Analysis Of Profitability And Resource Use Efficiency In Cassava Farming

Analysis Of Profitability And Resource Use Efficiency In Cassava Farming

Abstract

The study was conducted to analyze the profitability and resource use efficiency of cassava farming in Benue State. A multi-stage sampling technique was used to select one hundred and eighty-six (186) cassava farmers from three local Government Areas. Primary data were collected with the aid of structured questionnaire. Descriptive statistics, production function analysis, farm budgeting techniques and multiple regression analysis were employed to analyze the data. The results showed that the mean age of farmers was 46 years. About 72% of the cassava farmers were male. The average household size was 9, average years of farming experience was 15 years and average farm size was 1.28 hectares. The results of the input and output levels used showed that, farm size was about 1.28 hectares, cassava cuttings was about 144 kg/hectare, fertilizer (N.P.K 15:15:15) was about439.27 kg/hectare, agro-chemical (glyphosate) was about 7.46 liters/hectares and labour was 232.62 mandays/hectares. Average output was 9.15 tonnes of fresh tubers/hectare. The results of the Cobb-Douglas production function analysis showed that all the variables (cassava cuttings, labour, farm size, fertilizer and agro-chemicals) in the model were all important in explaining the variations that occurred in the output of cassava at 51% level of variation. The results of resource use efficiency showed that cassava cuttings and farm size were under-utilized while labour, agro-chemicals and fertilizer were over-utilized. The sum of elasticities coefficient (that is, returns to scale estimate) is 0.824 and this indicates a positive decreasing returns to scale. The net farm income per hectare was N59,077 with a return on investment of 0.27. The major constraints faced by cassava farmers in the study area were identified among others to be poor storage facilities, inadequate supply of improved planting materials, and inadequate capital. It was recommended among others, that agricultural policy measures should be taken towards provision of ready market with stable prices for cassava produce through marketing boards. In conclusion, farmers are encouraged to go into cassava farming as it is a profitable enterprise in the study area.

Chapter One

Introduction

1.1 Background to the Study

Cassava was introduced into Central Africa from South America in the 16th century by the early Portuguese Explorers (Ohadike, 2007). It was probably the incapacitated slaves who introduced the cassava crop into southern Nigeria as they returned to the country from South America. Cassava however, did not gain importance in the country until the end of the nineteenth century when processing techniques were introduced as many slaves returned home (Odoemenem and Otanwa, 2011). In Nigeria, cassava is grown in all the ecologicalzones; the crop is planted all year round depending on the availability of moisture (Odoemenem and Otanwa, 2011).

Cassava is an important staple food in several tropical African countries, especially in Nigeria where it plays a principal role in the food economy (Agwu and Anyaeche, 2009). Cassava has the ability to grow on marginal lands, especially in drought-prone conditions and in low-fertility acid soils, where cereals and other crops do not thrive (Gobeze et al., 2005 as cited in Obayelu, et al., 2013). Cassava roots can also be stored in the ground (while still intact on the growing plant) for up to 24 months or more, so harvest may be delayed until market, processing or other conditions are favourable (International Institute for Tropical Agriculture, 2009). This comparative advantage over other staples serves to encourage its cultivation especially by resource-poor farmers. According to the Food and Agricultural Organization Statistics (FAOSTAT, 2011), Nigeria is the world’s largest producer of cassava with about 37 million metric tonnes and it ranks second after yam in extent of production among the root and tuber crops of economic value in Nigeria.

Benue State is a leading producer of cassava in Nigeria (Benue State Ministry of Agriculture and Natural Resources, 2003). Apart from the ecological support for cassava growth and production, Benue State has mounted deliberate strategies such as distribution of improved cassava varieties to sustain its leading role in cassava production in the country (BMANR, 2003). Cassava is a very versatile crop with numerous uses and by-products. Each component of the plant can be valuable to its cultivator. The leaves may be consumed as a vegetable, or cooked as a soup ingredient or dried and fed to livestock as a protein feed supplement. The stem is used for plant propagation andgrafting. The roots are typically processed for human and industrial consumption. Cassava is traditionally consumed by processing the fresh roots into garri, fufu, and flour (Adebayo et al., 2003a; Adebayo et al., 2003b). Data from the Collaborative Study of Cassava in Africa (COSCA) show that 80% of Nigerians in rural areas eat a cassava meal at least once weekly (Nweke et al., 2002).

1.2 Problem Statement

The problem of declining crop productivity in Nigeria is important (FACU, 1992; FDA, 1993 and 1995, as cited in Ukoha et al., 2010). The agricultural problem in Nigeria relates to the inefficiency with which farmers use resources on the farms (Bamidele et al., 2008). It also borders on how the various factors that explain farm efficiency could be determined through research so as to improve cassava production in the country (Bamidele et al., 2008). Farmers’ output must therefore be expanded with existing levels of conventional inputs and technology to meet the increasing demand for cassava.

Cassava farmers in Nigeria are small-holders characterized by very low level of productivity (Bamidele et al., 2008). These smallholder and traditional farmers who userudimentary production techniques, with resultant low yields, cultivate most of this land. They are also constrained by many problems including poor access to markets, land and environmental degradation and inadequate research and extension services (Manyong et al., 2005).

