Cost And Returns Of Cassava Production In Awka South Anambra State

Project and Seminar Material for Agricultural Economics and Extension

Abstract

This research was a cost and return analysis of cassava production in Awka South Local Government Area of Anambra State, Nigeria. A multistage sampling technique was used to select 100 respondents in a ratio of 50 adopters and 50 non- adopters. Data were collected through questionnaire and analyzed using descriptive and inferential statistics. Gross margin was carried out to estimate cost and return. Results revealed that females (68% and 64%) were dominant for both groups of cassava farmers, and majority (88%) of the farmers were educated, implying that they would be more amenable to adopt technologies. The cost and return analysis shows that, total variable cost per hectare was N56,455.00 and N36,850.00 with a gross margin of N77,550.00 and N36,560.00 for adopters and non- adopters respectively, meaning that cassava farming is profitable. Determinants of cassava production for both groups of farmers were farm size, cassava cuttings, fertilizer use and extension contact. Whereas increased farm size, cassava cuttings and extension contact significantly and positively influenced output of both groups of farmers, fertilizer use had a negative but significant influence on output of adopters, implying that fertilizer use resulted in decrease output of the adopters. They are advice to discontinue the use of fertilizer. Furthermore, lack of awareness and high cost of inputs were among the major constraints to full adoption of improved cassava varieties in the study area. Therefore, it is recommended that policies aimed at improving farmer’s education and awareness should be redesign for proper implementation.

Table of Content

Preliminary Page(s)

Title Page
Declaration
Approval
Dedication
Acknowledgement
Abstract
Table of Content

Chapter One

1.0 Introduction

1.1 Background of the Study
1.2 Statement of the Problem
1.3 Research Objectives
1.4 Research Questions
1.5 Hypothesis
1.6 Significance of the Study
1.7 Definition of Terms
1.8 Organization of Study

Chapter Two

2.0 Literature Review

2.1 Conceptual Review
2.2 Cassava Production in Nigeria
2.3 Cost and Returns of Cassava Production
2.3.1 Cost and Return Analysis
2.3.2 Functional Forms of Production
2.4 Constraints Faced by Cassava Farmers
2.5 Production Theory

Chapter Three

3.0 Methodology

3.1 Study Area
3.2 Sampling Technique
3.3 Analytical Technique
3.4 Model Specification

Chapter Four

4.0 Results and Discussion

4.1 Results

Chapter Five

5.0 Summary, Conclusion and Recommendation

5.1 Summary
5.2 Conclusion
5.3 Recommendation
References
Appendix
Questionnaire

Chapter One

1.0 Introduction

1.1 Background of the Study

Agriculture is the economic mainstay of the majority of households in Nigeria and is a significant sector in Nigeria’s economy providing employment for more than 70% of the population. A sectoral analysis in 2006 of real gross domestic product (GDP) indicated that the agricultural sector contributed about 42 percent of the Gross National Product (GNP) compared with 41.2 percent in 2005 (Central Bank of Nigeria, 2006). Recently, the contribution of agriculture to the country’s GDP has further been diluted to 21.97%, as a result of rebasing, giving other sectors such as finance services, construction, entertainment etc. the opportunity to brace up their contribution to the economy.

The Nigerian agriculture is characterized by considerable regional and crop diversities that feature among others tree and food crops, forestry, livestock and fishery (Echebiri and Edaba, 2008). Cassava is the most commonly cultivated food crop in almost every part of the country, and it may be the solution to Nigeria’s food security problem due to its ability to grow in a wide range of conditions, some of which are quite unsuitable for other crops. It is a perennial woody shrub commonly grown in the tropics and can be regarded as the most important root crop in terms of land area devoted to total production ( Onubuogu, 2014).

Nigeria is the largest producer of cassava in the world with over 34 millions produced in 2007, (Food and Agricultural Organization, 2007). The growth of cassava production has been primarily due to rapid population growth, large internal market demand, availability of high yielding improved varieties of cassava and existence of improved cassava technology. However, most of what is produced was consumed locally until recently, with over 50 percent of harvested produce wasted due to production post harvest inefficiencies (Lenis et al, 2006). They posits that if these inefficiencies are addressed alongside the current development of improved varieties of cassava coupled with an associated yield increase, Nigeria could take advantage of the increased national and international market around the globe. Cassava is produced largely by small scale farmers using rudimentary implements. The average land holding is less than 2 hectares and for most farmers, family labour remains essential input. Land is held on communal basis, which is either inherited or rented. Nweke (2003), posited that in recent times, cassava production has doubled and tripled with nearly 90% of production from small holder farms cropped with earlier released improved varieties (TMS 30572, TMS 4(2)1425, TMS 30555) and other traditional low yielding varieties.

