Effect of farm level economic efficiency on income poverty status of rural farm households in Kogi State, central Nigeria

Abstract

In this study, 320 farming households in Kogi State, central Nigeria were interviewed in order to estimate their income poverty status, efficiency levels, and influence of efficiency levels on poverty. The 1.90USD/day global poverty line was used to classify respondents into poor and non-poor. Relative poverty analysis was conducted to segregate farm households into moderately poor and extremely poor using the Mean Per Capita House Hold Expenditure (MPCHHE) approach. Stochastic Frontier techniques were applied to estimate efficiency levels while logistic regression was applied to investigate influence of efficiency on income poverty. Findings show that 80% of farmers were male; average age was 51 years and average holding was 1.53 ha. Furthermore, 84.1% were poor based on the global poverty line. Based on MPCHHE, 13.75% and 48.12% were moderately and extremely poor respectively. Technical and allocative efficiencies averaged 0.52 and 0.38 respectively, indicating high level of non-optimization of resources. Logistic regression result shows that poverty will likely reduce by 28% point for any 10% point increase in economic efficiency. Other poverty drivers include farmland size, education, access to credit and gender. Improved funding and training for improved extension services to help farmers increase their outputs, minimize wastages and improve incomes are recommended.

Keywords:

• efficiency
• farming
• household
• poverty

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by Human Sciences Research Council of South Africa.