Effect of income diversification on the livelihood of rural farming households in Kwara State, Nigeria

Abstract

Natural rubber on the world market has had small increases in demand and big increases in supply. Therefore, demand and supply are imbalanced and this impacts the natural rubber price of the world market causing a decline. This study aimed: (1) to develop de-mand and supply models to predict the world natural rubber quantity using simultaneous equations;(2) to predict all explanatory variables in the demand and supply models using the simple moving average technique; and (3) to estimate the equilibrium quantity and price for world natural rubber during 2017e2026. First, in the demand model, there was a positive relationship of the explanatory variables of world natural rubber production quantity, synthetic rubber price, percentage year of year (%YOY) of gross domestic product (GDP), and the exchange rate, while the negative relationship variable was natural rubber price. In the supply model, the positive relationship variables were natural rubber price, mature area, rainfall, and crude oil price, while the negative relationship variables were world natural rubber stock and urea price. Second, the predicted variables indicated that production, %YOY of GDP, exchange rate, amount of stock, and the mature area tended to gradually increase, while the synthetic rubber price, urea price, rainfall, and crude oil price tended to slowly decrease from 2017 to 2026. Finally, the equilibrium quantity forecast tended to gradually increase from 953.75 to 957.15 thousand tonnes, and the equilibrium price tended to fluctuate and decrease from 169.78 to 162.05 thousand yen from 2017 to 2026. Consequently, this study may be helpful to the governments of the world's important natural rubber producing countries to plan policies to reduce natural rubber production costs and stabilize the natural rubber price in the future, such as by setting suitable areas of world natural rubber plantation in each country, and defining appropriate and sustainable alternative crop areas in each country. AbstractChallenges such as those poised by climate change and farmers-herdsmen conflicts have increased income diversification among farmers in Nigeria. While rural income diversification has been applauded as insurance against the risks inherent in farming, its potentials to compete for the resources and attention of farmers may have negative consequences for agricultural production food security, and the livelihood of rural households. Specifically, the study described the socio-economic characteristics of rural households in the study area, examined the number of income sources of rural households, determined the contributions of different income sources to the overall household income, and assessed the livelihood status of rural households. A three-stage random sampling technique produced a sample size of 160. Data was obtained through an interview schedule. Descriptive statistics and Pearson's Product Moment Correlation were used for data analyses. Findings revealed that rural household heads were predominantly male (85%), with a mean age of 51.6 ...

Improving Household Welfare Through Income Diversity

“…It has also been shown that diversifying one's livelihood has a skewed effect, resulting in differences in income and welfare. The number of income sources accessible to rural families, as well as the impact of different income sources to total income and wellbeing, were also evaluated by Omotesho et al (2020) using primary data. The study demonstrated a negative correlation between the number of income sources and the household's livelihood status, for the lower the livelihood status, the more diverse the household's income.…”

“…The household will spend the extra income on both consumable and non-consumable goods, reducing the prevalence of poverty and enhancing the welfare of the household. Income diversity may or may not have a significant impact on household welfare, but it is generally acknowledged that it is becoming a more effective tool for raising welfare in many emerging nations (Omotesho et al, 2020). Asmah and Avenue (2011) define household welfare as the household's control over goods and services available on the market, while Arouri et al (2015) and Unnikrishnan and Imai (2020) define home welfare as the general welfare of members of the household as measured by food and non-food expenditures, and poverty status.…”

“…Diverse literature has revealed that income diversity has little to no impact on household welfare (Gautam & Andersen, 2016;Omotesho et al, 2020;Khan & Morrissey, 2019;Ebenezer & Abbyssinia, 2018;Mendoza, 2018). According to Asfaw et al (2019), the influence of diversity on household income differs across countries.…”