Analysis of the Impact of Physical and Social Capital Asset Holdings on Poverty Among Farm Households in Nigeria.

Abstract

The study was conducted to analyze the impact of physical and social capital asset holdings on poverty among farm households in Nigeria as a contribution towards finding a panacea to the poverty plague in the agricultural sector. The study used secondary data obtained from the Nigeria living Standard Survey data conducted in 2003/2004. Data were analyzed using descriptive statistics, Forster-Greer-Thorbeck poverty measures and Propensity score matching. Results showed that 90% of the households were headed by males, 54% had household sizes of 1-4 and 79% were within the active productive age of less than 60 years while 62% had no formal education. About 96% were married whereas only 18.83% of the married household heads engaged in polygamous marriage. About 92% owned land. Specifically, 16.4% owned less than 1 hectare of land, 64.3% owned between 1-4.999 hectares while 19.3% owned 5 hectares and above. The incidence, gap and severity of poverty decreased with larger areas of land. Only 47% had agricultural equipment. Shockingly, about 95% of this group had equipment worth less than ₦20,000. The incidence, gap and severity of poverty decreased with higher naira values of agricultural equipment. As high as 95.6% of the respondents had less than ₦99,999 in livestock value. 1.5% owned between ₦100,000-₦199,999 while 2.9% owned ₦200,000 and above worth in value. The incidence, gap and severity of poverty were least among respondents with between ₦100,000 and ₦200,000 worth of livestock. Social capital indicators selected included community participation, trust and density of membership of local level associations. Respondents who participated in community programmes had lower incidence, gap and severity of poverty. Respondents who do not trust people had higher incidence, gap and severity of poverty. Those that did not belong to any association had the highest incidence of poverty.The impact of owning agricultural equipment, land and livestock increased incomes of such households by ₦16,969.35, ₦9, 607.74 and ₦3, 677.44, respectively. Hence, the impact of owning agricultural equipment, land and livestock reduced poverty incidence by 65%, 58% and 33%, respectively. Also the impact of participating in community programmes, trusting group members and belonging to associations increased incomes of such households by ₦11, 793.49, ₦4, 015.82 and ₦12,415.75, respectively. Hence, the impact of participating in community programmes, trusting other people and being members of local level associations, reduced poverty incidence by 42%, 100% and 58%, respectively. The study recommends opening up virile credit lines and procurement modalities that can empower the households to acquire agricultural equipment; to revisit the controversial land use act of 1978 with a view to eliminating all bottle necks that impede land acquisition by the farm households. The study also recommends strong reawakening of the farmers’ cooperative movement as well as the encouragement of farmers to join other local level associations.