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Journal of Rural Res. & Information (Vol.6; No.1:2011) Adewuyi,et al

SOCIO-ECONOMIC ANALYSIS OF POVERTY LEVELS AMONG PEASANTFARMERS IN LAGOS STATE, NIGERIA.

BY S.A Adewuyi*, A.O Adenugba**, A..R Aluko** and O. R Odunsi** Department of Agricultural Economics & Farm Management,

University of Agriculture, Abeokuta, Nigeria.** Department of Rural & Agricultural Productivity,National Productivity Centre, Abuja, Nigeria.

ABSTRACT

The study examined the socio-economics of poverty levels among Peasant farmers in Lagos state, Nigeria. Both primary and secondary data were usedfor the study. Primary data were collected from farmers with the aid of structured questionnaire via person-to-person interview using stratifiedrandom sampling technique. The data obtained were analysed usingdescriptive statistics, Foster-Greer-Thorbecke (FGT) weighted poverty index

and the Logit model. The Mean Per Capita Income was used to determine thePoverty Line of the respondents. The study revealed that 63% of therespondents were poor while 27% were none poor. In addition, the incidenceand depth of poverty was higher among the female than male farmers werebut the severity of poverty was 0.18 for females and 0.109 for males. Thelevel of poverty was found to be higher among illiterate farmers at 0.833than the educated farmers at an average of 0.536. The logit regressionanalysis revealed that age, occupation type, extension and asset acquisitionhad significant effect on the Poverty Level of the respondents( p


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the difficulty of eliminating poverty by undermining efforts to increase labourincome and increasing the cost of expanding social services. Often, theproblems of poverty, population and the environment are intertwined, earlierpattern of development and the pressure of rapidly expanding populationmeans that many of the poor live in areas of acute environmental

degradation.Most of the poor in Nigeria are engaged in the agricultural sector and theydwell in areas served by bad roads or even unusable roads hence invariablylack access to productive inputs as well as output markets; Okunmadewa(1998). The scourge of poverty in Nigeria has become a major concern notonly to the Nigerian government, policy makers and international agenciessuch as the United Nations Development Programme and the World Bank.

This is due to the growing number of people living in impoverishedconditions all over the nation. UNDP (1998) assessed that the proportion of Nigerias population in abject poverty accordingly increased from 40 per cent

to 45 per cent between 1993 and 1997. As at the end of 1997, nearly 49 percent were poor. This alarming revelation had made Nigeria to be rankedamong the first 25 poor countries of the world. The Human Poverty Index(HPI) was 41.6 percent, implying that from every two Nigerian, one was poor.Successive regimes had tried to tackle the problem of poverty in the pastwith few positive impacts.

The understanding of the various poverty levels among farmers as well asthe characteristics of the farmers will be a step towards the right direction intackling the problems of poverty in Nigeria. Also, alleviating poverty amongfarmers will translate to alleviating poverty among Nigerians because 75 percent of the total population is either directly or indirectly involved inAgriculture. There is the need to understand how farmers in the area arecoping with the scourge of poverty in the study area. The study will thereforereveal the strategies adopted by the target peasant farmers to alleviatepoverty and provide up- to- date information on their socio-economic status.

Poverty Profile in Lagos State

FOS (1997) derived the poverty line for Nigeria using the mean per capitalhousehold expenditure. Thus the incidence of poverty by states showed thatin Lagos state, 39.5 per cent were extremely poor, 16.3 per cent weremoderately poor and 44.2 per cent were non-poor compared with 16.6, 32and 51.4 per cent respectively at the national level.

The percentage distribution of the poor and non-poor by states showedLagos state as having 44.7 per cent of its population as poor, while 55.30 percent were non-poor compared with 56.61 and 43.39 per cent at the nationallevel. Average income and expenditure in Lagos stood at N1195.50 andN1157.41 respectively in 1992/93 compared with N1275.77 and N1099.98 atthe national level respectively. Total expenditure by state and sector showedN1276.96, N684.52 and N933.47 for urban, semi-urban and rural Lagosrespectively. A breakdown of the expenditure pattern of Lagos state in 1997indicated that the incidence of poverty was more in the metropolitan

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sections than the less developed parts of the state. A further comparison of expenditure pattern in Lagos showed that personal expenditure, ownproduct, food cash, all food and non-food all increased by N420 or 36.3 percent, N271.87 or 284.9 per cent, N321.20 or 46.6 per cent, N203.03 or 24.1per cent and N221.14 or 70.5 per cent respectively between 1992/93 and

1996/97.An examination of the poverty indices calculated by the World Bank and theFOS showed that the incidence of poverty in rural Lagos was 36.1 per cent in1985/86 compared with 49.9 per cent in rural Nigeria. The depth of povertywas 11.6 per cent as against 18.9 per cent in rural Nigeria. In 1986, Lagosstate also ranked higher than the national average in severity of poverty asLagos recorded 4.2 per cent while the national average was 6.65 per cent.

