1 .I Background Information

Nigeria, though endowed with abundant human, capital and natural resources and in spite of her oil revenue has remained one of the poorest countries in the world. Various national and international bodies have documented this high incidence of poverty. The Federal Offce of Statistics (FOS, 1999) and the United Nations Development Programmes (UNDP, 1998) asserted that despite a remarkable decrease in poverty in the 1980s’ the dramatic increase in the 1990s was discouraging. Over two decades ago, the country enjoyed relative prosperity but progressively saw 40% of the population slide into poverty (Adegbite and Akintola, 2002). The proportion of Nigeria’s population in abject poverty gradually increased from 40% to 70.2% between 1992 and 2002. As at the end of 1997, nearly 49% of the population were living in poverty. FOS (1999) reports that prior to the end of 1997, Nigeria’s poverty level was 65.6% and she was ranked among the twenty-five poorest countries of the world (table 1 .I) The Human Poverty Index (HPI) was 41.6% implying that one out of every two Nigerians was poor. Life expectancy has gradually declined to a little above 50 years (FOS, 1999); whereas UNDP (1998) put it at 52 years. The percentage of adult literates was 55% and only 49% had access to portable water and health services. The Gini coefficient of poverty increased from 0.38 to 0.43 within the same period and became worse at 0.52 by the end of the 1990s (UNDP, 1999). As at December, 1999, 54% of the world’s population were considered to be poor by the United Nations, on the basis of each country’s score on an index of human income and human suffering. The percentage is far higher in some countries such as Sri Lanka, Burma where 90% of the people are below poverty line, and Nigeria where about 67.1 million of the people are below poverty line. It was estimated that only 50% of Nigerians have access to safe water; 50% have never attended any school at all; demand for food increases by about 3% annually while the annual growth rate of food production was between 1-1.5% (Olaitan et al, 2000). Moreover, UNDP (2004) noted that the Human Development Index (HDI), a composite measure of income and access to education and health services, ranked Nigeria 152″ out of 175 countries in 2000. This low HDI reflects the situation with regard to poor access to basic social services in the country. Further the reports indicate that in 2001 over 70% of the population lived below the international income poverty line of $1 per day. Specifically in Benue State, FOS (2001) report showed that the household economic situation worsened by 27.6% compared to the previous year, access to safe water was 25.6%, adult literacy was 58%, 59.9% had access to primary school, 35.7% had access to secondary school and 32% had access to health services. Agriculture plays a vital role in the economic development of Nigerian economy. It employs about 70 percent of the labour force and contributes about 41% to the GRP (World Bank, 2004). In Nigeria, over 80 percent of the agricultural population are smallholder farmers with fragmented farm holdings. The smallholder farmers are poor and dwell in the rural areas and are characterized by low income, large family size, lack of formal education, low savings and investment, lack of access to credit facilities and use crude farm production technologies (Olayide et al 1980). A fundamental problem for all decision makers is the absence of complete information about the decision environment. If all possible actions, events and conditional outcomes could be predicted with complete certainty, then decision-making would be the simple mechanical exercise of calculating the optimal action according to some predetermined criteria. In practice, of course, the decision environment is characterized by uncertainty or the absence of perfect and complete information. Actions are undertaken in anticipation of future benefits that may not be realized. Thus all decisions contain some element of risk because of the unpredictability of outcomes, which imposes an opportunity cost on the decision-making (Hill, 1989). Furthermore, risk arises because uncertainty impacts directly on the decision process through the decision-maker’s attitude towards risk. The prudent or cautious manager may well choose different actions from the decision-maker who has confidence (or resources) to take greater risk (Hill, 1989).

Problem Statement

Agriculture has remained the mainstay of the economy for over three decades. However, since 1970, the dominance of the oil sector has led to a relative neglect of the agricultural sector in terms of policy responses resulting in declining productivity, growth and competitiveness and increased poverty. Small-scale farmers are known to produce the bulk of the food and fibres of the country. The farming population constitutes over 60percent of the countries population. Presently the Nigerian agriculture is characterized by low productivity, low level of technological adoption, use of inefficient production techniques, etc. The present poor state of Nigerian agriculture is related to farmers attitudes towards risks in the adoption of new production techniques, as well as risks in the production and socioeconomic environments. Since poverty is a major constraining factor in the farmer’s production and socioeconomic environment, there is need for a detailed study on the effect of poverty on farmer’s attitude towards risks.

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Updated: 24th April 2019 — 4:00 pm

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