EFFECT OF LIVELIHOOD INCOME GENERATING STRATEGIES ON RURAL AND URBAN FARM HOUSEHOLD EXPENDITURE IN ABIA STATE, NIGERIA

Abstract

This study analyzed the nature and effect of livelihood income generating strategies on rural and urban farm household expenditure in Abia State, Nigeria. A multistage simple random sampling technique was used to collect data from 120 (60 rural and 60 urban) farm household heads, using a well-structured questionnaire. Data collected were analyzed using the Simpson diversification index (SDI) and Ordinary Least Square regression (OLS). The Simpson diversification index (SDI) result showed that the majority of the rural (90.80%) and urban (80.80%) farm households diversified their livelihoods into diverse income strategies. About 46.70% of the rural farm households and 13.30% of urban farm households were highly diversified with index level of ≥0.51. 15.80% and 42.50% of the rural and urban farm households were in the low level of diversification range (0.02−0.25) respectively while 28.30% and 25% of the rural and urban farm households were in moderately diversified category. This is with an index score of 0.26-0.50 respectively. The OLS regression result showed that diverse livelihood income generating activities have an important influence on household livelihood outcomes. The coefficients of Off-farm Income, Non-farm Income, and On-farm Income & Off-farm Income strategies were statistically significant and positively related only to livelihood outcome of the rural farm household at different probability levels; while Non-farm Income and On-farm Income & Non-farm Income strategies were significant and positively related only to livelihood outcome of the urban farm household at different probability levels. Non-farm Income strategies were significant and positively related to livelihood outcome of both rural and urban farm households at 10% and 1% probability levels respectively. Based on the findings, policymakers, together with rural and urban development actors are encouraged to promote diverse income generating strategies especially, the non-farm income activities in both areas in order to support a sustainable livelihood outcome and poverty reduction of farm households in the areas.