Agriculture employs about two-third of Nigeria’s total labour force, contributed 42.2% of Gross Domestic Products (GDP) and provides 88% of non-oil earnings (Yakubu and Akanegbu, 2015). The contribution to agricultural GDP is in the following proportion; crops (85%), livestock (19%), fisheries (4%) and forestry (1%). Also, more than 90% of the agricultural output is accounted for by small-scale farmers with less than two (2) hectares under cropping (World Bank, 2005). Among the crops that contribute to 85 per cent of Nigeria’s GDP, cassava (Manihot spp.) is recognized together with yams, rice, maize, sorghum, and millet as the main staple food crops in Nigeria (NEEDS, 2004). Cassava has a high poverty-reduction potential for Nigeria due to its low production cost (FAO 2005).

Cassava (Manihotspp) is the fourth most important crop for farmers in tropics after rice, wheat, and sugarcane, consumed by up to a billion people globally (FAOSTAT, 2010). Cassava is originally a crop of Brazil in South America; however, the introduction of cassava to the Southern parts of Nigeria was in the sixteenth century (Adeniji et al., 2005). The two significant types of cassava usually cultivated in West Africa are the sweet cassava (Manihotpalmata) and the Sitter cassava (Manihotutilisima). Cassava is suitable for the making of fufu, gari, flour, tapioca, animal feed, ethanol, starch, gum, and glucose. Its roots are eaten as food, fed to stock, or used in the manufacture of starch (Eguono, 2015). The leaves are sources of vitamins, minerals, and proteins. Cassava is cultivated all through the year, which makes it more desirable compared to periodic crops like yam, beans or peas. It exhibits an extraordinary capacity to adapt to climate change, with a tolerance to low soil fertility, resistance to drought conditions, pests’ diseases, and suitability to store its roots for long periods underground even they mature.

Cassava is one of the world’s most significant food crops. In 2013, it recorded a year global output of about 276 million metric tons (MT). The leading producers worldwide in the year 2013 were Nigeria, Thailand, Indonesia, Brazil and the Democratic Republic of Congo which accounted for 19%, 11%, 9%, 8%, and 6% of the overall respectively. Moreover, demand for the crop globally has been increasing expressively between 2004 and 2013 due to its recognition as a food security crop for rising populations in developing markets, and the increasing call for technologically processed produce from cassava. Cassava crop generates a source of living for most rural people. Practically, almost all the cassava (90%) cultivated in Africa are staple food for consumption. It provides calories for 500 million people and constitutes 37% of the population’s dietary energy requirements (Asante-Pok, 2013).

Cassava is a staple food of an average household, particularly for a poor rural family in Nigeria. Cassava or its derivatives form part of daily diet both for poor and non-poor households. Therefore, this makes it an essential factor in food security, poverty alleviation and employment generation, among others. International Fund for Agricultural Development (2004) disclosed that on a per capita basis in Nigeria, North Central is the highest producer, producing at 0.72 tonnes per person in 2002, followed by South East (0.56), South-South (0.47), South-West (0.34), North-West (0.10) and North-East (0.01). Also, the national per capita production of cassava is 0.32 tonne per person (Igberi and Awoke, 2013).

Cassava roots are rich in starch and contain significant amount of calcium, phosphorus and vitamins. However, they are poor in protein and other nutrients. In contrast, cassava leaves are good source of proteins if supplemented with the amino acid methionine, despite containing cyanide ( Odoemenen and Otanwa, 2011). Apart from cassava being processed and consumed as fufu, garrietc by both rural and urban dwellers in Nigeria, the products are also used for making starch, livestock feed, ethanol production, adhesive for pharmaceutical industries and flour for confectioneries industries. In view of these, efforts have been intensified towards increasing production in the country to a level of sufficiency. One of such commitment was the pronouncement and investment of the Obasanjo administration to increase production to a level that serves the nucleus of much industrial production in Nigeria in 2002. Cassava suddenly gained prominence in Nigeria following the announcement of a presidential initiative on the crop. The initiative was aimed at using cassava production as the engine growth in Nigeria. In recent times, government has encouraged the use of the crop to produce a wide range of industrial products such as ethanol, glue, glucose, syrup and bread. The Nigerian government has also promulgated a law, making it compulsory for bakers to use composite flour of 10% cassava and 90% wheat for bread production. The new regulation which came into effect in January 2005, stipulated that the large flour mills that supply flour to bakeries and confectioneries must pre-mix cassava flour with wheat flour (Eze and Nwibo, 2014). This initiative has encouraged more farmers to go into cassava production in Nigeria. However, in spite of this, Omonona, 2009 and Oyegbami et al, 2010, notes that cassava production is still mostly done by rural smallholder farmers using low level production techniques. Though government at various levels, have been trying in various ways to encourage rural farmers to adopt the modern cassava production technologies in order to increase productivity, there are constraints to adoption in rural farming communities ( Eze and Nwibo, 2014; Teklewold et al, 2006; Otoo, 1994; and Fresco, 1993). Therefore, the need to carry out a comparative study of cost and return of adopters and non adopters of improved cassava varieties with a view to determine their profitability and constraints is imperative.

