ABSTRACT

 The broad objective of this study is to determine indicators of income and consumption expenditure decisions and examine their relationship in smalllholder farm households in Ikwuano Local Government Area of Abia State, Nigeria. Crosssectional and longitudinal data were collected from a Panel of 96 farm households over a period of 40 weeks. A multi-stage random sampling technique was used in selecting the respondents. Member households in the panel were visited every fortnight after some cross-sectional information had been collected on their socioeconomics, with a structured questioimaire. The fortnightly visitation collected information on the same variables of farm income, off-farm income, and consumption expenditures of the household on a proforma. The data were analysed using tables, Pie chart, OLS multiple regressions — single equations and a two-stage least square regression of simultaneous equation model. The results showed more income in cash and kind accrued to the households from off-farm employments of petty trading, services, and crafts than from food crops,food and cash crops, and crop and livestock production in the area. The total hours worked, average experience on farm work by household workforce, and hectarage of land cultivated by farm hoiseholds,were factors that significantly determined the supply of household labour to the farms. The net farm income was determined by the hectarage of farmland cultivated, the farm products produced and consumed (own production), number of household members actively involved in farming,and farm products sold in processed forms. The supply of household labour to off-farm engagements was also determined by the total hours worked, the off-farm work experience, and the size of household workforce. Three factors namely hours worked off-fann, the asset income, and the net farm income determined the amount of income earned from off-farm jobs by members of the farm households. The household consumption expenditure was determined by, the offfarm income, wealth, and net farm income, of the households. The implication of relatively high off-farm income as positive determinant of consumption expenditure is that members of farm households are inclined to spend much of their time doing offfarm jobs than farm works and by doing so marginalize farming. The asset income that positively influenced off-farm income but not consumption imply higher saving of this category of income and therefore higher source of investment fund from within tile household. Encouraging households to own physical assets could generate recycling fund and make them self-financing in their farm works. Policies aiming at improving farm investment must first generate wealth and then encourage savings. The high level of interdependency between the labour force and farm business on one hand, and the need to support farm income with some off-farm income on the other hand demand that there should be improvement on the present level of technology especially with the level of mechanization to keep pace with the labour requirements in the farms since some household members get involve in non-farm jobs.