PROFITABILITY AND TECHNICAL EFFICIENCY ANALYSIS OF RICE PRODUCTION IN ESAN CENTRAL AND NORTH EAST LOCAL GOVERNMENT AREA OF EDO STATE
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PROFITABILITY AND TECHNICAL EFFICIENCY ANALYSIS OF RICE
PRODUCTION IN ESAN CENTRAL AND NORTH EAST LOCAL GOVERNMENT AREA OF EDO STATE
PROFITABILITY AND TECHNICAL EFFICIENCY ANALYSIS OF RICE
PRODUCTION IN ESAN CENTRAL AND NORTH EAST LOCAL GOVERNMENT AREA OF EDO STATE
TABLE OF CONTENT
Title page-------i
Certification--------ii
Dedication--------iii
Acknowledgement-------iv
Table of content-------v
List of Tables--------viii
Abstract--------x
CHAPTER ONE
1.0Introduction-------1
1.1Rice Grain Quality Indicators-----2
1.2Origin of Rice-------4
1.3Introduction of Rice into Africa---- 5
1.4Statement of Problem------7
1.5Objective of the Study-----8
1.6Justification of the Study-----8
CHAPTER TWO
2.0Literature Review------10
2.1Concept of Efficiency------10
2.2Technical Efficiency ------10
2.3Cost Measurement/Production Cost----11
2.4Rice-Based Production System----14
2.5Rice Farming System------16
2.6Irrigation Development-----17
2.7Rice Production in Nigeria -----18
CHAPTER THREE
3.0Methodology-------20
3.1Area of the Scope of Study-----20
3.2Data Collection------20
3.3Data Analysis-------21
3.4Limitation of the Study-----23
CHAPTER FOUR
4.0Results and Discussion-----24
4.1Socio-Economic Characteristics of Respondents--24
4.2Input Information------29
4.3Information to Farmers-----32
4.4Output Information ------32
4.4.1Unit of Sales of rice of Respondents----32
4.4.2Place of Sales of Output------33
4.4.3Return to Scale Analysis-----38
4.5Cost and Returns------40
4.5.1Costs--------40
4.5.2Returns and Revenue------41
4.5.3Gross Margin Analysis-----41
4.5.4Profitability Analysis------41
4.6Constraints to Rice Production----42
CHAPTER FIVE
5.0Summary, Conclusion and Recommendation---44
5.1Summary-------44
5.2Conclusion-------46
5.3Recommendation------47
Reference--------48
Questionnaire--------49
LIST OF TABLES
Table 1: Rice import into Nigeria: 1995-2004 (‘000
tonnes)--19
Table 2: Distribution by respondents by sex----24
Table 3: Education background of respondents---25
Table 4: Age distribution of respondents -----26
Table 5: Marital status of respondents----27
Table 6: Occupation of the respondents ----27
Table 7: Household distribution of respondents---28
Table 8: Farming experience of respondents----29
Table 9: Source of farmland of respondents ----29
Table 10: Farm size distribution of respondents---30
Table 11: Planting material sources-----31
Table 12: Source of farm labour of respondents---31
Table 13: Visit by Extension Agents Distribution---32
Table 14: Units of Sales Distribution-----33
Table 15: Output Distribution of respondents ---33
Table 16: Estimated Production Function for the OLS and
MLE-34
Table 17: Distribution of Technical efficiency range for Rice
Farmers -38
Table 18: Return to Scale for Rice Production---39
Table 19: Estimated Cost of Production per hectare per
production season 40
ABSTRACT’
This research was designed to access the Profitability and
Technical Efficiency Analysis of Rice Production in Esan Central and North East
Local Government Areas of Edo State with a specific objective of examine the
socio-economic characteristics of the farmers, determine the profitability of
rice in the stud area.
The study used information gathered from One hundred and
eighty (180) copies of a structured questionnaires were administered to rice
farmers in the study area. Data so collected were analyzed using descriptive
statistical instruments like means. The result gave a gross margin of n46,
445.03 per ha. Return on investment (ROI) of 1.03.
This implies that rice production is a profitability and
viable enterprise. It is therefore recommended that inputs such as fertilizers,
herbicide, pesticides (used to control birds and rodents) be subsidized to rice
farmers to help boost indigenous rice production. Some factors of production
that were identified are: tractors, cutlasses, hoes, planting materials, cost
of land preparation etc. While the major problems were inadequate finance,
birds and rodents attack, insufficient rainfall, inadequate storage facility
etc.
