Effects of Partial Oil Subsidy Removal on Livelihood Activities of Rural Populace in Yewa Division of Ogun State, Nigeria

Abstract

 The study focused on effects of partial oil subsidy removal on livelihood activities of Rural Populace in Yewa Division of Ogun State, Nigeria. Data were collected using multistage sampling techniques with the aid of structured questionnaires. The respondents for the study were drawn from Yewa North Local Government and Yewa South Local Government Areas. Five communities were selected from each of the local government and nine household selected from each of the community making a total of 90 respondents. The results were analyzed using descriptive, regression and budgetary analysis. Findings revealed showed that majority (76.7%) of the respondents were male while 23.3% were female. The dominance of the male farmers in farming activities may be due to the fact that it requires more strength, majority (68.9%) of the respondents range between the age of 40 and 49 years, married with formal education which enhanced their productivity and profitability level. It was also concluded that majority of the respondents were seriously affected with respect to their economic area of livelihood as majority of them disagreed that increase in oil price had brought increase on their level of sales, production, processing activities, capital for business, transportation of goods, payment of debts and access to loans, only few agreed that it has not affected the educational area of their livelihood in this area.  The findings also showed that the Average Gross Margin, the Net Income and Rate of Returns on Variable cost of farmer in the study area were estimated to be N58,150.66, N9,043.54 and 10.70% respectively. It also showed a Profitability Index of 0.20, which suggests that on every Naira earned about 20 kobo was returned to the farmer as net income. The larger the farm product marketed, the higher the profitability index. The regression Analysis also showed that increase in fuel price has affected agricultural production as it has increased the cost of transportation, cost of fueling machines, tractor etc. The study recommended that removal of fuel subsidy policy should not be implemented in stages to prevent a hike in the prices of food items, because no matter the proposed positive impact of fuel subsidy removal, its long term effect will be felt on agriculture which will in turns affect the price of food negatively.

Keywords: Fuel, Production, Subsidy, Agriculture, Food