Economic Analysis of Swamp Rice Production

Economic Analysis of Swamp Rice Production

Chapter One

Objectives of the Study

The broad objective of this study is to examine the economics of swamp rice production in Niger State, Nigeria.

The specific objectives are to:

describe the socio-economic characteristics of swamp rice farmers in Niger State, Nigeria.
determine the inputs and output levels in swamp rice production
estimate the relationship between inputs and output in swamp rice production.
estimate technical efficiency in the swamp rice
identify the determinants of technical efficiency in swamp rice
determine the profitability in swamp rice.

CHAPTER 2

LITERATURE REVIEW

Rice production trends and effort to meet production needs in Nigeria

Rice production started in Nigeria in 1500 BC with the low-yielding indigenous red grain species Oryza glaberrima that was widely grown in the Niger Delta Area (Hardcastle, 1959). The high-yielding white grain (Oryza sativa) was introduced about 1890 and by 1960 accounted for more than 60% of the rice grown in the country. Today, rice is cultivated in virtually all the agro-ecological zones in Nigeria, but on a relatively small scale. In 2000, out of about 25 million hectares of land cultivated to various food crops, only about 6.7% was under rice (PCU, 2001).

The trend in production shows that paddy rice first experienced a boom in the 1965– 1970 periods, when average output stood at 321,000 tons (Table 1). During this period, average area cultivated to rice stood at 234,000 hectares while average national yield was 1.36 tons/ha. Another significant improvement in rice production in Nigeria was recorded in 1986–1990. During this period the output increased to over 2 million tons while average area cultivated and yield rose to 1,069,200 hectares and 2,096 tons/ha, respectively. This significant improvement in production was made possible with the introduction of structural adjustment programme (SAP) in 1986. During this period (SAP), there was total ban on importation of rice in Nigeria. This was expected to encourage local production and widen the home market for the nation rice. Throughout the 1980s, rice output and yield increased. But in the 1991–1995 periods, while rice output increased, yield of rice declined. This implies that the increased output was as a result of increased land cultivation.

There was also great disparity among the states of the federation in rice production in terms of both output and yield. In 2000, Kaduna State was the largest producer of rice, accounting for about 22% of the country’s rice output. This was followed by Niger State (16%), Benue State (10%) and Taraba State (7%) (PCU, 2001). Great variations also exist in terms of yield. The average national rice yield during the dry season (3.05 tons/ha) was higher than that of the wet season (1.85 ton/ha).

However, an active and systematic rice research started in the country in 1953 with the establishment of the federal rice station at Badeggi in Niger State, now the headquarter of the national cereals research institute (NCRI). The focus for rice research at the station was the development of varieties with improved grain quality, uniform shape and sizes appropriate for minimal breakage during milling. These aims were achieved mainly through introduction and adaptation (Imolehin, 1991). Between 1954 and 1970, 13 improved rice varieties, comprising two upland, eight shallow swamps and three deep-flooded rice were released to Nigerian farmers. From 1971 onwards, research activities on rice focused on developing high-yielding and disease resistant varieties, the efficient use of nutrients, and good soil management. These aims were achieved through introduction, adaptation and hybridization (Imolehin, 1991).

The Efforts made by the research institute resulted in the release of 16 rice varieties, with the desired traits for pest and disease resistance, nutrition and yield to Nigerian rice farmers between 1971 and 1984. The 16 varieties comprised one upland, 12 lowland and three deep-water ecology rice. As from 1985 to 1989, an additional 14 high- yielding blast-resistant varieties including six upland and three lowland varieties were released. From 1990 to date 11 more rice varieties, comprising eight uplands and three shallow swamp varieties have been released (FAO, 1999). Thus, from 1954 to 2002 a total of 54 rice varieties have been released to serve the different ecological zone and other specific needs in Nigeria. A remarkable effort to develop suitable rice varieties for Nigerian farmers was made in 1997 with the release of FARO 51, a variety that is resistant to the African rice gall midge. This variety was grown in the endemic area of Abakaliki. The variety exceeded the yields of the existing farmers’ varieties by 26% (FAO,1999).

However, recently WARDA has developed an improved variety mainly for upland farmers. The variety is known as NERICA (New rice for African countries) and it is observed that the yield could be as high as 3.0 tons per hectare or more with strict compliance with recommendations. This variety has just been released, however, and some time is required for adoption before the technology can be evaluated. Increased rice production is expected to be achieved effectively when Nigerian farmers in all the ecological zones of the country utilize improved rice varieties, along with appropriate cultural and management practices (Okoruwa and Ogundele,2006).