CHAPTER ONE
INTRODUCTION
Rice is a staple food for more than 60 percent of the world’s
population (Richardson and Stubbs, 1978). Rice has become a staple food crop of
considerable strategic importance in many rapidly growing African countries
where consumption among the urban poor household has increased substantially
(WARDA, 1993).
Cultivated rice is designated as either oryza sativa or oryza
glabberima, oryza sativa is the predominant species. “Oryza glabbenma is grown
only in Africa” on a limited scale.
The rapid rise in rice production in the years, following
world was 11, mainly in Asia, stemmed from expanded irrigation areas, the
increased use of fertilizers, effective control of pests, double rice cropping,
and the widespread adoption of improved genetic materials. The combined use of
nitrogen fertilizers and use of high-yielding varieties has made possible the
expression of high yield in irrigated areas. Varieties of short growth duration
which are insensitive to the photoperiod have allowed year round planting and
multiple cropping.
The adoption of semi-dwaft high yield varieties triggered the
beginning in 1967: Chinese farmers also turned to the utilization of the
semi-dwaft varieties. The development of hybrid rice in China since the 1970s
has set off a second “Green Revolution” in that area.
New genetic information and genetic diversity provide the
foundation for more efficient breeding programs for rice production. It
remained for the simply inherited recessive gene (Sdi) in the Chinese
semi-dwaft rice to provide rice breeders with the impetus to achieve further
progress in rice breeding.
1.1RICE GRAIN QUALITY INDICATORS
The most important factors that plant breeders consider in
developing new rice varieties are grain quality and yield. The term “grain
quality” has many meanings and is perceived differently defending on end use,
field of interest, specialization and ethnic importance as a quality
characteristic, rice millers emphasize processing quality: and consumers demand
a widely divergent array of cooking and eating qualities.
Quality in rice may be categorized into four broad areas:
Milling quality
Cooking and processing quality
Nutritive quality
Specific standards for cleanliness, soundness and purity.
All four (4) categories are important in judging the
suitability of rice for a specific use. The quality characteristics desired
vary considerably, being ultimately related to final consumer acceptance of
each rice product.
Characteristics that influence rice quality include those
under genetic control and those independent of genetic control, such as purity
and cleanliness. These latter characteristics are primarily a function of
handling and storage and as such are described thoroughly in United States
standards for rice and in the rice inspection handbook.
A major factor influencing rice quality is the environment in
which the plants are grown. Once a new variety is released for commercial production,
it spreads to wherever it can be produced advantageously compared to currently
grown varieties. Consequently, before released, new varieties are tested
agronomical and for quality over their likely production area.
Tests are carried out in rice performance nurseries in each
rice producing state. These trials permit evaluating quality characteristics of
new varieties over wide ranges of environmental influence such as soil, climate
and cultural practices.
Characteristics Influencing Qualities in Rice Include:
Hull and pericarp colour
Grain-shape, weight, uniformity, and general appearance
Milling cut turn.
Kernel, chalkiness, translucency and colour and cooking,
eating and processing characteristics.
1.2ORIGIN OF RICE
Rice has been cultivated for such countless ages that it’s
base their evidence must always be a matter for conjecture. Botanists base
their evidence of the origin of rice largely on the habitats the wild species.
It is presumed that the cultivated species have developed from certain of the
wild rice.
The genus oryza comprises twenty five species distributed
through tropical and subtropical regions of Asia, Africa, Central and South
American and Australia. Both diploid (2n=24) and tetraploid species occur, he
diploids being more numerous.
There are only two cultivated species, oryza glabberima and
oryza sativa linn. Oryza glabbermma is conformed to West Africa where it is an
upland crop but is being replaced by oryza sativa. Morphological there are only
small differences between these species, mainly in ugule size and glume
pubescence, but oryza glabberima always has a red pericarp and hybrids between
oryza glaberrima and oryza sativa are sterile. Oryza glaberrima is not
confirmed to West Africa.
According to Chaudraratna (1964), the center of origin of
oryza sativa linn in Southeast Asia, particularly India and Indo-China, where
richest diversity of cultivated forms has been recorded. It spread northwards
in Asia before the later movement, it also spread south and East through the
Maby Archipelago with the flow of human culture.
1.3INTRODUCTION OF RICE INTO AFRICAOryza stapfil Rosecher,
and oryza glaberrima steud are presumed to have been cultivated on the margins
of the Neolithic Sahara. The historian Ibu Batouta (AD 1350) mentions the
existence of rice in Nigeria, which certainly is oryza glaberrima. Oryza
glaberrima was introduced into Northern Nigeria in the 16th Century.
