SOCIAL CAPITAL NETWORKS (SCNS) REDUCING THE POVERTY ON COCOA PRODUCING HOUSEHOLDS: EVIDENCE FROM OSUN AND ONDO STATES OF SOUTHWESTERN NIGERIA

Abstract

Background. Poverty is a state or condition in which a person or community lacks the capital required to meet their needs. Whereas, social capital has been described as a vital asset for poverty alleviation since it can provide access to that which is lacking; capital. This study suggests evidences that the poor farmers could benefit more from social capital. Objective. This study was conducted to assess the impact of social capital on poverty alleviation among cocoa producing households in Southwestern, Nigeria. Methodology. A multi-stage sampling procedure was employed to select 300 cocoa-producing households for the study. Data were analyzed using social capital indices, FGT index, the Probit model and two-stage least square model. Results. The results revealed that cash contribution (0.478), labour contribution (0.556), decision-making (0.882), meeting attendance (0.920), heterogeneity (0.659) and density of membership (0.661) are the major dimensions of social capital available to cocoa-producing households. The results of the Probit model revealed that age of household head, gender, household size, years of experience, farm income, and farm size were the main determining factors of participating in SCNs. The Foster, Greer and Thorbecke index revealed that 65% of the sample households are poor. Out of the poor households, 42% are moderately poor and 23% are core poor. The results further revealed that factors including age, square of age, household size, years of education, farm income, farm size, cash contribution, labour contribution, decision making, meeting attendance, aggregate social capital and instrumented social capital significantly influenced cocoa-producing households’ expenditure. Implications. The paper adds evidence for a better understanding of nexus between social capital networks and poverty alleviations. Conclusions. The study concluded that social capital alleviates poverty among cocoa-producing households. This means that policy strategy aimed toward alleviating poverty among cocoa-producing households must consider their social capital.