Almost one-third of the overall national output of cassava emanates from the Niger Delta area where its inhabitants depend on cassava as a primary source of food and income. The cassava production system in Akpabuyo and elsewhere in Nigeria is characterized by smallholders that cultivate not more than 2 hectares of cassava (average of 0.5 ha) and is subsistent in practice, primarily grown for the traditional food market. Any excess cassava is either processed on the farm or sold to local processors. The average production figures per hectare in Nigeria were 10.5 MT/ha in the early 1970s, 11.5 million MT/ha in the 1980s, 10.5 million MT/ha by the end of 1980s, and 11.5 million MT/ha in the 1990s and up to 17.3 million MT/ha in 2004 (Igberi and Awoke, 2013, Ashaye et al., 2018). According to FAO estimates, Nigeria generally produces about 50 million MT annually from a cultivated area of about 3.7 million ha.

Even though Nigeria is the largest producer of cassava in the world, the country is not an active participant in the international market on cassava when compared with Brazil, Indonesia, and Thailand with lesser production output. Thailand and Indonesia are leaders of world trade on cassava today (Agom et al., 2012). Moreover, 90 per cent of the total cassava produced in Nigeria is for consumption, while only as low as 10 per cent is for industrial products. It was because of these reasons that the Nigerian presidential initiative on cassava production and export in 2002 called for increased production to meet both local and export markets (Omotayo and Oladejo, 2016). Governmental and non-governmental organizations have made several efforts to encourage increased cassava production in Nigeria.

However, the main challenges have been the fact that rural smallholders mostly do production using low-level production techniques, having insufficiently established marketing networks and inadequate infrastructure needed for an effective production and marketing system (Oyegbami et al., 2010). This study, therefore, was conducted to collect data on the current status of cassava production in Akpabuyo LGA of Cross River State as well as assess the current challenges of production to proffer solutions to enhance productivity.

1.2 Statement of the Problem

Cassava production in the world is highest in Nigeria, but the production system in Akpabuyo and elsewhere in Nigeria is characterized by small-scale farmers that cultivate less than 2 hectares of cassava, and their production is primarily subsistent, grown for the traditional food market. Some constraints to cassava production exist in Akpabuyo, and some of them are pest related. These include cassava green mite, cassava mealybug and the variegated grasshopper. The disease-related ones are cassava mosaic disease, cassava bacterial blight, cassava anthracnose, and the root rot. According to the International Institute of Tropical Agriculture (IITA) (2017), these constraints, together with poor cultural practices, combine to cause yield losses that may be as high as 50% in Africa. Asante-Pok (2013) suggested that improved cassava varieties that are disease and pest resistant, low cyanide content, drought-resistant, early maturing and high yielding are crucial in production. However, the availability of these improved varieties of planting stock has not been consistent because up to 40% of the farmers do not have access to enhanced planting stock (IITA, 2017). Hence this study intends to evaluate cost and returns of cassava production in Awka South LGA, Anambra State.

1.3 Research Objectives

The broad objective of this study is to carry out a cost and return analysis of cassava production in Awka South Local Government Area of Anambra State.

The specific objectives include:

To examine the socio-economic characteristics of cassava farmers in Awka South Local Government Area of Anambra State
To estimate cost and returns and determine the profitability of cassava production in in Awka South Local Government Area of Anambra State
To identify the determinants of cassava production
To examine the constraints associated with adoption of improved varieties in in Awka South Local Government Area of Anambra State

1.4 Research Questions

What are the socio-economic characteristics of cassava farmers in Awka South Local Government Area of Anambra State?
What is the cost and returns and determine the profitability of cassava production in in Awka South Local Government Area of Anambra State?
What are the determinants of cassava production?
What are the constraints associated with adoption of improved varieties in in Awka South Local Government Area of Anambra State?

1.5 Hypothesis

HO1: There is no significant difference between the cost and return of cassava production in Awka South Local Government Area of Anambra State
HA1: There is a significant difference between the cost and return of cassava production in Awka South Local Government Area of Anambra State

1.6 Significance of the Study

Productivity in agricultural activities needs to be enhanced to meet up with energy needs of the teeming population and combat the ravages of hunger and poverty. Since the foreseeable future of smallholder farmers is tied to agriculture (Marinos and Ehui, 2006), the study becomes worthwhile. This calls for the re- assessment of the position of agricultural innovation adoption by way of the extent of adoption by smallholder farmers who are production engine in developing countries like Nigeria. Equally, agricultural innovation is the engine that could drive the productivity of this vulnerable group. It is obvious that proper adoption of agricultural innovation will improve the productivity of labour among other factor inputs. This will result in increased agricultural output of the farmer.

