Journal of Rural Res. & Information (Vol.6; No.

1:2011)

Adewuyi et al.

SOCIO-ECONOMIC ANALYSIS OF POVERTY LEVELS AMONG PEASANT FARMERS 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. *** Department of Rural & Agricultural Productivity, National Productivity Centre, Ibadan, Nigeria. ABSTRACT The study examined the socio-economics of poverty levels among Peasant farmers in Lagos state, Nigeria. Both primary and secondary data were used for the study. Primary data were collected from farmers with the aid of structured questionnaire via person-to-person interview using stratified random sampling technique. The data obtained were analysed using descriptive statistics, Foster-Greer-Thorbecke (FGT) weighted poverty index and the Logit model. The Mean Per Capita Income was used to determine the Poverty Line of the respondents. The study revealed that 63% of the respondents were poor while 27% were non- poor. In addition, the incidence and depth of poverty was higher among the female than male farmers, but the severity of poverty was 0.18 for females and 0.109 for males. The level of poverty was found to be higher among illiterate farmers at 0.833 than the educated farmers at an average of 0.536. The logit regression analysis revealed that age, occupation type, extension and the asset acquisition had significant effect on the Poverty Level p(<0.05).The study concluded that poverty status among peasant farmers could be alleviated through improvement in contact with extension agents for training and provision of credit facilities for purchase of necessary farm inputs. Key words: Socio-economics, Poverty level, Peasant farmers, Lagos, Nigeria

INTRODUCTION Poverty has many manifestations and dimensions, including joblessness, over indebtedness, economic dependence, lack of freedom, inability to provide the basic needs of life for self and family, lack of access to land and credit and the inability to save or own assets. Ayinde (1999), Widanapathrana (1993), Ravallion and Bidani (1994), noted that poverty is a situation whereby one cannot generate sufficient income required for life sustenance. Obadan (1997) simply put poverty as a situation of low income or low consumption and inability to meet basic material needs encompassing food, water, clothing, shelter, education, health as well as non basic needs. The World Bank (1996) estimated that about 1.5 billion out of the 6.7. billion people in the world earn less than $370 a year i.e. less than $1 a day which is the internationally required standard. In Africa, over 300 million people live in poor economic conditions, majority of whom live in sub-Saharan Africa. The regions population is projected to continue growing at more than 3 percent a year for the next decade. Such rapid growth exacerbates the difficulty of eliminating poverty by undermining efforts to increase labour income and increasing the cost of expanding social services. Often, the problems of poverty, population and the environment are intertwined, earlier pattern of development and the pressure of rapidly expanding population means that many of the poor live in areas of acute environmental degradation.

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Most of the poor in Nigeria are engaged in the agricultural sector and they dwell in areas served by bad roads or even unusable roads, hence invariably lack access to productive inputs as well as output markets; ( Okunmadewa,1998). The scourge of poverty in Nigeria has become a major concern not only to the Nigerian government, policy makers and international agencies such as the United Nations Development Programme and the World Bank. This is due to the growing number of people living in impoverished conditions 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 per cent were poor. This alarming revelation had made Nigeria to be ranked among the first 25 poor countries of the world. The Human Poverty Index (HPI) was 41.6 percent, implying that for every two Nigerian, one was poor. Successive regimes had tried to tackle the problem of poverty in the past with few positive impacts. The understanding of the various poverty levels among farmers as well as the characteristics of the farmers will be a step towards the right direction in tackling the problems of poverty in Nigeria. Also, alleviating poverty among farmers will translate to alleviating poverty among Nigerians because 75 per cent of the total population is either directly or indirectly involved in Agriculture. There is the need to understand how farmers in the study area cope with the scourge of poverty. The study will therefore reveal the strategies adopted by peasant farmers to alleviate poverty and provide up- to- date information on their socio-economic status of farmer. Poverty Profile in Lagos State FOS (1997) derived the poverty line for Nigeria using the mean per capital household expenditure. Thus the incidence of poverty by states showed that in Lagos state, 39.5 per cent were extremely poor, 16.3 per cent were moderately poor and 44.2 per cent were non-poor compared with 16.6, 32 and 51.4 per cent respectively at the national level. The percentage distribution of the poor and non-poor by states showed Lagos state as having 44.7 per cent of its population as poor, while 55.30 per cent were non-poor compared with 56.61 and 43.39 per cent at the national level. Average income and expenditure in Lagos stood at N1195.50 and N1157.41 respectively in 1992/93 compared with N1275.77 and N1099.98 at the national level respectively. A breakdown of the expenditure pattern of Lagos state in 1997 indicated that the incidence of poverty was more in the metropolitan sections than the less developed parts of the state. A further comparison of expenditure pattern in Lagos showed that personal expenditure, own product, food cash, all food and non-food all increased by N420 or 36.3 per cent, N271.87 or 284.9 per cent, N321.20 or 46.6 per cent, N203.03 or 24.1 per 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 the FOS showed that the incidence of poverty in rural Lagos was 36.1 per cent in 1985/86 compared with 49.9 per cent in rural Nigeria. The depth of poverty was 11.6 per cent as against 18.9 per cent in rural Nigeria. In 1986, Lagos state also ranked higher than the national average in severity of poverty as Lagos 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 poverty incidence, 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, 16.8 and 11.5 per cent respectively compared with 55.7, 22.5 and 10.0 per cent at the national level. Also, Lagos state contribution to the various indices indicated that despite the large population, much were less

