EFFECT OF COOPERATIVE SOCIETIES ON POVERTY ALLEVIATION AMONG RURAL FARM HOUSEHOLDS IN YEWA DIVISION OF OGUN STATE

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CHAPTER ONE

INTRODUCTION

1.1.      Background of the study

Nigeria as a land filled with milk and honey suffers from the menace of poverty. Different questions have been asked to how poverty which is affecting the economy can be reduced to minimum. Several Government bodies have been setup to find a lasting solution to the problem striking the masses. However,it will be expedient to know what poverty is all about and to know the meaning of cooperative according to different scholars and join the two together to have a clearer understanding of the purpose of the study.

According to Oxford Advanced Learners Dictionary, Poverty is a state of being poor. It is the inability of a household to generate adequate income for the maintenance of the household.

Poverty has become a pervasive National and Global issue resulting from a state of short or long term deprivation and insecurity in basic human needs (Chambers, 1996; Mullen, 1996;Obadan, 2002). Poverty has also become a feature of the living conditions and life situation of the vast majority of Nigerians. The incidence of poverty in Nigeria was put at 28.8% in 1980, 46.3% in 1985, 42.7% in 1992 and 65.6% in 1996. In 2008, estimates from the National Bureau of Statistics put incidence of poverty at 54.4% (Fakoya, Banmeke, Ashimolowo, Fapojuwo2010). Several evidences have suggested that majority of the world’s poor live and work in the rural area and that they would continue to do so in 2025 (IFAD, 2001).

(Oseni, 2007) defined poverty as a state of involuntarily deprivation to which a person, household, community or nation can be subjected topoverty is a condition in which one cannot generate sufficient incomerequired to secure a minimum standard of living in a sustainable pattern. Poverty in Nigeria is caused by lack of employment, high rate of illiteracy among the citizenry, poor infrastructure, inadequate access to micro credit facilities, mismanagement of public funds, bad governance, instability of the governments and its policies. Poverty gives rise to many other serious social problems, some of which, not only impose enormous economic and social costs upon the non- poor and society in general, but also threaten the survival and stability of the society. In these regards, the Federal Government of Nigeria had designed several programmes aimed at alleviating poverty and improving the living conditions of its people which include Operation Feed the Nation (OFN), Green Revolution, Structural Adjustment Programme, Better Life Programme and Family Support Programme, National Directorate of Employment (NDE), Directorate of Food, Roads and Rural Infrastructure (DFRRI), National PovertyEradication Programme (NAPEP) and National Economic Empowerment and Development Strategy (NEEDS). These programmes bythe various governments of Nigeria were designed by policy makers and targeted at poverty alleviation in Nigeria. Unfortunately, the quality of life of majority of Nigerians had remained unenviable and embarrassingly low, despite the huge budgetary allocations by these governments to these poverty alleviation programmes (Orji, 2005). There is a need to identify other means of addressing the serious damage caused by poverty to the Nigerian society, attention should therefore be shifted to the use of self-help using Cooperative organizations formed and administered by the people.

Cooperativeshave been dedicated to conducting business in a way now being recommended as the most effective route to transformational development: putting people in charge of their own destinies and helping them bring services to their communities; increasing decision making, trust and accountability through democratic participation; providing a profitable connection to the private sector; building and protecting assets at the community level; limiting the role of government; and working together to resolve problems.

A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, as well as cultural needs and aspirations through a jointly owned and democratically controlled enterprise (COPAC, 1999). A Co-operative is a group-based and members-owned business that can be formed for economic and social development in any sector (Ohio Co-operative Development Centres (OCDC) 2007). According to DFID (2005), co- operatives have four main characteristics: first, they are formed by groups of people, who have a specified need or problem. Secondly, the organization is formed freely by members after contributing to its assets. Thirdly, the organization formed, is governed democratically in order to achieve desired objectives on equitable norms, and fourthly, it is an independent enterprise promoted, owned and controlled by people to meet their needs. Cooperatives provide self-employment through millions of worker-owners of production and service cooperatives; financial cooperatives mobilize capital for productive investment and provide people with secure institutions for the deposit of savings; consumer cooperatives provide households with affordable goods and services reducing the proportion of income usedfor basic living costs, and similarly user-owned cooperatives such as housing, utility, health and social care cooperatives provide affordable access to basic services.