In addition, much of the smallholder farmers are not literate enough to avail themselves of the implication of technical efficiency indicators hence the conversion of the efficiencies of factor inputs to monetary terms. This will improve their understanding that will in turn translate to proper resource allocation decision for profit maximization. All these put together will result to income generation ability of the smallholder farmers thereby reducing their choice constraints.

Moreover, low productivity in agriculture is blamed on poor adoption of agricultural innovations and much work has been based on them but with less result. It is expected that this study will result in increased input productivity thereby shifting the resources of researchers beyond primary output level. It is equally expected that the work will provide empirical information base for further research in other related fields.

Finally, this work is expected to change the perception of policy makers in agricultural development by seeing adoption as a continuum. This will encourage a redesign of program towards increasing farmers’ output from agriculture, which is the main occupation of farmers that constitute 70 percent of the labour force. In this way, export base of Nigeria vis a vis primary agricultural commodities will receive a boost. This in turn will generate enough foreign exchange that affects national income positively. These create the enablement for realizing Millennium Development Goals.

1.7 Definition of Terms

Cost:

Is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost.

Returns:

Is the gain or loss of an investment over a certain period of time.

Cassava:

Is a root vegetable. It is the underground part of the cassava shrub, which has the Latin name Manihotesculenta. Like potatoes and yams, it is a tuber crop. Cassava roots have a similar shape to sweet potatoes. People can also eat the leaves of the cassava plant.

Cassava Production:

Refers to the process of cultivating, harvesting, processing and sales/distribution of cassava

1.8 Organization of Study

The study comprises of 5 chapters. In chapter one, the concepts are introduced and the problem of the study is established with the research objectives and questions. Chapter two presents the literature review while chapter three presents the research methodology. The fourth chapter presents the results and discussion, and the last chapter presents the conclusion and recommendation.

Chapter Five

5.0 Summary, Conclusion and Recommendation

5.1 Summary

This study was carried out to analyze cost and return of cassava production in Awka South Local Government Area of Anambra State. The multistage sampling technique was used to select one hundred (100) respondents.

Information on farmers’ socio-economic characteristics, costs and returns in cassava production and constraints to production were collected by administering questionnaires to the farmers. Data used for the study were analyzed using descriptive statistics, gross margin analysis and regression model. From the study, cassava farming is dominated by females among the adopters and non-adopters in the study area. Production was greatly influenced by farm size, cassava cuttings, fertilizer and extension contact. Increase in farm size, cassava cuttings and fertilizer use will result in increased output of the non-adopters of improved varieties. For the adopters, the more farm hectares they cultivated and number of extension contacts they have, the more their output. This has confirmed the fact that adoption of innovations results to increase in output and income of small scale farmers.

5.2 Conclusion

Form this study, the non-adopters should be encouraged to adopt the improved varieties by addressing the problem of lack of extension contact. The study concluded that cassava production in the study area is profitable but the adopters earn more profits and incurred more costs than the non-adopters. Cost of labour and fertilizer were the major costs of the adopters. Furthermore, the problems militating against the adoption of improved cassava varieties in the study area are high level of illiteracy, inadequate finance, lack of extension contact, lack of awareness and high cost of inputs. Therefore, there is need for redesigning and effective implementation of already existing policies aimed at improving farmer’s education in order to increase their level of awareness. Farmers are also encouraged to form cooperatives in order to enable them access credit to procure farm inputs.

5.3 Recommendation

Based on the findings of the study, the following recommendations were made;

Government should investment in rural education through effective extension delivery programme in the current political and economic environment in the State. This will provide farmers with skills necessary for increased efficiency.
The government should secure enough arable land from communities that have enough and make it available to individuals from the same communities for agricultural production.
The Government should invest in agricultural sector to encourage diversification of cassava products, that is- value addition, with effective demand to favour the purchase of cassava roots at a profitable price.
Government should establish agricultural banks in the rural areas of the State to provide soft loan and for easy accessibility to rural dwellers.
There should be subsidization of fertilizers and other agro-chemicals to enhance their affordability by rural farmers. In addition, there should be provision of credit input materials to farmers. These will encourage undercapitalized farmers to adopt improved cassava varieties for better production
Generally, the Government should encourage the youths who are sources of labour and more active in cassava production by giving them financial grants and/credit. This will discourage rural-urban migration for white-collar jobs.

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