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

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.