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poor compared to the national numbers of the poor. However, the World Bank had recently estimated that the depth and severity of extreme poverty increased more than sevenfold in urban Nigeria compared with a two-fold increase in rural areas. Objectives of the Study The general objective of this study is to assess the effect of poverty among peasant farmers in Lagos State, Nigeria. Specifically, the study will: 1. describe the socio-economic characteristics of farmers in Lagos state 2. 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 agricultural development in the country and 5. offer policy recommendations arising from the findings with the aim of enhancing the impact of policies and projects intended to eradicating poverty 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 per square kilometer in 1990 and 1700 in 1991 (FOS, 1997). Stratified random sampling procedure was used to obtain data from respondents used for the study. The state was divided into 3 zones and questionnaire was used to obtain primary data from a total of 100 urban farmers. The small sample size stemmed fro the fact that Lagos state has the lowest population of peasant farmers. Three analytical tools were used for this research .They are the descriptive statistics, Foster, Greer and Thorbecke (FGT) index, the Logits model .The descriptive Statistics was used to describe the socio economic characteristics and the poverty profile of the farmers. The poverty level of the farmers was measured using the Foster, Greer and Thorbecke Index (GP). This method of poverty measurement include headcount ratio and poverty gap of income shortfall. The Foster, Greer and Thorbecke ( FGT) model. P =

q
Z-Y1 1 Z N i =1

..Equation 1

Where, P = Foster, Greer and Thorbecke ( FGT) Index (0 P 1) N1 = Total member of farmers q = Number of farmers below the poverty line Z= Poverty line Y1 = Income of the farmer Per year . The FGT parameter takes a value of 0, 1 and 2 with different implications P0 = when = 0, It measures poverty incidence (the index of people that are impoverished) P1 = 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. P2 = when = 2, It measures the severity of poverty, giving more weight to the poorest. The closer the FGT index is to 1, the greater the poverty level. The FGT index also includes the poverty gap measurement. The headcount ratio measures the percentage of the population below the poverty line while the poverty gap measures the depth of poverty.

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Journal of Rural Res. & Information (Vol.6; No.1:2011) ii.

Adewuyi et al.

The headcount ratio is given as H = q/N..Equation 2 Where H = Headcount ratio with value from 0 to 1. The higher or closer the value is to 1, the higher the proportion of people below the poverty line. q= number of households below the poverty line N= Total number of household in the population. iii. The poverty gap is measured as ZY . .Equation 3 Z Where, Z = poverty line Ya = average income of the poor population The value obtained will give an indication of the amount of money that would make the poor people to cross the threshold of poverty. The poverty line which is the cut-off (minimum) standard of expenditure on food or per capital income is calculated using the mean of the total monthly income of the respondents. Logit Model The Logit Model was used to determine the factors that influence the probability of being poor among the respondents. The Logit model is based on the cumulative logistic probability function and its specified as follows: Y = 1 ___________ Equation 4 - +x1 1+e Where, Y= probability of poverty (1=poor, 0= non-poor) X1= vector of independent variables e= natural logarithm = parameters Explicitly, the model is stated as Y= + 1X1+ 2X2+3X3+4X4+5X5+6X6+7X7+ Equation 5 Where Y= Poverty Status (1=poor, 0=non-poor) X1=Age of respondents (years) X2=Household size X3=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 agents X8=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 age of the farmers, sex, marital status, household size, monthly income, access to credit, educational status, housing

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facilities, access to extension were obtained during the study. The results are presented in tables 1,2 and 3 below. Table 1 Distribution of Respondents according to their age, sex, marital status and household size and education Age 21-30 31-40 41-50 61-60 61-70 Sex Male Female Marital Status Married Single Divorced Widow Household size 2-4 5-7 8-10 11-13 Education Non- Formal Adult Primary Secondary Tertiary Frequency Percentage 6 31 40 19 4 69 31 6 31 40 19 4 61 31

82 11 1 6

82 11 1 6

29 45 21 5 18 13 26 29 14

29 45 21 5 18 13 26 29 14

Source: Field survey 2006 The table shows that 71 per cent of the respondents were within the active working age of 31-50, while 23 per cent fell within the age range of 51 and above. Also, 69 per cent of the respondents were males, while 31 per cent were females with 82 per cent being married and 11 per cent singles. The research findings equally revealed that 29 per cent of the respondents had a household size of between 2 and 4, 45 per cent of them had a household size of 5-7. 21 per cent had a household size of 8-10 .Only 5 per cent had a household size of 11-13.

