DETERMINANTS OF RISK MANAGEMENT STRATEGIES AND HOUSEHOLD INCOME SOURCES AMONG RICE FARMERS IN KEBBI AND EBONYI STATES, NIGERIA

Abstract

Smallholder farmers in rural Nigeria are usually confronted with agricultural risks which necessitate livelihood diversification. This study was conducted to determine risk management strategies and household income sources, and effects of farmers’ attributes on the agricultural risks’ sources and risk coping strategies. The study examined rice production in Nigeria, with reference to Kebbi and Ebonyi States where rice production is predominant. It utilized a multistage sampling procedure with sample size of 63 rice farmers from Ebonyi State and 315 from Kebbi State. Multinomial logit was used to analyze major factors determining the choice of risk management strategies adopted by the rice farmers. Rice production in the two states is predominantly embraced by middle-aged farmers, with mean ages of 43 and 42, respectively. Overall average household size was 9 people per household. About 54.0% of rice farmers lack formal education, in Ebonyi State and 39.0% in Kebbi State. Male genderism has marginal effect on market monitoring and evaluation risk mitigating strategies, with a household increase of 0.2%, indicating a higher likelihood of adopting economic factor strategies. Increasing rice farm size leads to a decrease in farmers' adoption of information and development factor, social factor and market and monitoring evaluation mitigating strategies. All households, on average, generate 75.4% of their total income from agriculture, with 25.0% receiving income from off-farm sources. Farmers either grow only rice, having no other income sources, or may diversify into some other categories. With age, rice farmers are more likely to engage in non-farm income activities due to the capital- and labor-intensive nature of rice cultivation. Higher education levels increase the probability of rice farmers adopting management strategy by 2.5%. The study found that socioeconomic and institutional factors influence rice farmers' risk management strategies and income sources. Most farmers rely on farming, suggestive the need for adult literacy programs and risk-mitigating strategies.