Determinants of agricultural and non-agricultural livelihood strategies in rural communities: evidence from eastern Nigeria

Using primary survey data from two agro-ecologically distinct rural communities in eastern Nigeria, this paper examines the determinants of livelihood diversification away from agriculture and the manner in which agro-ecological differences affect such diversification. The probability of participating in non-agricultural activities was estimated in an endogeneity-controlled, probit model employing data on household assets, demographics, human capital, as well as a proxy for differences in agro-ecology. Results show that not many households remain undiversified as they combine activities within farming, commerce, skilled non-farm and low skilled non-farm sectors. Both human capital and the agro-climactic variables were found to determine the nature of diversification. Against the deagrarianisation thesis, the study found that despite high incidence of diversification, agriculture is not in any significant decline. Policies thus should be aimed at both agricultural and non-agricultural activities. Policies based on the assumption that agriculture is no longer relevant will hurt farming and retard development.