The level of savings in Nigeria is low despite its significance in supporting the growth of rural enterprises. This study uses a double-hurdle model regression approach in assessing the drivers of rice farmers’ savings. The objectives of the study were to estimate farmers’ cash and kind savings, and determine the factors that influence the decision to save as well as the level of savings. Data were collected using a structured questionnaire from 266 randomly selected smallholder rice farmers. The results show that the majority of the respondents (about 90%) had no access to financial services and saved mostly in informal forms accounting for 34.7% of their income. The study also found that occupation had positive and significant influence (P<0.01) on decision to save; urban location had negative effect (P<0.01) on the decision to save but positive and significant effect (P<0.01) on the level of savings while income and education both had positive and significant effects (P<0.01) on the decision to save and the extent of savings. Based on the findings, the study recommended that policies and development initiatives should promote strategies such as increasing productivity, improving prices of outputs and increasing efficiency in the use of inputs that will help farmers improve their incomes and farmers should be provided with basic financial literacy and understanding of savings for the development of savings culture.

Keywords: Determinants, savings, smallholder, rice farmers, double-hurdle