PROJECT TOPIC- AGRICULTURAL RISKS MANAGEMENT STRATEGIES NEEDED BY FARMERS IN WESTERN AGRICULTURAL ZONE OF KOGI STATE
The study was carried out to investigate the risks management strategies that are needed by crop farmers in the Western Agricultural zone of kogi state. Five research question and five corresponding hypothesis tested at 0.5 level of significance and 131 degree of freedom guided the study. A survey research design was adopted for the study. A total of 147 registered farmers with the state A.D.P. and, 17 extension workers were randomly
sampled. A structured Questionnaire was used for data collection. The reliability coefficient of the instrument was 0.70 using Kuder- Richardson Formula K- R 21. Four experts carried out face validation of the instrument. Mean and standard deviation were used to answer the research question while t-test statistic was used to test the hypotheses. The study showed that farmers need many climate risks management strategies to deal with the risks of climate change in their farming enterprise. Farmers also need proactive and modern pests and diseases risks management strategies to combat diseases risks instead of using local hardy varieties which are more resistant to diseases but less yielding. Marketing strategies that will enable the farmers to benefit from increases in price of farm produce at any time are seen to be needed as price and market risk management strategies rather than those strategies that will force the farmers to a fixed price with stable market. Farmers require all proactive strategies that will help them to overcome any of the social risks they may encounter in the course of farming. The coping strategies that are
needed by farmers are those that they can access from their own savings, assets, self discipline by cutting down expenses and those from government and Non Governmental Organizations (N. G. Os). They lack trust in the genuineness of insurance industry to provide succor for them in time of stress. It was recommended that the stabilization of agricultural inputs and output prices should be ensured to encourage farmers and remove market risks from their array of risks, enlisting of farmers in the programme and activities of the National Emergency Management Authority (N. E. M.A.) should be ensured to provide relief materials and succor for farmers in adverse situation. Also the National Geographic Information Systems (N.G.I.S) should be providing rural farmers with current information about expected changes in weather conditions so that they can be well prepared in advance and strategize their activities to manage risks associated with sudden changes in climatic conditions.
Background of the Study
Agriculture is the basic source of human sustenance on the planet earth. It is the primary source of food for human existence. Agriculture is the first occupation on the earth and it has been the primary occupation of people of Western Zone of Kogi State. It is the primary source of food for human survival. Agriculture has been defined as the entire range of technologies associated with the production of useful products from plants and animals, including soil cultivation, crop and livestock management and the activities of processing and marketing (Sci-Tech Encyclopedia, 2009). It is from agriculture that man obtains both fleshy and vegetable foods, fibers for cloth and even wood and plant coverings for shelter. Osinem (2005) stated that agriculture is the activity most essential for human survival: it feeds people, produces basic commodity for the society, and provides gainful employment for the majority.
Thus, it can be said that agriculture is the basic foundation upon which all other sphere of human development stands. However, in spite of this basic importance of agriculture, it is laden with risks. As a result of these risks, agriculture in Western Zone of Kogi State and Nigeria at large has suffered negligence and low patronage. Thus, these risks had prevented agriculture from achieving its basic purpose to the maximum.
Risk ,as defined by Alan, Craig, James, Michael and Cole (2004) is a higher likelihood or probability of an adverse outcome or peril or a potential loss. It involves the magnitude of loss if it were to occur as well as the expected value of the potential loss. Risk is a combination of a chance of a particular event happening, with the impact that the event would cause if it occurred. The consequence may either be desirable or undesirable
(Wallingford, 2002). Hence risk is the uncertainty that the outcome of an event would be as expected or not.
Risk in agriculture is the uncertainty that agricultural production will yield expected outcome or not. However, risks in agriculture are usually connected with negative effect. Jani and Parshad (2007) explained that agricultural risks is associated with the negative outcome that stems from imperfectly predictable, biological, climatic and price variables. Agricultural risks are associated with the probability of an adverse event resulting from the effect of natural adversities (like pest and diseases and climatic factors) not within the control of the farmers. Risk in agriculture is anything that threatens farm enterprises. “Risk in farming is something that would prevent the farmer from gaining profit or profitable opportunities which he would expect to get (Nam, Wagener, Russell, Cameron, Coventry, and Cooper, 2007).
