Do Rural Smallholder Farmers Subsidize Farm Investments With Non-farm Income? A Study of Vegetable Farmers

Abstract

ABSTRACTGrowth in the rural non-farm economy can boost local agricultural production in developing countries. Income from rural non-farm activities to subsidize agricultural production can be a remedy for inadequate access to credit and can help reverse declines in agricultural production and productivity. The effect of rural non-farm income (RNFI) on smallholder vegetable crop investments in southwestern Nigeria was examined. Multistage sampling was used to select 407 small-scale vegetable farmers actively involved in rural non-farm activities (RNFA). Data on farm production, financing sources, and amount invested were elicited from farmers through a survey conducted between March and August. Data analyses involved use of descriptive and Tobit regression statistics. Average age of farmers was 43.8 years; 24.1% were nonnatives of the community, 53.8% had only primary education, and average household size was about six persons. Average farm size was 1.02 ha. The most common cropping system used was the intercrop of short duration annuals involving cassava/yam/maize/vegetables. RNFAs used family as the only source of labor. Average annual RNFI realized was N107,854.3 (N165.7 = US$1) of which N14,988.08 (13.9%) was invested in crop production. Female farmers invested as much as three times of RNFI realized than their male counterparts in crop production. About 77.2% of investment was for labor in farms due to the labor-intensive nature of production. Tobit regression analysis indicated that farm size, farming experience, farmer dependency ratio, rural road infrastructure, and native status were factors influencing the proportion of RNFI invested in crop production. In the aggregate, RNFI marginally subsidizes vegetable crop production because the bulk of RNFI realized by small-scale producers was used to provide food and other household (health, education, social functions) consumption needs.