RESOURCE PRODUCTIVITY AND EFFICIENCY OF
SMALL-SCALE GROUNDNUT FARMERS IN TARABA
The study investigated resource productivity and efficiency of small scale groundnut farmers in Taraba State, Nigeria. The focus was on socio-economic attributes of the small scale groundnut farmers and the effects on their efficiency, determination of technical, allocative and economic efficiency of the respondents, profitability of groundnut production, and factors that influence production costs and problems of
groundnut production. A total of 270 small-scale groundnut farmers were selected in 9 local government areas of the State. Structured questionnaire and interview schedule were used as instruments for data collection.
Types of data collected were those on socio-economic characteristics, production, costs of production, yield and sales and problems of groundnut farmers within the local government areas. Data analysis was achieved by the use of descriptive and inferential statistics; Stochastic Frontier Analysis (SFA), Stochastic Frontier Cost Function, profit (⌅) function and gross margin analysis. The mean scores for literacy level, household size, farming experience and farm size were 9 years, 5 persons, 9 years and 1.60ha, respectively. The Maximum Likelihood Estimates (MLE) result of the stochastic frontier production function (SFPF) for groundnut farmers indicated the presence of inefficiency.
Farm size and other agrochemical were significant at 1% Level of Probability (LOP), seed was significant at 5% LOP and family labour was significant at 10% LOP. In the efficiency effects, farming experience and household size were both significant at 1% LOP; extension contact and literacy level were significant at 5% LOP. The mean Technical Efficiency (TE) was 77%. The MLE of stochastic cost function for groundnut production also indicated the presence of inefficiency.
The cost of seeds, fertilizer, family labour and ploughing were statistically significant at varying degrees of probability implying they
were important determinants of the total cost associated with the production of groundnut. Farming experience, literacy level and household size were significant and positively related to costs efficiency among the sampled farmers. The mean allocative efficiency was 0.695 (70%) indicating that the respondents were not allocatively efficient. Mean economic efficiency was 0.54 (54%) implied that, the sampled groundnut farmers were not economically efficient in the use of productive resources.
The gross margin was N47, 265.16 per hectare and return on investment was N0.29. Cost of seeds, transport, labour (family and hired) and storage significantly (P<0.01) affected profit margin. Major constraints identified included pests and diseases infestation (19.10%), lack of storage facilities (13.57%), inadequate research and extension services (10.86%), low price (10.77%), and inadequate credit facilities (9.50%). Remedial measures such as: loans and other credit facilities be given to farmers at reduced interest rate, farmers be encouraged to form cooperative groups, revitalization and prioritizing funding of
1.1 Background of the Study
Groundnut (Arachis hypogaea Linnaeus) commonly called poor man’s nut (Amiruzzanman and Shahjahan, 2003; Beghin, Diop, Matthey and Sewadah, 2003) is a member of the genus Arachis in the family leguminosae (fabacaea). Other members of this family include (cowpea), (soybean), (pigeon pea) and (melon). Groundnut originated from Latin America and the Portuguese were responsible for its introduction into West Africa from Brazil in the 16th century (Abalu & Etuk, 1986; Hamidu, Kudi & Mohammed, 2006).
The crop is now widely cultivated throughout the tropical, sub-tropical and warm temperate areas (Hamidu et al., 2006). According to Ntare, Waliyar, Ramouch, Masters & Ndejunga, (2005), the production of groundnut in Nigeria started around 1912. This was in response to the high world prices, hence, made Nigeria to be prominent among the exporter of groundnut and took the lead as the largest producer and exporter of groundnut in the sixties.
Nigeria reached a peak production of 1.6 million metric tons in 1973, but production fell by almost half of the 1973 figures in less than a decade due to a combination of two important factors (Ntare et al., 2005). First the drought of 1974/75 growing season accompanied by aphid infestation which wiped out more than 750,000 hectares of groundnut fields. Secondly, the coincidence of oil boom in Nigeria about the same time (Ntare et al., 2005).
Groundnut is grown in nearly 100 countries in the world. Major groundnut producers are China, India, Nigeria, USA, Indonesia and Sudan. Developing countries account for 96% (26 million ha) of the global groundnut area with 92% global production (Food and Agricultural Organisation [FAO], 2004). Ashley (1993) revealed that Nigeria unshelled nut is estimated about 2.6 metric tons annually. Rainfall of 500mm-1000mm with temperature range of 250C to 300C will allow for commercial productivity (Weiss, 2000; Department of Agriculture [DOA], 2008). The productivity of groundnut is higher in well drained soils with pH between 6.0 – 6.5 particularly sandy loam soil, as it is light, thus, helps for easy penetration of pegs and their development, hence, their harvesting (Gibbon & Pains, 1985; Simonds, 1976;
Yayock, 1984; Ambrose et al., 1986; Larinde, 1999).
Groundnut is indeed one of the commercial crops in Nigeria which accounted for 70 percent of the total Nigeria’s export earning between 1956 and 1967, but declined between 1968 and 1980’s (National Planning Commission/Raw Material Research Development Council) (NPC/RMRDC, 2002). Despite the availability of abundant land and human resources in Nigeria, yield per hectare from groundnut production has been declining over the years and there is a shortfall of over 90 percent of groundnut requirement by the companies involved in processing as revealed by (RMRDC, 2004). The trend could be as result of either the small-scale groundnut farmers are resource poor or are inefficient in resource (inputs) allocation and utilization, since the output of groundnut in the study area did not commiserate with total hecterages put under cultivation as can be seen in Table 1.1 (Trend in groundnut output in Taraba State, Nigeria between 2002-2012) Taraba Agricultural Development Programme (TADP, 2013).
