Livelihood Diversification and Farmers' Well-Being: Lessons From South-West, Nigeria

Seyi Olalekan Olawuyi and Tosin Dolapo Olawuyi ()
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Tosin Dolapo Olawuyi: University of Fort Hare, South Africa

Journal of Developing Areas, 2022, vol. 56, issue 4, 231-246

Abstract: Livelihood diversification is an adaptation and a coping mechanism used by individuals to mitigate tragic episodes, and to build a buffer against social, environmental, health and economic shocks, as well as other extreme events which disproportionately impact on people's lives, in a bid to ensuring sustained livelihood and improved living conditions. The effect of livelihood diversification on farmers' well-being in South-West Nigeria was therefore investigated using the dataset elicited from 359 farmers randomly drawn from the study area. The data were analyzed with composite score technique, simpson index of diversity, fractional probit, and fractional heteroskedastic probit models. The results revealed that livelihood diversification pattern among the farmers was at a moderate level, while farmers' categories of well-being status were partly associated with the levels of livelihood diversification in other sectors considered remunerative with high returns. Findings also indicated that age of the farmer, primary occupation, farm size, neighborhood effect, incidence of shocks, and the farmer's food insecurity status had significant relationships with the rate of livelihood diversification in the study area. Meanwhile, age of the farmer, years of formal education, livelihood diversification, access to credit, neighborhood effect, primary occupation of the respondents, and farming experience significantly influenced farmers' well-being status. In essence, this study has provided converging lines of evidence and demonstrated that livelihood diversification and other farmers' and farm-based characteristics were meaningful predictors of the differences in the categories of farmers' well-being status in the study area. Arising from the findings, the study recommended human capital development through free and/or affordable educational system in the rural areas, as well as diversification of income sources among the farmers, while informal social protection can also be scaled up through social networks and neighborhood effect hinged on collective norms of solidarity, reciprocity, altruism and obligations towards achieving an effective cultural and social driven development.

Keywords: Livelihood diversification; well-being; Simpson index of diversity; composite score; farmers; fractional probit; fractional heteroskedastic probit; Nigeria (search for similar items in EconPapers)
JEL-codes: D10 Q12 Q15 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:jda:journl:vol.56:year:2022:issue4:pp:231-246

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