Agricultural commercialisation, poverty reduction and pro-poor growth: evidence from commercial agricultural development project in Nigeria

Abstract

Commercial Agriculture Development is widely seen as a pathway to agriculture commercialization, poverty reduction and pro-poor growth in developing economies. Using a counterfactual approach, this study assessed the impact of the Commercial Agricultural Development Project (CADP) in Nigeria on poverty status of beneficiaries and non-beneficiaries; determine its impact on commercialization of beneficiaries and non-beneficiaries and ascertain the pro-poor impact of the Project. Data from 1199 households comprising 678 beneficiaries and 521 non-beneficiaries were used for analysis. Propensity score matching was used to select comparable observations which reduced the sample size to 1142 observations: 655 beneficiaries, 487 non-beneficiaries. Data were analyzed using descriptive statistics, propensity score matching technique, Foster-Greer-Thorbecke (FGT) poverty measures, Average Treatment effect on the Treated (ATT) and Poverty equivalent growth rate (PEGR) pro-poor measure. FGT poverty indices were lower for CADP Beneficiaries than the non-beneficiaries. The impact of the CADP on poverty using the income of beneficiaries as proxy showed that those who participated in CADP had their income increased by N446,073.89 ($ 1,239.09) and were better off in terms of their welfare compared to those who did not participate in the program. For the impact on commercialization, the programme led to a statistically significant increase in the commercialization index of beneficiaries. Also the PEGR for non-beneficiaries was higher than the actual growth rate while that of beneficiaries was less than the actual growth rate implying that CADP was not pro-poor. The study concludes that even though the CADP impacted the poverty level of beneficiaries positively, it was not pro-poor hence there is a need to ensure that the poor are effectively targeted in designing development intervention programmes.