Table 1.1: Trend in Groundnut Output in Taraba State, Nigeria (2002 – 2012)
Year Area cultivated by small holder farmers in (’000HA) Production in Mt
Source: Project Monitoring and Evaluation Unit. TADP Jalingo, 2013 Nigeria agriculture is dominated by the small-scale farmers who are low income earners and provide 2/3 (two-thirds) of the total food production in the country (Usman, 2006) but productivity of food crops output remained low (Nweze, 2002). As a result the rural income is lower today than it was two decades ago and agricultural exports are
almost non-existent, also production efficiency techniques have remained rudimentary for the main cropping system despite years of works on technology generation (Federal Ministry of Agricultural and Rural Development [FMARD], 2001).
This wide food deficit has been attributed to resource productivity and efficiency (Onyenwaku, 1987; Okuneye, 1988). The aftermath of this trend has always been gross inability to attain self sufficiency in food production as the sector becomes dormant and neglected (Argbokan, 2001). Ntare (2005) stated that small-scale farmers’ access to new crop varieties has long been recognized as a critical step for increasing agricultural productivity in subsaharan Africa. He opined that, adoption of improved varieties that resist pests, diseases and drought can often vary in yield even when farmers are unable to adopt more costly inputs such as agrochemicals. Freeman et al., (1999) asserted that small-holders groundnut farmers are faced with lack of resources or access to currently available technology, as a result, the authors observed that, low producers’ prices and limited modeling opportunities reduced incentives for small-scale groundnut farmers to invest in productivity enhancing technologies such as improved seeds, fertilizer and pesticides.
Awoke (2003) identified lack of improved capital inputs, collateral and high interest rates as some of the major obstacles to groundnut production efficiency. Effective planning should aim at imparting into farmers certain knowledge to match the technical aspect of production, so that they would minimize the input of scare and expensive resources consistent with obtaining the level of output beyond which no further profit is possible, this would involve the efficient management of productive resources aside from the target crop (Awoke, 2003). The predominant reliance in traditional methods of farming by Nigeria small-scale farmers for substantial part of our agricultural production activities has been partly responsible for present low level production as against our increasing population (Ohikere, 2010). The author said that the need for improved food production stemmed from the fact that, it is, the first way to match conspicuous consumption with conspicuous production in view of the ever increasing population with rising food demand.
Food crops production efficiency is vital to improvement of the agricultural sector productivity if resources available are judiciously used. Many resources are employed by the small-scale farmers at the farm-level with attendant low output. Since increased productivity is directly related to production efficiency. It is therefore important to know how productivity of the small-scale groundnut farmers will be raised
in order to help them reduce inefficiency. Efficiency measurement is very important for monitoring productivity growth. Thus, it ascertains the extent to which if possible to increase productivity using present resource base and available technology and this can help in policy formulation on the reduction of inefficiencies visa-vis groundnut production efficiency.
RESOURCE PRODUCTIVITY AND EFFICIENCY OF
SMALL-SCALE GROUNDNUT FARMERS IN TARABA
1.2 Statement of Problem
Groundnut is the 13th most important food crop, 4th in oil seed crop and also 3rd most important of the world source of vegetable protein after soybean, rapeseed and cotton seed (FAO, 2006; Foreign Agricultural Service [FAS], 2010). The seed (kernel) contains 40-50% fats, 20-50% protein and 10-20% carbohydrates (FAO, 2006). About 80% of edible groundnuts are roasted for further processing into snacks food, and peanut butter (GSP NEWS, 2004).
It can be crushed for oil and groundnut cake (animals feeds) (Beghin et al., 2003). Groundnut is also good source of minerals such as phosphorus (P), calcium (Ca), magnesium (Mg), and potassium (K), as well as vitamins E, K and B (RMRDC, 2004). Production in Africa has been estimated at about 2.6 metric tons annually from a land area of approximately 2.5 million hectares with Nigeria inclusive. It is estimated also, that, 78 percent of land area sown to groundnut is in various crop association (Okigbo & Greenland, 1976; Nnadi & Haque, 2003). Although food security remains a major concern due to the subsistence nature of the country’s agriculture as asserted by Nwafor (2008), the sector employs more than 70 percent of the labour force, accounts for over 70 percent of the non-oil export and most importantly provides 80 percent of the food needs of the country (Faburso and Agbonlahor, 2007; CNB, 2009).
Nigeria population which grows at about 3.2 percent per annum with food production at about 2.0 percent is not keeping pace with its population (FAO, 2005; NBS, 2011). Food production process requires resources which when used judiciously could lead to high productivity and profitability. These resources could be natural or manmade: man-made resources include: labour, capital or entrepreneurship, which are
supplied and influenced by man (Olayide & Heady, 1982; Oyekele, Bolaji and Olowa, 2009).In order to ameliorate the dwindling and not too impressive performance of agricultural sector in terms of the gap between food supply and demand owing to