Simonyan et al. (2010), as cited in Nandi et al. (2011) stated that Nigerians are poor and hungry despite efforts made by various governments in improving agricultural productivity and efficiency of the rural farmers who are the major stakeholders of agricultural production. Given the various government programmes such as the National Accelerated Food Production Programme (NAFPP), Operation Feed the Nation (OFN), the Agricultural Development Projects (ADPs), Cassava Multiplication Programme (CMP), and Root and Tuber Crop Expansion Program (RTEP), implemented over the years to raise farmers’ efficiency and productivity in cassava farming, productivity for cassava is still low. For example, the actual yield of cassava ranges between 8 and 15 tonnes per hectare, compared to a potential yield of 30 tonnes per hectare – a yield gap of 275 and 100 percent respectively (FAO, 2011 as cited in IITA, 2015). And also, given the increasing interest of more nations in buying cassava products from Nigeria, the prospects for enhanced foreign exchange is becoming high (Ogisi and Alimeke, 2013). It then becomes necessary to economically analyze the profitability and resource- use efficiency of cassava farmers.

1.3 Research Questions

1. What are the costs and returns for cassava farming in the study area?
2. What is the technical relationship between inputs and output in cassava farming in the study area?
3. How efficiently are resources used by cassava farmers in the study area?
4. What are the major constraints faced by cassava farmers in the study area?

1.4 Objectives of the Study

The main objective of this study is to evaluate the profitability and resource-use efficiency in cassava farming in Benue State, Nigeria.

The specific objectives are to:

1. Estimate the costs and returns of cassava farming in the study area.
2. Determine the resource use efficiency in cassava farming in the study area.
3. Determine the relationship between cassava farmers’ socio-economic characteristics and their output.
4. Identify and describe the major constraints faced by cassava farmers in the study area.

1.5 Research Hypotheses

1. Cassava farming is not a profitable enterprise in the study area.
2. Resources are not efficiently used by cassava farmers in the study area.

1.6 Justification for the Study

Agricultural productivity, growth and resource-use efficiency are the core elements of sustainable crop production as inefficient use of inputs can endanger food availability and security (Udoh et al., 2006).

It is clear that the rural sector consisting of farm families, offer great potential for employment generation for the teeming population. However, this potential will not be achieved if productivity and efficiency are not increasing within the rural sector. In achieving this within the rural sector, particularly among small-scale farmers, a good knowledge of the current efficiency or inefficiency inherent in the sector as well as factors responsible for this level of efficiency or inefficiency is required (Amos, 2009).

The results of this study will be of immense benefit to the farmers and other stakeholders in the agricultural industry, as it will help highlight those variables that could be better managed to improve the productivity of cassava farming. The results of this study will also guide policy makers in making policies for the improvement of the welfare of cassava farmers, which will give room for the expansion of cassava production.

Chapter Five

Summary, Conclusions and Recommendations

5.1 Summary

The study was conducted in Benue State to evaluate the profitability and resource use efficiency of cassava farming.
The specific objectives of this study were to estimate the costs and returns of cassava farming in the study area, determine the resource use efficiency in cassava farming in the study area, estimate the elasticity of production and returns to scale in cassava farming in the study area, and identify and describe the major constraints faced by cassava farmers in the study area.

A multi-stage sampling technique was used to select 186 respondents for this study. Primary data was the main instrument for this study and it was collected from the respondents through the interview method by the researcher using sets of structured questionnaire with the aid of enumerators from the Benue State Agricultural and Rural Development Agency (BNARDA). The data were analyzed using Descriptive statistics, Production function, Multiple regression analysis and Gross Margin analysis.

5.2 Conclusion

Cassava farming was found to be a profitable enterprise in the study area because it recorded a Net Farm Income of N59,077 per hectare and a return on investment of 0.27 which implies that for every Naira spent in cassava farming, a profit of 27kobo is realized. The results of this study revealed that resources were not efficiently used by the cassava farmers in the study area. Some resources were under-utilized while others were over-utilized. The farmers should be encouraged through technical training on production techniques/ practices that will improve their productivity especially in those areas of inefficiency and underutilization of inputs. This study has also revealed that revealed that the cassava farmers’ age, gender, education, farming experience and years of cooperative membership were significantly related to their output. Farmers are encouraged to go into cassava farming as it is a profitable enterprise in the study area.

5.3 Recommendations

Based on the findings of this study, the following recommendations are made:

Government should develop cost effective storage facilities for these famers in order to make products readily available on demand and also to reduce post- harvest losses due to lack of adequate storage facilities.
Agricultural policy measures should be taken towards provision of ready market with stable prices for cassava produce through creation of marketing boards by the government.

Labour was found to be the variable that accounted for the highest cost of production and it was over-utilized. Attempts at reducing labour cost will lead to greater Net Farm Income and subsequently, the overall profitability of the enterprise.

Relevant infrastructures such as good access roads from farm gates to markets, electricity and good water supply should be made available by either the government or private sectors.

Since the government does not have and will probably may not have for a long time, enough extension staff and resources for the current extension system, alternative extension strategies such as group extension methods, more cooperative groups, etc should be evolved to complement the existing system.

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