The level of risks involved in agriculture is believed to be greater than risks involved in any other sectors. This is because agricultural operation depends solely on the elements of weather and climates on which farmers have little or no control. Bhowmick (2008) noted this fact that risks are inherent in every form of enterprise, but its intensity in input-output relation in agricultural practices is comparatively high. Hazell (1992) is also of the same opinion that agricultural production is typically a risky business. Consequently, the high risks associated with agriculture had been a source of discouragement to many people from engaging in practical agriculture.
Agriculture as the science or business of raising plants and animals useful to man (Olaitan and Omomia, 2006) involves cultivation of the soil, the production and harvesting of crops, the care and breeding of livestock all of which depends on natural environments. Though, the primary production sector of agriculture has been farming which could be growing of crop or rearing of livestock. The people that actually engage in these aspects of agriculture are regarded as farmers.
Farmers are the people that engage in the production of food by preparing the land to grow crops especially on a large scale (The free online Dictionary, 2003). Farmers transform natural resources in the form of climatic and land resources to produce crops and livestock for human consumption. Farmers face a lot of risks in farming. They are the primary risk bearers in farming. These risks manifests in the form of variation in fertility of soils, excessive or low rainfall, outbreak of pest and diseases and market forces. Farmers are foremost faced with the risks of injury and health hazards in the course of preparing their land or raising their animals.
The drudgery associated with farming poses some health (body sickness and injury) and safety (danger to life) problems to the farmers. Farmers are prone to injury and accidents from their tools and implements as well as wild animals. On completion of tillage and planting, they are faced with the risks of weather and climate in order to get a bumper harvest. After production, farmers sell their products in the market. The surplucity or scarcity of the products in the market determines what the farmers will get as profit from all his effort. Farmers also experience loss of lives and property from thieves and fire outbreaks.
Moreover, constant changes in technology expose the farmer to the risk of being outdated in his production (Alan, Dobbins, Pritchet, Boehlje and Ehmke 2004). Higher interest rates from lenders also put the farmer at the risk of not realizing capital and profit after production if the production capital was a loan. These and many more are the various sources from which farmers experienced risks in farming.
The complexities of various source through which risks are brought into farming is what prompted Harwood, Heinfer, Coble, Perry and Somwaru (1999), Alan et al (2004) and Jani & Parshad (2007) to group agricultural risks under production risks which include weather problems, natural calamities and pest and diseases; market risk to include input and output prices. Furthermore, risks were categorized as technological risks. This is risk that results from the consequences of adopting new technological innovation for agriculture.
These are the risks that results from inadaptability of a particular technological innovations to a particular local situations of the farmers. Institutional risks results from unexpected changes in government regulations that affect farmers’ activities. This is inconsistencies in government agricultural policies that affect farmers negatively. Financial risks develop from fluctuations of interest rates on borrowed capital or cash flow difficulties if there are insufficient fund to pay creditors. Agricultural risks are also classified into social, legal, human, personal and asset risks The occurrence of these risks which are more peculiar to farming makes agriculture to be more risky than any other area of production.
These risks scare many people (especially the youths) away from farming in Nigeria, and Western Agricultural Zone of Kogi State is not exempted. Due to the peculiar risky environment under which the farmers operate, most able bodied youths and adults prefer other jobs than taking up farming as a lifelong vocation. This has resulted in lack of justification in government huge expenditure on agriculture; rural- urban migration of youth; increase in unemployment figure; widespread of okada riders, with consequent amputation of hands and legs; and confinement of farming to the aged and the rural poor.
The consequence of this is that the low educational, financial as well as the aged nature of the rural farmers has contributed to make agriculture and food production unable to cope with the ever increasing population in the nation (Degroot, Hoisington, Mugo and Friesnsen, 2001). These consequently lead to increase in the price of agricultural products. The various effects of agricultural risks have brought about the need to determine the risk management strategies that farmers will need or require to manage these risks.
