An Empirical Reassessment of the Impact of Small and Medium Scale Agricultural Enterprises on Household Welfare: Evidence from Kariji, Southern Kaduna, Nigeria

Abstract

Small and medium-scale agricultural enterprises (SMAEs) are widely recognised as a foundational component of rural economic life in sub-Saharan Africa, yet their specific effects on household welfare within localised farming communities remain insufficiently examined. This study empirically investigates the impact of SMAEs on household welfare and employment generation in Kariji, Southern Kaduna, a predominantly livestock-farming community in north-central Nigeria. Adopting a descriptive survey design, primary data were collected through structured questionnaires administered to 348 purposively selected respondents from a registered population of 2,650 SMEs in Kaduna State and analysed using descriptive statistics, chi-square hypothesis testing, and OLS regression at a 5% significance level. Survey instrument reliability was confirmed with Cronbach’s Alpha values of 0.79–0.81 across all scales. Descriptive findings reveal moderately positive perceptions of SMAE contributions across six household welfare dimensions, namely financial well-being, improved living standards, reduced external dependency, healthcare access, food security, and education cost coverage, with means ranging from 2.99 to 3.14, alongside four employment dimensions with means between 2.92 and 3.02. Chi-square analysis indicates no statistically significant impact on either household welfare or employment creation, with all p-values substantially exceeding the 0.05 threshold. However, OLS regression controlling for household size, enterprise tenure, and enterprise type reveals that funding constraints, regulatory burden, and infrastructure deficits exert significant independent suppressive effects on welfare (R² = 0.218; F = 11.82; p < 0.001) and employment outcomes (R² = 0.191; F = 9.93; p < 0.001), explaining the apparent disconnect between moderate positive descriptive perceptions and chi-square inferential insignificance. These outcomes are attributed to compounding structural barriers including limited access to affordable finance, inadequate rural infrastructure, unfavourable regulatory conditions, poor market linkages, and insufficient entrepreneurial capacity. Grounded in Social Capital Theory and the Resource-Based View, the study recommends targeted microcredit expansion, rural infrastructure investment, entrepreneurial capacity building, regulatory reform, and cooperative market development as pathways to unlocking the developmental potential of agricultural SMEs in rural Nigeria.