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The findings as tabulated above reveals that 18 per cent of the respondents had no formal education, 13 per cent had adult education, 26 per cent had primary education and 29 per cent had secondary education. Only 14 per cent of the respondents had tertiary education. This indicates a low literacy level. Table 2 Distribution of Respondents according to their type of housing, land ownership and monthly income Variable Type of Housing Family house Inherited House Owned Rented Land Ownership Land Owners Non-land owners Monthly Income(N) 1-10000 10001-20000 20001-30000 30001-40000 40001-50000 >50000 Frequency Percentage

14 13 19 54

14 13 19 54

31 69 39 37 14 4 3 3

31 69 39 37 14 4 3 3

Source: Field survey 2006 As tabulated above, the result showed that 54 per cent of the respondents stayed in rented apartments while19 per cent stayed in their own houses while only 31 per cent of them owned the land they used for cultivation. A high level of land tenure is revealed as majority, 69 per cent of the farmers were non land owners. They obtained the land used for farming through purchase, leasehold and other possible means. The distribution of farmers according to their level of income shows that the highest proportion of the respondents fell within the N1N10000 income range, and they accounted for 39 per cent. The lowest proportion fell within the N 40001- N 50000 and > N 50000 income ranges accounted for 6 per cent of the total population being studied. A closer look reveals that 24 per cent of the respondents had income above N20, 000 per month. Given the prevailing economic situation, farmers in the study area could be described as low income earners. Table 3 Expenditure Pattern of the Average Household (per week)

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Journal of Rural Res. & Information (Vol.6; No.1:2011) Expenditure Item Food Electricity Energy House Rent Water Clothing Transportation Health/Medical Security Education Total Expenditure Source: Field survey 2006 Amount(N) 1741.27 122.49 196.85 234.42 63.83 275.3 505.42 193.15 50.25 655.13 4038.11

Adewuyi et al. Percentage (%) 43.12 3.03 4.87 5.81 1.58 6.82 12.52 4.78 1.24 16.22 100.00

From the findings tabulated above, food expenditure had the highest amount of 43.12 per cent after which followed education which had 16.22 per cent. Security accounted for the lowest expenditure which was 1.24 per cent and water had 1.58 per cent. The average amounts paid for energy, electricity, transportation, health, clothing and house rent were N196.85, N122.49, N505.42, N193.15, N275.3 and N234.42 respectively. Poverty Status of the Respondents The poverty line which is the amount below which an individual is considered poor was derived using the mean of the total per capita income of the farmers 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 cent of 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 below the poverty line was 0.24.This implied that to bring an individual up to the poverty line (i.e. line of equality) will require an income transfer of N4374 per month. The poverty severity index which is a measure of the distribution of the poor below the poverty line or the distance of each poor person to another was calculated as 0.108.
Table 4 : Regression result showing the impact of variables affecting the poverty level. Variables Coefficients Standard error Z P>{Z} Age -0.0657792 Household size 0.1829701 Farm size -0.0157817 Credit -0.8938832 Education -0.0003867 Other occupation 1.294855 Contact with extension agents -1.676129 Access to modern farm implements -0.123306 Possession of household assets 2.17462 Constant Source : 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 values significant at 10%; 0.0351687* 0.1356286 0.0807148 0.7569225 0.051425 0.5726348** 0.6702888** 0.1882062 0.7967711*** 1.794765 -1.870 1.349 -0.196 -1.181 -0.008 2.261 -2.501 -0.655 2.729 0.589 0.061 0.177 0.845 0.238 0.994 0.024 0.012 0.512 0.006 0.556

The Logit regression analysis showed the relationship between the poverty index of the respondents and age, household size, farm size, credit, educational status, occupation, contact

