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The main objective of the research was to use multinomial logit model to estimate income sources of watermelon farmers in northeastern Nigeria. A total of 434 farmers were sampled through multi-stage sampling procedure covering three Local Government Areas of Yobe state, Nigeria. The sources were personal savings, friends and relatives, Bank loans and cooperative/thrift societies. The results revealed that farm size, age and level of education were significant at 5% probability level and positively influenced the utilization of income from friends and relatives. Farmers' level of education, total cost of production and farm size significantly influenced farmers to obtain loans from banks. The marginal effects were 0.0504, 2.75 and 0.0038 showing the degrees of probabilities the variables can influence bank loans. Watermelon farmers can only obtain loans from cooperative and thrift society based on their farm size, total revenue, age, total cost and their level of output. These variables were significant at 1% and 5% probability levels with appropriate signs. The study concluded that 60% of the farmers fund their farm through personal savings and was difficult to get bank loans. It was recommended that micro-savings be encouraged among farmers and cooperative/thrift societies should be encouraged and adequately developed through the Non-Governmental Organizations.

Multinomial Logit Estimation of Income Sources by Watermelon Farmers in Northeastern Nigeria