Can Agricultural Households Farm Their Way Out of Poverty?

23 Pages Posted: 20 Apr 2016

See all articles by Gbemisola Oseni

Gbemisola Oseni

World Bank

Kevin McGee

American University

Andrew Dabalen

World Bank - Africa

Date Written: November 1, 2014

Abstract

This paper examines the determinants of agricultural productivity and its link to poverty using nationally representative data from the Nigeria General Household Survey Panel, 2010/11. The findings indicate an elasticity of poverty reduction with respect to agricultural productivity of between 0.25 to 0.3 percent, implying that a 10 percent increase in agricultural productivity will decrease the likelihood of being poor by between 2.5 and 3 percent. To increase agricultural productivity, land, labor, fertilizer, agricultural advice, and diversification within agriculture are the most important factors. As commonly found in the literature, the results indicate the inverse-land size productivity relationship. More specifically, a 10 percent increase in harvested land size will decrease productivity by 6.6 percent, all else being equal. In a simulation exercise where land quality is assumed to be constant across small and large holdings, the results show that if farms in the top land quintile had half the median yield per hectare of farms in the lowest quintile, production of the top quintile would be 10 times higher. The higher overall values of harvests from larger land sizes are more likely because of cultivation of larger expanses of land, rather than from efficient production. It should be noted that having larger land sizes in itself is not positively correlated with a lower likelihood of being poor. This is not to say that having larger land sizes is not important for farming, but rather it indicates that increasing efficiency is the more important need that could lead to poverty reduction for agricultural households.

Keywords: Inequality

Suggested Citation

Oseni, Gbemisola and McGee, Kevin and Dabalen, Andrew, Can Agricultural Households Farm Their Way Out of Poverty? (November 1, 2014). World Bank Policy Research Working Paper No. 7093. Available at SSRN: https://ssrn.com/abstract=2520292

Gbemisola Oseni (Contact Author)

World Bank ( email )

1818 H Street, NW
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United States

Kevin McGee

American University

4400 Massachusetts Ave, NW
Washington, DC 20016
United States

Andrew Dabalen

World Bank - Africa ( email )

1818 H Street
Washington, DC 20433
United States

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