These indices showed that Lagos faired better in terms of national povertyincidence, depth and severity in 1985/86. In terms of severity of poverty,Lagos state fell below the national average in 1992/93.

In 1996/97, poverty incidence, depth and severity in Lagos were 37.2, 16.8and 11.5 per cent respectively compared with 55.7, 22.5 and 10.0 per centat the national level. Also, Lagos state contribution to the various indicesindicated that despite the large population, much less were poor comparedto the national numbers of the poor. However, the World Bank had recentlyestimated that the depth and severity of extreme poverty increased morethan sevenfold in urban Nigeria compared with a two-fold increase in ruralareas.

Objectives of the Study The general objective of this study is to assess the effect of poverty amongpeasant farmers in Lagos State, Nigeria. Specifically, the study will:1. describe the socio-economic characteristics of farmers in Lagos state2. determine the poverty profiles of the respondents;3. assess the impact of the socio-economic characteristics on the poverty

levels of the farmers;4. examine various programmes adopted by government and other

international organizations to alleviate poverty and improve agriculturaldevelopment in the country.

5. offer policy recommendations arising from the findings with the aim of enhancing the impact of policies and projects intended to eradicatingpoverty among peasant farmers.

METHODOLOGY The study was conducted in Lagos state, Nigeria. In the country, the state

has the highest population growth rate and density of 1362 persons persquare kilometer in 1990 and 1700 in 1991 (FOS, 1997). Stratified Randomsampling was used to obtain data from respondents used for the study. Thestate was divided into 3 zones and questionnaire was used to obtain primary

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Z-Y 1Z

q


data from a total of 100 urban farmers. The small sample size stemmed frothe fact that Lagos state has the lowest population of peasant farmers.Four analytical tools were used for this research and they are the descriptivestatistics, Foster, Greer and Thorbecke (FGT) index, the Logit model .Thedescriptive Statistics was used to describe the socio economic characteristics

and the poverty profile of the farmers. The poverty level of the farmers wasmeasured using the Foster, Greer and Thorbecke Index (GP). This method of poverty measurement include headcount ratio and poverty gap of incomeshortfall.

The Foster, Greer and Thorbecke ( FGT) model .

P =1 ..Equation 1N i =1

Where,P = Foster, Greer and Thorbecke ( FGT) Index (0 P 1)

N1 = Total member of farmersq = Number of farmers below the poverty lineZ = Poverty line

Y1 = Income of the farmer Per year . The FGT parameter takes a value of 0, 1 and 2 with different implicationsP0 = when = 0, It measures poverty incidence (the index of people that areimpoverished)P 1 = when =1: It measures poverty depth or gap i.e. the proportion of the

poverty line that the average poor will require to attain to the poverty line.P 2 = when = 2, It measures the severity of poverty, giving more weightto the poorest.

The closer the FGT index is to 1, the greater the poverty level. The FGT indexalso includes the poverty gap measurement. The headcount ratio measuresthe percentage of the population below the poverty line while the povertygap measures the depth of poverty.

ii. The headcount ratio is given atH = q/N..Equation 2Where

H = Headcount ratio with value from 0 to 1. The higher or closer the value is to1, the higher the proportion of people below the poverty line.

q= number of households below the poverty lineN= Total number of household in the population.

iii. The poverty gap is measured asZ Y . .Equation 3

ZWhere,

Z = poverty line

Ya = average income of the poor population

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The value obtained will give an indication of the amount of money that wouldmake the poor people to cross the threshold of poverty. The poverty linewhich is the cut-off (minimum) standard of expenditure on food or per capitalincome is calculated using the mean of the total monthly income of therespondents.

