Impact of Off-farm Income on Food Security and Nutrition in Nigeria

Reducing food insecurity in the developing world continues to be a major public policy challenge, and one that is complicated by the lack of a generalized comprehensive strategy for dealing with it. Around 854 million people are undernourished worldwide, many more suffer from micronutrient deficiencies, and the absolute numbers tend to increase further, especially in Sub-Saharan Africa. Recent food price hikes have contributed to greater public awareness of hunger related problems, also resulting in new international commitments to invest in developing country agriculture. Whereas agriculture-led growth played an important role in reducing food insecurity and transforming the economies of many Asian and Latin American countries, the same has not yet occurred in Africa. Most countries in Africa have not yet met the criteria for a successful agricultural revolution, and factor productivity lags far behind the rest of the world. This has led to growing skepticism in the international development discourse about the relevance of agriculture to food security in the region. As a result, the promotion of off-farm activities as a pathway out of food insecurity has gained widespread support among development agencies and non-governmental organizations. So far, relatively little policy efforts have been made to promote the off-farm sector in a pro-poor way and overcome potential constraints in countries of Sub-Saharan Africa. One reason is probably the dearth of solid and up-to-date information about the impact of off-farm income on food security and nutrition in specific context. While the poverty implications of off-farm income have been analyzed in different developing countries, much less is known about the impact of off-farm income on household food security and nutrition. 2 This paper analyzes the role of off-farm income in enhancing food security and nutrition for households in rural Nigeria. The analysis builds on a survey of 220 households in Kwara State, which was conducted in 2006. Food consumption data were elicited through a 7-day recall, covering 105 food items. The food consumption data are supplemented by anthropometric measurements that we took from pre-school children up to 60 months of age. In the 220 sample households, we obtained weight and height data from 127 children. Different Econometric analyses are employed to examine the mechanisms by which off-farm income affects household calorie and micronutrient supply, dietary quality, and child anthropometry. We hypothesize that off-farm income contributes to better nutrition in terms of calorie and micronutrient supply and child anthropometry. Issues of endogeneity are taken into account by using instrumental variable approaches. Both descriptive analyses and econometric approaches showed that off-farm income contributes to improved calorie supply at the household level. We find that off-farm income has a positive net effect on food security and nutrition, which is in the same magnitude as the effect of farm income. We also show that the prevalence of stunting and underweight is remarkably lower among children in households with off-farm income. Accordingly, improving poor households’ access to the off-farm sector can contribute to reducing problems of rural malnutrition. Our results demonstrate that both farm and off-farm activities can equally contribute to better food security and nutrition. Yet, while investing into agricultural growth is currently featuring high on the development policy agenda, promoting the rural off-farm sector receives much less attention. This should be rectified, especially in regions where agricultural resources are becoming increasingly scarce. Using a structural model, we also show that off-farm income contributes to higher food production and farm income by easing capital constraints, thus improving household welfare in multiple ways. Off-farm income diversification is already an extensive phenomenon 3 among rural households in developing countries. But without a clear policy strategy on how to support this process in a pro-poor way, outcomes might socially undesirable, because of unequal household access to certain off-farm activities.

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 Record created 2017-04-01, last modified 2017-04-26

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