm capital was highest among farmers in agricultural wage employment. Thus, off-farm income was diverted to non-farm enterprises, signaling a gradual drift from core farm production. It was recommended that small-scale farm households should increase off-farm income’s share invested in farming so as to raise production level, farm capital and obtain higher returns so that they could take full part in agribusiness; that IFAD and other stakeholders in rural development should encourage farmers in non-agricultural and self-employments to re-invest off-farm income in farming; and the Federal Government and IFAD should train farmers on the management of additional income from off-farm work. These measures would facilitate the development of the agribusiness sector and forestall dual farm structure from adversely affecting food production by small-scale farmers.