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CHAPTER 3

METHODOLOGY

Study Area

The study was conducted in Niger State, Nigeria. The State is in the Northern part of Nigeria and is located between latitudes 8⁰22’N and 11⁰30’E and longitude 3⁰ 30’N and 7⁰ 20’E (NGADP, 2003). It covers a land area of 76,000 sq km which is about 9% of the country’s land mass with a total arable land of 80%. This makes the State the largest in the country with an estimated population of 3,950249 (NPC, 2006). The estimated projection of population based on 3% growth rate per annum in 2010 is 4,343,038.

The State is bordered to the north by Zamfara, to the northwest by Kebbi, to the south by Kogi, to the south-west by Kwara, while Kaduna and FCT border the State to the north-east and south-east, respectively. Niger State is popular for its brass work, particularly in Bida. It is also known for pottery, weaving and several cottage industries which can be found throughout the State. However, there are three prominent ethnic groups namely, Nupe, Gbagi (Gwari) and Hausa. Other ethnic group include, Kambari, Kamuku, Gade, Pangu and Ingwai (NGADP, 2003).

The State has a tropical climate marked by distinct dry and wet seasons. The rainy season commences in April and ends in October. The dry season begins from November to end of March. It is characterized by hot weather and hamattan. It has a mean annual rainfall of 1000mm and mean temperature of 33.5⁰C. The state is characterized by Guinea Savanna vegetation with trees like Shea butter and locust bean (NGAD, 2003). More than 80% of the State’s population is engaged in agricultural production activities. The State is endowed with fertile agricultural land and has the capacity to produce most Nigerian staple food crops. It has a vast land for grazing, fishing and forestry. The Gwari, Kadara and Kamberi are noted for yam and guinea corn production, while Nupe are the major rice producers and Hausa and Fulani are known for animal husbandry. The State is endowed with abundant mineral resources, such as gold, granite, marble, copper, iron, columbite and lime stone. It has tourism attraction such as Zuma rock, Gurara water falls and Baro empire hill.

CHAPTER 4

RESULTS AND DISCUSSION

Socio- economic Characteristics of Swamp Rice Farmers

Some socio-economic characteristics may influence farmers’ production decision as well as their overall technical efficiency in production. The essence of this sub-section is to discuss the findings of this research with reference to the socio-economic characteristics that affect farmers’ technical efficiency. Such socio-economic characteristics include: age, family size, farming experience, extension contact, membership of cooperatives, access to credit and non-farm income.

Age of the farmers

More than half of the farmers (74%) were found to be within the age group of 31-50 years which is an active age group for meaningful agricultural production. The farmers within the age group of 51-60 and above 61 years constituted 5.03% and 3.15%, respectively. The least percentages of farmers (1.26%) were found within the age group of 11-20 years. The average age of swamp rice farmers was found to be approximately 39 years with minimum of 18 years and maximum of 82 years (Table 3). This finding agrees with Idiong et al. (2007) who in their study concluded that since the majorities (75%) of farmers were within the age of 24-45 years, there is likelihood of high productivity in swamp rice production.

Table 3: Age distribution of farmers

CHAPTER 5

SUMMARY, CONCLUSION AND RECOMMENDATIONS

Summary

A multi-stage sampling technique was used to select 159 respondents for this study. The data were collected from the respondents using structured questionnaire. The data were analyzed using descriptive statistics, gross margin analysis and stochastic frontier model.

The study revealed that less than 30% of farmers belong to cooperative societies. Majority (74%) were found to be under active age group of 31-50 years. The study also revealed that more than 50% had no access to credit. Gross margin analysis showed that swamp rice production earned N56740.60 gross margins per hectare. The gross margin per naira invested was also found to be N0.97. However, labour alone accounted for more than 50% of the total variable cost of production.

The Cobb-Douglas stochastic frontier production function was used to estimate individual technical efficiency of the farmers. The result showed that the individual technical efficiency ranged between 34 and 98 percent with mean technical efficiency of 86%. The maximum likelihood estimate of Cob-Douglass stochastic frontier production function for swamp rice in the study area showed that the estimated coefficients of the production function were all positive except for herbicide (β₄) which was negative. All the positive parameters were statistically significant at 1 or 5 percent. The elasticity of individual parameters was less than one and the return to scale was between zero and one (0.98) indicating a positive decreasing return to scale within stage II of the production process. Analysis of inefficiency model showed that age, family size,

extension contact and membership of cooperatives were the significant determinants of technical efficiency among the swamp rice farmers in the study area.

Conclusion

The result of the study revealed that labour was the most limited and costly resource for swamp rice production in the study area. It accounted for more than 50% of the total variable cost of production. The major socio-economic determinants for swamp rice production were extension contact, age, membership of cooperatives and family size. The result of the study revealed that the swamp rice farmers in the study area did not produce at the frontier level. This was evident by the presence of technical inefficiency among the farmers.

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