An Evaluation of the Poverty Status and Profit Efficiency of Rice Farmers: Empirical Evidence from Fadama III Additional Financing in Benue State, Nigeria

Abstract

Reducing poverty through development programs is a major strategy employed by the Federal Government of Nigeria. To appraise the development project, this research's main objective was to evaluate the impact of Fadama III “irrigable land”Additional Financing (AF) on poverty status and profit efficiency among rice farming households in Benue State, Nigeria. Data were collected from a total sample of 625 respondents, including 358 participants in Fadama III AF and 267 non-participants. Descriptive statistics, the translog stochastic frontier profit function, and the Foster-Greer-Thorbecke poverty index were used to achieve the specific objectives of the study. The findings revealed that the incidence of poverty among the sampled rice farming households was high. A high proportion, 60% and 54%, were poor for participating and non-participating households, respectively. Similarly, participation in Fadama III AF significantly reduced consumption-based moderate and severe poverty by 32% and 44% among the participating rice farming households, respectively. Participation in Fadama III AF significantly reduced moderate and severe poverty by 38% and 35%, respectively. Furthermore, participants in Fadama III Additional financing (AF) were profit efficient, while their counterparts were profit inefficient, experiencing a profit shortfall of 15%. This inefficiency was partly due to non-optimal input prices for seeds, labor, and land, as well as the misuse of factors such as land. The study concluded that since Fadama III had positive and impactful outcomes on the poverty status of the participants, the government should sustain the progress achieved in the intervention through the injection of additional funding and scaling up inclusive participation of more women in the program.

Keywords

• Efficiency
• Financing
• Poverty index
• Profit function
• Rice
• Nigeria

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