Determinants of Income Diversification Strategies among Rice Farming Households in Nigeria: Evidence from GHS Panel-Data

Income diversification strategies which have the potential of reducing food poverty among rice farming households in Nigeria by broadening their income sources is low and remain a major constraint to food security. This study addresses a critical methodological gap by analyzing actual choices instead of relying on a continous generalized diversification index. It draws on nationally representative data from the Nigeria General Household Survey (2010/2011 and 2015/2016) Panel. Information extracted included age of household heads, household size , formal education status, sex, marital status, access to credit, access to phone, access to remittances, extension contact, membership of cooperatives, farm-size, geo-political zones, income diversification strategies (on-farm, off-farm and non-farm activities), exposure to shocks, income and food expenditure. Data were analysed using descriptive statistics and panel multinomial logit regression model. Results showed that 75.54% and 61.61% of the sample households were male in both periods, with an average age of 45 years and 67.2% and 69.0% had formal education. Furthermore, majority of the households were married in both periods 68.11% and 60.68%, with a mean household size of 6 persons and farm-size of 0.2 ha. Majority had no access to credit, remittances, extension contact and cooperatives. Result of income diversification strategies showed that in 2010/2011, 28.2% , 23.2%, and 48.6% of the rice farming households diversified into on-farm, off-farm, and non-farm activities and 7.1%, 24.8%, and 68.1% in 2015/2016. Access to phone (β=0.152) and being married (β=0.147) increased the probability of diversifying into on-farm activities, while access to credit (β=0.025) and membership of cooperatives (β=0.173) increased that of off-farm activities. Furthermore, formal education (β=0.045), exposure to shocks (β=0.051), and membership of cooperatives (β=0.004) increased the probability of diversifying into non-farm activities. Non-farm income diversification enhanced reduction of food poverty among rice-farming households in Nigeria