The cultivation of oryza sativa linn in Nigeria was about
1890 when upland varieties were introduced to the high forest zone in Western
Nigeria. Shallow swamp varieties from Guyana and srilanka were established in
the smaller tributaries of several rivers where they rapidly replaced the swamp
varieties of red rice (oryza glaberrima), their most extensively grown. Oryza
glaberrima is now mostly confirmed to the fat North of Nigeria and to Sierra
Leone.
Red rice (oryza glabberrima) which probably originated in the
middle Niger Delta some 3,500 years ago is gradually being replaced in Africa
by oryza sativa. The date and mode of introduction of oryza sativa to West
Africa is unknown. It has been suggested that it was introduced by Portuguese
traders who visited the coastal regions, but is equally possible that it came
across African by the caravan desert routes; it may have been already in
cultivation in West Africa when the first Portuguese arrived (Jordan, 1965).
The significance of rice is shown in it’s widespread use as a
staple food by more than\half of the world’s population. Millions of people in
Asia subsist almost entirely on rice. Most countries rely mostly entirely on
domestic production to feed their populations with only about 4% of the world’s
rice production reaching the international market. More than 90%of World rice
is produced in Asia (FAO, 1989).
Rice is widely consumed in Nigeria today and there is hardly
any where in the world here it is not utilized in one form or other. In
Nigeria, rice is the one of the few food items whose consumption has no
cultural, religions, ethnic or geographical boundary (Udoh, 2003). But
fortunately, the cultivation and production of this highly consumed priced and
very important food crop is not encouraging, this may be due to the fact that
production of rice in the country is carried out by small scale farmers, who
can barely meet the demand for it. The problem, of low level of production
amounting small farmers, who can barely meet the demand for it. The problem of
low level of production amounting small scale farmers can be attributed to the
poor use of locative and economic efficiencies.
There is need therefore, to look into the various ways to
increase production, cost efficiency, to meet the overwhelming demand for rice
in the country since an increase in agricultural production of rice is
invariable linked to farm profits.
1.4 STATEMENT OF PROBLEM
In Nigeria, rice has become a major staple food crop in most
homes today and unfortunately the domestic production of the product has not
been met with the demand for it. Which has expressed itself in the food
shortages experienced in the country recently? (CBN, 2003).
Esan Central and North East Local Government Area of Edo
State is one of the areas where rice is grown in Edo State, Nigeria. The area
is blessed with natural requirements (in terms of soil, rainfall and other
factors) for rice production which when properly tapped can lead to an increase
in rice production and source of employment to the unemployed.
The problem of socio-economic changes such as population
explosion, industrialization and urbanization call for a sufficient and
wholesome food supply and where possible in convenient forms. Infact this is a
challenge to Nigeria farmers, researchers and members of the public.
Rice farmers in Esan Central and North East are mainly
peasant farmers who depend entirely on traditional farming techniques for the
production and their standard of living not present as through the enterprise
is viable.
This study will provide answer to the following questions:
What are the socio-economic characteristics of respondent in
the study area?
Are the farmers able to efficiently hand their input costs?
What are the factors that determine the cost efficiency of
production of the farmers in the study area?
What is the farmers cost efficiency level in the study area?
What are the socio-economic factors affecting the cost
efficiency of farmers in the study area
1.5OBJECTIVES OF THE STUDY
The broad objective of the study is to estimate the
portability and cost efficiency of rice production in Esan Central and North
East Local Government Areas of Edo State. The specific objectives are to:
Examine the socio-economic characteristics of respondent in
the study area.
Determine the profitability of rice in the study area
Estimate the cost efficiency of rice farmers in the study
area.
Ascertain if there is any socio-economic factor that affects
the technical inefficiency of farmers.
Determine any other constraints the farmers are experiencing.
1.6 JUSTIFICATION OF THE STUDY
Food and agricultural organization (FAO, 1996) record has it
that the world population is increasing an alarming rate, and it is expected to
increase in the next decade by 88 million per annum with this record so far
it’s estimated that more than 60 millions of this population will be absorbed
in cities and towns, globally there will be an increase in demand for major
food crops and rice. This overwhelming increase in demand for major food crops
and rice. This overwhelming increase in demand will definitely lead to an
overwhelming increase in price of rice.
There is need therefore the need to look into the cost
efficiency and profitability of rice production by farmer in the study area.
The empirical evidence from this study will add to the
already wide stock of knowledge about rice production and also help policy
marker in policy formulation concerning rice production and also potential
investors on how to go about investing in rice productions.
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