Risk management according to Patrick (1992) is the process of anticipating possible difficulties and planning to reduce their consequences, and not just reacting to unfavourable events after they occurred. Strategy according to Hornby (2006) is a plan that is intended to achieve a particular purpose. It is the process of planning something or putting a plan into operation in a skillful way. Strategy is a consistent set of measures aiming to influence developments in a specific way (Hooijer, Kljin, Kwadijk and Pedroli, 2002). Hence, risk management strategy is a specific action taken in a skillful way to reduce either the probability of a risk or its consequences or a combination of the two (Samuel 2005). Owing to the risky nature of farming, farmers need risk management strategies in order to succeed in their business. Application of risk management practices will help to reduce the risks that have been hindrances to farmers to produce maximally.
However, it has been observed that farmers have always made use of various means to manage their risks (World Bank, 2005). Therefore, it could not be assumed that farmers have no means or measures of managing their risks because if they had not gotten any means of dealing with these risks there would be no food in the market at all. However the same World Bank (2005) noted that the low productivity witnessed in the agricultural
sector indicated that the risk management strategies farmers have been using could not efficiently deal with the risks they encounter or they require other new strategies in addition to their indigenous practices to mitigate and cope with their risks for maximum productivity.
In view of this, it is expedient that we develop a comprehensive risks management package, taking into cognizance farmers indigenous practices which have been of help to them over the years and the opinions of the extension agents who have been in contact with the latest development in the agricultural sector for us to fashion out an effective risks management strategy that that will help to bring the farmers out of their present situation.
Successful management of agricultural risks thus requires joint effort of the farmers, the extension agents and agricultural researchers. This is because farmers’ rate of adoption and practicability depends on the availability of new technologies; effectiveness of the extension services to create the necessary awareness and guidance essential for successful adoption of new technology (Bitsch, Ferris, Lee, McFadden and Ross, 2007). Extension makes promising modern farming technologies developed at the research stations by the researchers reach the end users (farmers).
The agricultural researchers play a prominent role by studying carefully and trying to discover new facts that will help to improve agricultural practices thereby increasing farmers’ productivity. Agricultural researchers are the people that engages in researches to seek out new practices or strategies that could be of importance to the farmers and at the same time help in managing their risks. This they do by developing improved varieties of crops that can withstand adverse situations such as drought, flood or pest outbreak conditions.
The involvement of extension in risk management focuses on teaching farmers how to apply new technologies and manage their farms to avoid or reduce risks.
They are the link between the farmers and the research institutes. Thus, it is believed that they are conversant with all the latest technologies that emerge from the research centers and those technologies that are adoptable and have yielded positive results in their agricultural zones, then making them capable of giving input to a risk management development plan in a region where the research institutes is not available. They are also involved in helping farmers to decide which risk management strategies is likely to meet their specific requirement; assisting farmers in their choice of risk management practices as well as advising farmers in input procurement and marketing of their products. The extension agents also engage in actual cultivation of crops and rearing of animals for their own personal use.
As a result they are well conversant with the risk inherent in farming and thus would be able to suggest the most appropriate risk management strategy that would suit the situation of farmers in their locality. Therefore the determination of these agricultural risk management strategies needed by farmers will help the agricultural policy makers and the extension agents to tailor their training activities for the farmers towards these needs. Not only will the determination of the risk management strategies reveal farmer needs, it will also help to reveal those strategies that farmers have been using to manage their risk over the years and which have been sustaining them. These can then be refined to meet the present needs of the farmers as well as incorporate them into the school syllabus to be taught to the youths. This will help to reduce youth apathy towards farming thereby justifying government huge expenditure on agriculture.
The risk management strategies that farmers in a particular area would need may vary according to the sources of risks. This is because risks facing farmers arise from different sources while the prominent source of risk in an area will depend on the environmental and socio-economic condition of such area. Then their risk management needs will vary or differ based on their goals, attitudes as well as their personal or financial situations (Patrick, 1992).It is in recognition of this difference in risks management needs of farmers that informs the need to study the needed agricultural risks management strategies in Western Agricultural Zone of Kogi State.