Logit Model The Logit Model was used to determine the factors that influence theprobability of being poor among the respondents. The Logit model is basedon the cumulative logistic probability function and its specified as follows:

Y = 1___________ Equation 4

1+e - + x1Where,

Y= probability of poverty (1=poor, 0= non-poor)X1= vector of independent variablese= natural logarithm

= parametersExplicitly, the model is stated as Y= + 1X1+ 2X2+ 3X3+ 4X4+ 5X5+ 6X6+ 7X7+ Equation 5Where

Y= Poverty Status (1=poor, 0=non-poor)X1=Age of respondents (years)X2=Household sizeX3=Farm size (hectares)X4=Credit (1 = access to credit, 0 = no access)

X5=Education (years)X6= Dummy for other occupation (1 if engaged; 0 otherwise)X7= Contact with extension agentsX8=Dummy for Access to at least 1 modern farm implement

(1=access, 0 = no access)X9=possession of at least 1 household asset

=Error Term

RESULT AND DISCUSSION .Background information on the socio-economic characteristics such as ageof the farmers, sex, marital status, household size, monthly income, accessto credit, educational status, housing facilities, access to extension wereobtained during the study. The results are presented in tables 1,2 and 3below.

Table 1 Distribution of Respondents according to their age, sex,marital status

and household size and education

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Source: Field survey 2006

The table shows that 71 per cent of the respondents were within the activeworking age of 31-50, while 23 per cent fall within the age range of 51 andabove. Also, 69 per cent of the respondents were males, while 31 per centwere females with 82 per cent being married and 11 per cent single. Theresearch findings equally revealed that 29 per cent of the respondents had ahousehold size of between 2 and 4, 45 per cent of them had a household sizeof 5-7, 21 per cent had a household size of 8-10 .Only 5 per cent had ahousehold size of 11-13.

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Age Frequency

Percentage

21-30 6 631-40 31 31

41-50 40 4061-60 19 1961-70 4 4SexMale 69 61Female 31 31MaritalStatusMarried 82 82

Single 11 11Divorced 1 1Widow 6 6Householdsize2-4 29 29

5-7 45 458-10 21 2111-13 5 5EducationNo FormalEducation

18 18

AdultEducation

13 13

PrimaryEducation

26 26

SecondaryEducation

29 29

Tertiary

Education

14 14


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The findings as tabulated above reveals that 18 per cent of the respondentshad no formal education, 13 per cent of them had adult education, 26 percent of them had primary education and 29 per cent had secondaryeducation. Only 14 per cent of the respondents had tertiary education. Thisindicates a low literacy level.

Table 2 Distribution of Respondents according to their age, sex,marital status

and household size and education

Source: Field survey 2006

As tabulated above, the resultshowed that 54 per cent of therespondents stayed in rentedapartments, while19 per cent stayed

in their own houses while only 31 per cent of them owned the land they usedfor cultivation. A high level of land tenure is revealed as majority, 69 per centof the farmers were non land owners. They obtained the land used forfarming through purchase, leasehold and other possible means.

The distribution of farmers according to their level of income showsthat the highest proportion of the respondents fall within the N1N10000income range, and they accounted for 39 per cent. The lowest proportion fell

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Variable Frequency

Percentage

Type of HousingFamilyHouse

14 14

InheritedHouse 13 13Owned 19 19Rented 54 54LandOwnershipLandOwners

31 31

Non-landowners

69 69

MonthlyIncome(N)1-10000 39 3910001-20000

37 37

20001-30000

14 14

30001-40000

4 4

40001-50000

3 3

>50000

3 3


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within the N 40001- N 50000 and > N 50000 income range accounting for 6per cent of the total population being studied. A closer look reveals that 24per cent of the respondents had income above N20, 000 per month. Givenhe prevailing economic situation, farmers in the study area could bedescribed as low income earners.

Table 3 Expenditure Pattern of the Average Household (per week)Expenditure Item Amount(N) Percentage (%)Food 1741.27 43.12Electricity 122.49 3.03Energy 196.85 4.87House Rent 234.42 5.81Water 63.83 1.58Clothing 275.3 6.82

Transportation 505.42 12.52Health/Medical 193.15 4.78Security 50.25 1.24Education 655.13 16.22

Total Expenditure 4038.11 100.00Source: Field survey 2006

From the findings tabulated above, food expenditure had the highest amountof 43.12 per cent after which was followed by education which had 16.22 percent. Security accounted for the lowest expenditure which was 1.24 per centfollowed closely by water which was 1.58 per cent.

