The British American Tobacco out growers scheme: Determinants of selection and its income effects on tobacco farmers in Oyo State, Nigeria

Abstract

The study analyzed the operation and performance of Tobacco Out grower Scheme in Oyo State, Nigeria. The data for the analysis came from a random sample survey of the area of study. The treatment effect model was adopted in analyzing the data. Evidence from the probit analysis indicates that membership of the cooperative, quality of household labour, honesty; work-habit and age of farmers have positive significant influence on the probability of being selected into the scheme. The estimated income equation shows that the dummy for out growers, the quality of labour, tobacco farm size, ratio of tobacco to food crop and crop diversification have positive significant relationship with income. The counter factual test carried out shows that being an out grower result in higher income. Government should examine the possibility of using such schemes for developmental purposes.

JARD Vol. 5 (2) 2006: pp. 173-190