PROJECT TOPIC- AGRICULTURAL RISKS MANAGEMENT STRATEGIES NEEDED BY FARMERS IN WESTERN AGRICULTURAL ZONE OF KOGI STATE
Statement of the Problem
Farming is the main occupation and the major source of income of the majority of the rural dwellers of Western Agricultural Zone of Kogi State. These farmers are threatened by various types of loses which makes their work risky. They have little or no control over these risks. Thus, their only means of sustenance is threatened. This situation was noted by Hazell (1992) that agricultural risks seem to be prevalent throughout the world; however, they are particularly burdensome to farmers in developing countries, Nigeria and Kogi state inclusive.
It has also been observed that Kogi state government is making frantic effort to boost agricultural production in the state through various incentives to farming like provision of agricultural loans, procurement of agricultural equipments for hire and subsidy on fertilizer. It is however saddening to note that more people are withdrawing from farming while those that obtained loan from government in the name of farming are diverting it into other businesses which they believe are more rewarding.
Moreover, the rate at which agile youths are running away from farming in spite of the high rate of unemployment that pervades the state is alarming. Most youth migrate to urban areas in search of white collar job while those that remain in the rural areas prefer “okada” riding to farming. These youths constitute themselves into touts and lawless individuals who are seen as security risks to the society (Nebechukwu, 2005). It is also saddening to note that most graduates of agricultural education from colleges of education and graduates of agricultural sciences from the university or colleges of agriculture are never found anywhere engaging in practical agricultural production or farming only.
Apart from those that neglected farming, the productivity of those that are engaged in farming which are mostly aged rural farmers is very low and unable to cope with the present
population of 3278487 people in Kogi State (National Population Commission, 2006). Jalloh (2007) observed that the sub-Saharan Africa (Nigeria inclusive) since 1965 has an average agricultural growth rate of 1.7% -1.9% per annum while population growth rate has increased from 2.9%per annum to about 3.1% per annum. Osinem (2005) supported this view by saying that with rapid population growth in many parts of the world, agriculture is not fulfilling its vital function. This has resulted to high cost of food in the market.
Although it has been argued that farmers have their local ways of managing their risks (World Bank, 2005), the recent changes in climatic conditions which have resulted in unpredictable outbreaks of floods, drought, pests and diseases (Pedrick, 2008); coupled with the current global economic downturn has presented new risks which would require new strategies or an improvement over the previous ones to deal with. These present the need to seek for appropriate agricultural risks management strategies to deal with the new breeds of problems facing agriculture.
In view of the above, there is a need to seek for strategies that will help to minimize farmer’s vulnerability to risks, encourage youths to take up farming and increase farmers’ productivity. Hence the need to identify agricultural risk management strategies that will suite the farmers in Western Agricultural Zone of Kogi state. These needs if identified will help to deal with the risks that are peculiar to this zone and other various risks facing farmers and help farmers to produce maximally.
Purpose of the Study
The major purpose of the study is to determine the agricultural risks management strategies needed by farmers in the Western Agricultural Zone of Kogi State. Specifically, the study intended to:
1-determine the strategies needed by farmers to manage risks of climate changes.
2 -determine the strategies farmers require to manage risks of pest and diseases.
3 -determine the strategies needed by farmers to manage market risks.
4 -identify the strategies they need to deal with their social risks
5 -determine the strategies that farmers require to cope with the effects of a risk situation.
Significance of the Study
The study is significant in many ways to various groups of people. These are the farmers, extension agents, the insurance companies, the curriculum planners and thegovernment.
Foremost, the study will help to create awareness on the part of the farmers about the level of risks they are exposed to and help them to see the need for effective agricultural risk management strategies. The outcome of the study will equip them with the needed risk management strategies to manage their risks.
The study will be beneficial to the extension agent by motivating them to seek out for more effective risk management strategies and communicate them to farmers for effective productivity. Also, the study will sensitize the insurance companies to the plight of rural farmers thereby motivating them to reduce insurance premiums, educate rural farmers about agricultural insurance and encouraging rural farmers to patronize formal insurance. It will also help the moribund Nigeria Agricultural Insurance Company to awake to its responsibility by impressing on them to the risks faced by farmers.
The study will also benefit the curriculum planners by exposing them to the need to include the principles and practices of agricultural risk management into the study of agriculture in schools and colleges. This will help to reduce youth hatred for agriculture, thereby encouraging them to take up farming. It will also help to reduce youth unemployment and rural urban drift.