The composition and determinants of rural non-farm income diversification in Nigeria


Farming has been considered as main source of income for rural households in Nigeria, despite their involvement in other income generating activities. Focusing on income derivable from farming alone may be partially responsible for the ineffective poverty reduction strategies in Nigeria. Using the National Living Standard Survey data collected by the National Bureau of Statistics, this paper investigated the composition and determinants of non-farm incomes of rural households in Nigeria. The results show that the share of farm, non-farm wage (NFW)- and self-employment (NFS) incomes in total household incomes were 24.3%, 43.0% and 23.7% respectively. Households whose heads are male (0.647), had formal education (0.522), increased the likelihood of households’ participation in NFW activities, while access to credit (-0.307) and having larger farm size (-0.221) decreased it. Access to credit (0.379); community participation (0.103); larger family size (0.193) and possession of capital assets (0.069) increased the likelihood of participation in NFS-employment activities, while having larger farm size (-0.211) decreased it. The study concludes that policy targeting poverty reduction should focus on providing enabling environment for poor households’ access to non-farm activities in the study area.


non-farm income; wage employment; self-employment; Tobit regression; rural Nigeria

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Published : 2020-11-08

Olugbire, O., Obafunsho, O., Olarewaju, T., Kolade, R., Odediran, F., & Orumwense, L. (2020). The composition and determinants of rural non-farm income diversification in Nigeria. Journal of Agribusiness and Rural Development, 57(3), 279–288.

Oluseyi Olutoyin Olugbire
Forestry Research Institute of Nigeria  Nigeria

Pricipal Research Fellow

Extension and Outreach Unit

Forest Economics and Extension Services Department

Forestry Research Institute of Nigeria, 

Jerricho, Ibadan, Oyo State, Nigeria

Oluwatosin Esther Obafunsho 
Titilope Omolara Olarewaju 
Ruth Ibukun Kolade 
Festus Abiodun Odediran 
Lucy Adeteju Orumwense 

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