Resource allocation and consumption pattern of farm households in Nigeria

Farm households in developing countries constitute a majority of the poor; improving their welfare status requires interventions targeted at their livelihood strategies. Their livelihood is associated with inadequacies stemming from structural and technical inefficiencies. To liberate them from the inadequacies requires an understanding of the dynamics of production as well as the resultant consumption behaviour under changing market conditions. This book investigated resource use efficiency and allocation in four major crop enterprises of farm households in North Central Nigeria. Furthermore, the consumption pattern of the households with respect to price changes was also investigated. The study utilized the Stochastic Frontier Production Function and the Linear Approximate Almost Ideal Demand System (LA/AIDS) for the efficiency and demand analyses respectively; Subsequently, a mathematical programming technique implemented in General Algebraic Modelling System (GAMS) was adopted for modelling the farm households’ responses to the stimuli of changing input and output price policy. The key response decision variables include the reallocation of resources within and between enterprises and the resultant output changes in response to the stimuli applied and subsequently changes in market surplus availability. The book highlights the inadequacy of “unilateral policy approach” with evidence of contrasting impact on the categories of farm holders investigated.