The average amount paid for energy, electricity, transportation, health,clothing and house rent were N196.85, N122.49, N505.42, N193.15, N275.3and N234.42 respectively.

Poverty Status of the Respondents The poverty line which is the amount below which an individual is consideredpoor was derived using the mean of the total per capita income of thefarmers per month. The calculated mean income was N18615.The analysis of the poverty incidence was based on the poverty line drawn from the mean of

the respondents total per capita income. The result showed that 63 per centof the farmers were poor while the remaining 37 per cent were non-poor. The poverty depth which reveals the depth of an average poor person belowthe poverty line was 0.24.This implied that to bring an individual up to thepoverty line (i.e. line of equality) will require an income transfer of N4374 permonth.

The poverty severity index which is a measure of the distribution of the poorbelow the poverty line or the distance of each poor person to another wascalculated as 0.108.

Table 4 : Regression result showing the impact of variables affecting the poverty level.

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Variables Coefficients Standard error Z P>{Z}

Age -0.0657792 0.0351687* -1.870 0.061Household size 0.1829701 0.1356286 1.349 0.177Farm size -0.0157817 0.0807148 -0.196 0.845Credit -0.8938832 0.7569225 -1.181 0.238Education -0.0003867 0.051425 -0.008 0.994Other occupation 1.294855 0.5726348** 2.261 0.024Contact with extension agents -1.676129 0.6702888** -2.501 0.012Access to modern farm implements -0.123306 0.1882062 -0.655 0.512Possession of household assets 2.17462 0.7967711*** 2.729 0.006Constant 1.794765 0.589 0.556Source : Computed from Field Survey Data, 2006.Prob > chi square = 0.0017; Pseudo R2 = 0.2011*** Z values significant at 1%;** Z values significant at 5%; * Z valuessignificant at 10%;

The Logit regression analysis showed the relationship between the povertyindex of the respondents and age, household size, farm size, credit,educational status, occupation, contact with extension agents, access tomodern farm implement, and possession of household assets. The Pseudo R 2which was 0.2011 indicated that only 20% of poverty extent was explainedor accounted for by the independent variables considered in the model. Thisimplied that variables other than those considered accounted for the greaterpart of poverty incidence in the study area .The possession of householdassets was significant at 1%, while occupation and extension were bothsignificant at 5%.Age was significant at 10%. The coefficient of therelationship between the poverty status and age, farm size, credit,education, extension and access to modern farm implements were negative;while the coefficients of the relationship between poverty status andhousehold size, occupation and possession of household assets werepositive. There was a significant relationship between the possession of atleast one household asset and the Poverty level. This implies that thisvariable is a strong determinant of poverty among the respondents. Butthere also exists a positive relationship between the poverty level and thepossession of at least one household asset which indicates that the moreasset a farmers possess the more cost he incur in maintaining the asset.

Poverty level and extension also had negative and significantrelationship meanings that poverty level increased with reduction in accessto extension services. The significant relationship between poverty level andoccupation means that occupation of the respondent was a determinant of poverty in the study area. However, positive relationship between povertylevel and occupation is contrary to the expectation that an additionaloccupation would afford the respondents more income which will indirectlylead to reduction in the poverty level.

The negative significant relationship between poverty level and agecould be explained in relation to the experience and skill the respondentwould have gained over the years to increase his output and income tocombat the scourge of poverty. Similarly, the study shows that poverty level

will rise with increase in household size. This is in support of the general

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notion and findings from other studies that the more the household size, themore severe the poverty condition.

Poverty Alleviation Strategies in the Study AreaOne of the specific objectives of this study is to examine the poverty

eradication strategies adopted by government and other agencies in thestudy area. These strategies include:

Provision of loan facilities: The government in conjunction with the World Bank provided soft loans topeasant farmers for FADAMA farming through the assistance of AgriculturalDevelopment Programme (ADP). The loans are provided to the farmerswithout collateral but with conditions of repayment to the government byinstallments through laid down procedures.

Provision of land:

Prospective farmers were awarded plots of land to cultivate arable crops likecassava, maize and vegetables. This strategy prevents the unnecessary costthe farmers incur in getting lands for cultivation. Houses were also providedfor the farmers in these settlements at subsidized rates. This enables themto have unhindered access to the farms to carry out their farm operations.

