EFFECTS OF REMITTANCES ON THE LIVELIHOOD OF FARM HOUSEHOLDS IN ENUGU STATE, NIGERIA

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ABSTRACT

This study examined the effects of remittances on the livelihood of farm households in Enugu State Nigeria.  Multistage random sampling technique was used to select 120 remittance recipient households used for the study. Data were collected by the use of structured questionnaire. Both descriptive and inferential statistical techniques were used in data analysis. The study showed that, households whose heads are within, 51 – 70 year of age and are not highly educated are more likely to produce migrants. Also families with large household size (six and above) migrate more. Households with married status were found to be 65.8%, while 56.7% of the household heads were males. Internal remittances formed the bulk of the receipts of 86.7% of the respondents, while 55% of the respondents received between N1, 000 and N10, 000 remittances 4-6 times a year. The most frequent channel for remittance delivery was hand carriage and both cash and non-cash remittances were received.  Remittances received were often used to meet pre – existing household needs/expenses. Regression result showed that age of household heads as well as their levels of education affected migration. Other factors that affected migration are farm size and household size. The livelihood of farm households was found to be affected by the number of organizations the household heads belonged to, the age and the level of education of household head, farm size and size of remittances that is invested.

CHAPTER ONE

INTRODUCTION

1.1 Background Information

            With an estimated population of 150 million people, Nigeria is the most populous country in Africa. About two-thirds of the population resides in the rural area where they derive livelihood from Agriculture and allied sectors (Oseni & Winter, 2009). Although, agriculture has remained a rural enterprise, it accounted for 41.21 per cent of the GDP and the largest non-oil export earner to the country (National Planning Commission [NPC], 2006).

            Agriculture as practiced in Nigeria is predominantly of small farm household (comprising the farmer and his family) which usually cultivates an area of land that ranges from 1.5 to 2.0 hectares in fragmented and scattered small holdings.  Although these households are individually insignificant, they collectively form an important foundation upon which the Nigerian agricultural economy rests. This category of farmers are desirable not only because they provide employment and food for the country’s teeming population (Nigerian Institute of Social  and Economic Research, 2003), but also because they provide a more equitable distribution of income as well as effective demand structure for other sectors of the economy (Dorner, 1995; Bravo-Ureta & Evenson, 1994).

            According to Ashley & Carney, (1999); Chambers & Conway (1992) agricultural production is not the only source of livelihood available for the rural people, farm households constantly adjust their on-farm and off-farm activities (e.g. local craftwork, trade, civil service, hunting for game, brick laying, local services such as traditional healing and repairs) in response to some changes in their environment. The characteristics of livelihood components are determined by the resources and values of specific physical, social and environmental assets. Thus, livelihood can be described as consisting of systematic activities or enterprises undertaken by individual households using their capabilities as well as assets to derive material or financial reward and improved status (Assan, 2006).  However, the effort by households to improve their well being through engaging in various livelihood options tend to be distressed by environmental factors,  unemployment and poverty which dominate the livelihood patterns of farm households (Barrett et al, 2001; Ellis 1998).

            Despite the reported decrease in poverty in the last decade (NBS, 2005), it is generally believed that poverty rate is still unexpectedly high in Nigeria with the rural areas more affected (Babatunde & Martinetti, 2010).  Moreover, World Development Indicator (2007) and Happe (2003) stated that poverty is disproportionately concentrated among households whose primary livelihood depends on agricultural activities.

            Livelihood of the farm households is bedeviled by missing market, lack of fundamental assets, production services and  inputs (such as land, water, credit, extension, market information and technical innovation), high unemployment rate, recurring crop failures, precarious labour conditions and low salaries (International Fund for Agricultural Development, (IFAD) 2007; World Bank, 2007). Nwaru (2004) noted that inappropriate policies and programme for Agriculture, pervasive corruption manifesting in misappropriation of resources and embezzlement, ethnic and religious conflicts has resulted to a high sense of insecurity and inefficiency in production.