Cooperative as socio-economic institutions through their activities could be a potent tool for poverty alleviation particularly in fighting poverty and unemployment. This could be in the area of agriculture, provision of infrastructural facilities and education.

Therefore, in Yewa Division where the research wascarried out, the activities that was conducted is to know the impact of cooperative societies in alleviating poverty among rural households.

1.2.      Problem Statement

Poverty is seriously severe in rural areas where social services and infrastructures are limited or not in existence. The greater number of those who live in rural areas depends solely on agriculture for food and income, and a high proportion of rural people suffer from malnutrition and other diseases related to poor nutrition.

Rural poverty tends to be evenly distributed in the country rather than concentrated in specific geographical area. Rural infrastructure across has been long neglected why investment in health, Education and Water supply have largely been focused obn the cities. As a result, the rural household has extremely limited access to services such as schools, health centers and about half of the rural household population lacks access to save drinking water, limited education opportunities and poor health perpetuate the poverty circle. The poor tends to live in isolated villages that can become virtually inaccessible during rainy season.

Therefore, the situation is aggravated by the fact that many rural household are stark illiterates, and also lack inadequate capital to start a business of their own.

On the other hand,cooperatives in Nigeria are still known to be bedevilled with problems including,lack of capital, lack of access to credit facilities, poor management,misappropriation of funds, etc. While efforts are being made by stakeholders ofcooperative in Nigeria to remove and/or reduce these problems, there is anapparent consensus that the need for adequate and sufficient knowledge of the roleof cooperatives in poverty alleviation still exists. For example there is a need toidentify and analyse in sufficient details those cooperative activities and functionsthat bear directly on the economic empowerment of members, as well asidentifying factors that could promote and enhance cooperative efforts in povertyreduction. Unless these issues are known and appreciated, the emphasis oncooperative as a poverty alleviating platform may continue to be unrealistic.

The questions of interest in this study are;

  1. What are the socio-economic characteristics of the respondents in the study area?
  2. What is the incidence, depth and severity of poverty among the respondents?
  3. What are the determinants of poverty among the rural households?
  4. What are the influences of cooperative membership on poverty status of rural households?
  5. What are the constraint affecting cooperative societies in alleviating poverty?

1.3       Objectives of the Study

The broad objective of the study is to access the importance of cooperative societies in alleviating poverty among rural household.

The specific objectives are to;

  1. examinethe socio-economic characteristics of the respondents in the study area.
  2. assessthe incidence, depth and severity of poverty among the respondents.
  3. examine the determinants of poverty among the rural households
  4. examinethe influence of cooperative membership on poverty status of rural households.
  5. constraint affecting cooperative society in alleviating poverty.

1.4       Justification of the Study

From time past, Nigerian government and the international agencies have introduced measures in alleviating poverty, such programmes ranges from Structural Adjustment Programme (SAP) in early 1980s; Directorate for Food Road and Rural Infrastructure (DEFRRI). Therefore the study is aimed at the following

1)      To reveal how cooperative will further increase its role in poverty reduction and also to convince policy makers that it is time to develop a national poverty reduction policy through cooperative society.

2)      To the poor, to know how cooperative society works, which will go a long way in assisting them to reduce poverty, by establishing Cooperative Societies.

3)      To the Federal Government, they can use this work as a standard in measuring the effectiveness of cooperative societies. Hence, Government can through this work know the appropriate steps to take in funding cooperative societies.

1.5       Plan of the Study

This research was divided into five chapters, Chapter one consist of introduction, research problem; objective and justification. While chapter two consist of  literature review and conceptual framework, chapter three consist of research methodology, sampling techniques, method of data collection and method of data analysis. On the other hand, chapter four consists of result and discussion and chapter five is the summary, conclusion and recommendation


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