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

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with extension agents, access to modern farm implement, and possession of household assets. The Pseudo R2 which was 0.2011 indicated that only 20% of poverty extent was explained or accounted for by the independent variables considered in the model. This implied that variables other than those considered accounted for the greater part of poverty incidence in the study area .The possession of household assets was significant at 1%, while occupation and extension were both significant at 5%.Age was significant at 10%. The coefficient of the relationship 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 and household size, occupation and possession of household assets were positive. There was a significant relationship between the possession of at least one household asset and the Poverty level. This implies that this variable is a strong determinant of poverty among the respondents. But there also exists a positive relationship between the poverty level and the possession of at least one household asset which indicates that the more asset a farmer possesses the more cost he incur in maintaining the asset. Poverty level and extension also had negative and significant relationship meanings that poverty level increased with reduction in access to extension services. The significant relationship between poverty level and occupation means that occupation of the respondent was a determinant of poverty in the study area. However, positive relationship between poverty level and occupation is contrary to the expectation that an additional occupation would afford the respondents more income which will indirectly lead to reduction in the poverty level. The negative significant relationship between poverty level and age could be explained in relation to the experience and skill the respondent would have gained over the years to increase his output and income to combat 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 notion and findings from other studies that the more the household size, the more severe the poverty condition. Poverty Alleviation Strategies in the Study Area One of the specific objectives of this study is to examine the poverty eradication strategies adopted by government and other agencies in the study area. These strategies include: Provision of loan facilities: The government in conjunction with the World Bank provided soft loans to peasant farmers for FADAMA farming through the assistance of Agricultural Development Programme (ADP). The loans are provided to the farmers without collateral but with conditions of repayment to the government by installments through laid down procedures. Provision of land: Prospective farmers were awarded plots of land to cultivate arable crops like cassava, maize and vegetables. This strategy prevents the unnecessary cost the farmers incur in getting lands for cultivation. Houses were also provided for the farmers in these settlements at subsidized rates. This enables them to 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 along the farm settlements to the inner city and this facilitates easy transportation of farm produce to the markets. Water is also available for use all year round in the farm settlements for fish production and for irrigation of crops. Water is being supplied in such a way that individual farmers have access to water on their farms. Provision of farm machinery:

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The state government, through the Ministry of Agriculture makes tractors along with other farm implements like ploughs and harrows available to the farmers 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 direct approach to poverty alleviation. They achieve this by assisting peasant farmers in marketing their produce and they also extend extension services to prospective farmers to ensure efficient utilization of inputs in order to generate more income. CONCLUSION AND RECOMMENDATIONS The study was undertaken to assess the poverty profile among peasant farmers in Lagos state From the study, it can be concluded that there is prevalence of poverty in the study area and that the effect of socio economic characteristics on poverty levels of farmer cannot be over emphasized Respondents with the largest household size and no education were mostly affected by poverty incidence in the study area. This could be due to the reason that male respondents earned more income from occupation diversification than the female respondents in the study area. The study indicates the need to encourage more farming activities to be carried out in the state. This is due to the fact that according to FOS statistical data of (1997), only 5 percent of citizens in the study area are involved in farming. This is a manifestation of insufficient food production in the state as the bulk of the farm produce consumed in the state are brought from other parts of the country. Credit should be made readily available in terms of loans to farmers to improve their farming capacity and subsequently increase their income since most of the respondents mentioned finance as a problem hindering their improved living standards. Government should further improve on the extension activities to educate farmers on means of improving their output. REFERENCES Ayinde, I.A (1999): Analysis of Poverty levels Among Farmers in Ogun State, Un Published M.Agric. Dissertation, Department of Agricultural Economics, University of Agriculture, Abeokuta. Federal Office of Statistics (1997): Poverty Profile for Nigeria. 1980-1996 Foster, Greer and Thorbecke (1984): A class of Decomposable poverty Measure. Econometrica. Maxwell, S. (2006): The Meaning and Measurement of Poverty. Discussion Paper No 262.IDS University of Sussex, Brighton. Okunmadewa, F (1998): Domestic and International Response to poverty alleviation in Nigeria. Paper Presented at the Central Bank of Nigeria Workshop on Development Directions in the 21st century, Abuja, Nigeria Okunmadewa, F (1995): Nigeria-Poverty Reducing Growth Strategies and Options. Paper Presented at the Central Bank of Nigeria Workshop on Development Directions in the 21st century, Abuja, Nigeria. Obadan, M.I (1997) .Analytical Framework of Poverty Reduction: Issues of Economic Growth versus Other strategies in Poverty alleviation in Nigeria. Nigerian Economic Society (NES) Annual Conference Proceedings, Chapter 1 Ravallion, M. and Bidani, B. (1993): How Robust is Poverty Profile? World Bank Economic Review, Washington D.C Widanapathirana, A.S. (1993): Poverty in irrigated settlements: Should it deserve emphatic attention in future irrigation work. Irrigation Management Network, No 27, pp35. Overseas Development Institute (ODI), London, UK.

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World Bank (1996) : Nigeria: Poverty in the Midst of Plenty-The Challenge of Growth with Inclusion. World Bank Report 1996. UNDP 1998: Human Development Report 1998. New York: Oxford University Press.

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