IMPACT OF RISK ATTITUDES ON POVERTY LEVEL AMONG RURAL FARMERS IN OGUN STATE

Abstract

This study examined the impact of risk attitudes on poverty level among rural farmers in Ogun state. Data used were generated from a farm survey involving 120 farmers randomly selected using a multistage sampling technique. Analytical tools used include descriptive, risk behavioural model (safety-first principle), Foster-Greer-Thorbecke (FGT) model and Probit model. The findings revealed that majority of the responding farmers were male (65.8%). The average age of farmers was 49 and 23 years respectively. The average household size was 6, while educational status was very low, as 47.5% had no formal education, while 33.3% had primary education only. The alarming result was that, not a single farmer insured his farm, while a handful was only aware of the activities of the Nigerian Agricultural Insurance Company (NAIC). FGT analysis showed that 40 and 60% of the farmers were poor and not poor respectively. Majority of the farmers were found to be risk averse as 117 of the 120 farmers fell into this category. Risk attitude or risk aversion has no effect on poverty level of farmers, but a direct relationship between the two was observed. Major sources of farm losses were found to be price fluctuation, pest and disease outbreak, illnesses, erratic rainfall pattern, changes in government policies and theft.