Indigenous Policy Journal Vol. XXIII, No. 3 (Winter 2013) Sofoluwe, Tijani, Ogundari. Indigenous Technology Adoption and Poverty Reduction in Rural Nigeria. 1 Indigenous technology Adoption and Poverty Reduction in Rural Nigeria Sofoluwe, N.A. (Corresponding author: afolabiadisa@yahoo.com) Department of Agricultural Economics, Obafemi Awolowo University, Osun state, Nigeria Tijani, A. A. Department of Agricultural Economics, Obafemi Awolowo University, Osun state, Nigeria Ogundari, K Institute of Food Economics and Consumption Studies, University of Kiel, Germany Abstract This paper evaluates the potential impact of indigenous agricultural technology adoption on poverty of farm households. It does so through an empirical investigation of the relationship between adoption of indigenous innovation, of the crop protection type, and wellbeing of farm households in Nigeria. As the indigenous innovation adoption is not randomly assigned but there is ‘self-selection into treatment’, the paper tackles a methodological issue in assessing the causal ’effect of the innovation on farm-household wellbeing through the non-parametric matching analyses applied to a cross sectional survey data. It pursues a targeted evaluation of whether adopting the indigenous technology improves farmers income and subsequently their well being. The result revealed a positive and significant effect of adoption on adopter’s income suggesting that there is a large scope for enhancing the role of indigenous agricultural innovation in ‘directly’ contributing to poverty alleviation. Keywords: Indigenous; Adoption; Poverty Reduction; Propensity score matching; JEL classification: Q12, Q16, H43 Introduction Reduction of poverty among rural poor remains an important issue because of its relevance to economic development theory. The projections that over 60% of the rural populace will continue to remain poor in 2025 (Mendola, 2007) suggest a need to focus on poverty reduction strategies of rural households. In Nigeria, Most rural households engage in agriculture which contributes significantly to the Gross Domestic Product (GDP) and employing about 77 percent of the working population (CBN and NBS 2006). World Bank in their analysis of the poverty in Nigeria noted that poor families are in higher proportion in farming households who are mainly in the rural areas; regions where agriculture is the major source of employment. Since poverty is widespread and is largely rural, increase in agricultural productivity has therefore being suggested as the main pathway out of poverty (Alene et al. 2005). However studies revealed that poverty is rarely due to insufficient production but rather to sustainability of smallholder farming, disregard for indigenous knowledge (IK), local agricultural resource management and utilization of the poor factor endowment for improved income earnings and well-being (Wolfgang and Wanyama, 2006; WDR, 2008).