Determinants of Participation in Nonfarm Economic Activities in South East Nigeria: A Tobit Analysis Approach

Abstract

This study had looked at the involvement of small scale farmers in nonfarm income generating activities in the south east region of Nigeria. Specifically it investigated the probability of farmers participating in nonfarm income generating activities. A Tobit model was used to analyse cross sectional data collected from 180 farmers selected by means of systematic random sampling technique. The result shows that on the average the farmers were aged 48 years and were characteristically smallholder farmers. All the coefficients had the hypothesized signs in line with a priori expectations. Eight of the variables including age of the farmers, level of formal education, dependency ratio, remittance, farm size, size of farm income, farming status and distance to nearest city were statistically significant. The coefficients of age of the farmers, remittance, and farm size as well as size of farm income, farming status, and distance to nearest city are all negative. These imply that a unit decrease in age of the farmer, remittances, farm size of farm income, time spent on farming activities and distance to cities would bring about increased participation of farmers in nonfarm income generating activities. A deliberate policy of rural development through massive provision of infrastructures will see more people climbing out of poverty through participation in nonfarm activities.