Abstract
This paper analyzes income inequality among sample of farm households in rural Nigeria. Results show that the overall Gini coefficient of income inequality is 0.40, and that while farm income decreases income inequality, off-farm income increases inequality. Among the components of off-farm activities, agricultural wage, non-agricultural wage and self-employed income increase inequality, while remittances and other income (pensions and capital income) decrease income inequality. On the whole, farm income contributes about 35% while off-farm income contributes 61% to total inequality. Crop income – contributing about 33%, contributes more to total income inequality than any other income source. This is followed by self-employed income, which contributes 32% to total income inequality. Because growth in the off-farm sector is likely to increase inequality, the study recommends the removal of barriers faced by poor households in assessing better off-farm employment opportunities, so that it would have an equalizing effect on income distribution. This would require the provision of education and accessible credit schemes, coupled with provision of physical infrastructures that would create more economic opportunities for the poor households in the rural areas