Provision of rural electricity/linkage roads/water:Government also embarked on the provision of rural electrification to aid

production and efficiency on the farms. Link roads were constructed alongthe farm settlements through to the inner city and this facilitates easytransportation of farm produce to the markets.Water is also available for use all year round in the farm settlements for fishproduction and for irrigation of crops. Water is being supplied in such a waythat individual farmers have access to water on their farms.

Provision of farm machinery:The state government, through the ministry of agriculture makes tractors

along with other farm implements like ploughs and harrows available to thefarmers at highly subsidized rates. This enables peasant farmers to have

access to these machineries that they ordinarily can not afford to purchase. The International Institute of Tropical Agriculture (IITA) adopts a directapproach to poverty alleviation. They achieve this by assisting peasantfarmers in marketing their produce and they also extend extension servicesto prospective farmers to ensure efficient utilization of inputs in order togenerate more income.

CONCLUSION AND RECOMMENDATIONS The study was undertaken to assess the poverty profile among peasantfarmers in Lagos stateFrom the study, it can be concluded that there is prevalence of poverty inthe study area and that the effect of socio economic characteristics on

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poverty levels of farmer cannot be over emphasized Respondents with thelargest household size were and no education mostly affected by povertyincidence in the study area.. Poverty was also shown to be more pronouncedamong the female respondents than the males. This could be due to thereason that male respondents earned more income from occupation

diversification than the female respondents in the study area. The studyindicates the need to encourage more farming activities to be carried out inthe state. This is due to the fact that according to FOS statistical data of (1995), only 5 percent of citizens in the study area are involved in farming.

This sis a manifestation of insufficient food production in the state as thebulk of the farm produce consumed in the state are brought from other partsof the country. Credit should be made readily available in terms of loans tofarmers to improve their farming capacity and subsequently increase theirincome since most of the respondents mentioned finance as a problemhindering their improved living standards. Government should furtherimprove on the extension activities to educate farmers on means of

improving their output.

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Aigbokan, B.E. (1997): Poverty alleviation in Nigeria : some microeconomicissues . In

Egbon, P.C. (ed). Poverty alleviaton in Nigeria. Proceeding of Nigerian

Economic Society (NES) Annual Conference. Pat Mag Press Ltd.Ibadan.

Ajakaiye, O. (1997): Conceptualization of poverty in Nigeria . Proceedings of Paper

Presented at the Annual CBN Conference, Abuja.

Anyawu, J.D (1997) Poverty in Nigeria: Concepts, Measurements anddeterminants . P.J.

Obaseki cds. Poverty alleviation in Nigeria. Nigerian EconomicSociety (NES)

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Ayinde, I.A (1999): Analysis of Poverty levels Among Farmers in OgunState,

Un Published M.Agric. Dissertation, Department of AgriculturalEconomics,

University of Agriculture, Abeokuta.

Federal Office of Statistics (1997): Poverty Profile for Nigeria . 1980-1996

Foster, Greer and Thorbecke (1984): A class of Decomposable povertyMeasure .

Econometrica.

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Maxwell, S. (2006): The Meaning and Measurement of Poverty . DiscussionPaper No 262.IDS University of Sussex, Brighton.

Ogwunike, F.O (1996): Structural Adjustment and Poverty in Sub-Saharan African in African

Perspective on Structural Adjustment. Coordinated byCODESRIA, Dakar

Senegal

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Nigeria. Paper Presented at the Central Bank of Nigeria Workshopon

Development Directions in the 21 st century, Abuja, Nigeria

Okunmadewa, F (1995): Nigeria-Poverty Reducing Growth Strategies andOptions. PaperPresented at the Central Bank of Nigeria Workshop on

Development Directionsin the 21 st century, Abuja, Nigeria.

Obadan, M.I (1997) . Analytical Framework of Poverty Reduction: Issues of Economic Growth

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Ravallion, M. and Bidani, B. (1993): How Robust is Poverty Profile ? WorldBank Economic

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Widanapathirana, A.S. (1993): Poverty in irrigated settlements: Should itdeserve emphatic

attention in future irrigation work. Irrigation ManagementNetwork,

No 27, pp35. Overseas Development Institute (ODI), London,

UK.World Bank (1996) : Nigeria: Poverty in the Midst of Plenty-The Challengeof Growth

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dr adewuyis poverty -6

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