Economic Efficiency of Resource Use in Groundnut Production in Adamawa State of Nigeria

Transcription

1 World Journal of Agricultural Sciences 4 (S): , 008 ISSN IDOSI Publications, 008 Economic Efficiency of Resource Use in Groundnut Production in Adamawa State of Nigeria V.B. Taru, I.Z. Kyagya, S.I. Mshelia and E.F. Adebayo 1 Post Primary Schools Management Board Yola, Adamawa State, Nigeria Department of Agricultural Services, Ministry of Agric, Yola, Adamawa State 3 Department of Agricultural Economics and Extension, Federal University of Technology Yola, Adamawa State, Nigeria Abstract: Groundnut is e 13 most important food crop of e world. It is e world s 4 most important source rd of edible oil and 3 most important source of vegetable protein. The study examines e economic efficiency of resource use in groundnut production in Michika local government area of Adamawa State. It focuses on e relationship between groundnut out and e various inputs used by groundnut farmers, elasticity and economic efficiency of resource used in production of groundnut. Primary data were basically used wi e aid of structured questionnaires administered on 143 farmers using a simple random technique. The regression analysis indicated at e cobb- Douglas function gave e best fit. The R was highly significant at 1% level wi e value of 0.784%. This implies at 78.84% of e total variations in groundnut yield is explained by combine influence of all e explanatory variables (farm inputs) in e regression equation. Three out of e eight independent variables were significant at 1% level, ese were farm size (X 3), seed (x 5) and labour input (X 8) more so ey positively affect e groundnut indicating at e more e farm size, quantity of seed and labour used, e more output. Economic efficiency of resource used showed e seed and labour were underutilized, while fertilizer and agrochemicals were over utilized. Key words: Groundnut Economic Efficiency Resource use Production INTRODUCTION The rainfall should be well distributed during e flowering and pegging of e crop. The total amount Groundnut Arachis hypogea originated from Latin required for pre-sowing operations in 100mm, for America and was introduced into west Africa by sowing is 150mm and for flowering and pod development Portuguese traders in e 16 centaury [1-4]. The origin of an evenly distributed rainfall of is required. is crop dates back to 350 BC [5]. Who also reported Groundnut cannot wistand frost, long as severe at, e first probable domestication of groundnut took drought or water stagnation. However, e crop does best place in e valley of e panama and Paraguay River in sandy loam and loamy soils and in e black soils wi systems in e grain Chaco area of Sou America and good drainage. Heavy and sticky clays are not suitable for en moves to e Nor America rough slave trade. groundnut cultivation because e pod development is Misari et al. [6] reported at agro ecological hampered in ese soils [7]. zone of groundnut production are e Sahel (1 to Groundnut, is one of e most popular commercial 13 N, Sudan (10 to 13 N), Norern half of e guinea crop in Nigeria which accounted for 70% of e total savanna (6 to 8 N). major groundnut zones are e Sudan Nigeria export earning between 1956 and 1967 but and norern Guinea Savanna where e soil and agro declined between 1955 and mid 1980s due to combine climatogical conditions are favorable. Groundnut requires effect of drought and disease [6]. During is period, 500 to 1600mm of rainfall, which may last for 70 to groundnut area in Nigeria declined to almost half 00 days of rainy season in e Sudan savanna. It also of e existing level of 1.7 million hectares. Groundnut requires well-drained light colored loosed friable sandy production in Nigeria in 00 was mt [7]. loam soil, optimum moisture in pod zone and mean daily NPC. [9] stated at groundnut is used for making temperature of about 30. margarine, candy, salted groundnut, crakers/cookies, Corresponding Auor: Dr. E.F. Adebayo, Department of Agricultural Economics and Extension, Federal University of Technology Yola, Adamawa State, Nigeria 896

2 World J. Agric. Sci., 4 (S): , 008 salad oils and soaps. It was however reported at almost Hypoesis: every part of groundnut, plant is used in some way. Ho 1: There is no relationship between e output and According to [10] over 330 products can be input used in groundnut production. commercially produced from groundnut and jobs can be Ho : There is no relationship between socio economic directly created from massive groundnut production wi variables and groundnut output. small improvement in e technology and e use of impaired variety wi corresponding increase of cultivated Data collection: Purposive, multistage and simple hectares. random techniques were adopted for e study. These Agricultural sector has e mainstay of Nigeria s involved e choice of Michika local government Area in economy employing 70% of e active labour force and e souern zone of Adamawa State, is followed by contribution significantly to e country s GDP and selection of 4 districts from e eight districts, wards foreign earnings. In 1960, 1970 and 1980, it contributed each from e selected districts, ree villages each from 55.0, and 18% to GDP respectively. Despite e selected wards and 143 groundnut farmers from e e factors at continuous to constrain agricultural villages. Data were collected on production inputs, activities such as poor rural infrastructure, poor fertilizer outputs, inputs and output prices and socioeconomic distribution and high cost of farm inputs, e sector, still characteristics of e farmers for e year 005 cropping remain important in e economy. Its contribution to GDP season. in 1996, 1997 and 1999 stood at 39%, 339.4% and 40.40%, respectively [11], Groundnut had relied primarily on export Data analysis: Multiple regression was used to develop of agricultural commodities as source of bo internal and production function for groundnut production and was foreign exchange before e oil boom era. Before e world used to measure e efficiency of resources use. The war 11, Nigeria s groundnut figured prominently in world implicit form of e model is as follows; trade accounting for 9% of Africa export and 1% of e world export. In e 1950s, Nigeria contributed 50% of e Y= f(x, 1 X, X, 3 X, 4 X, 5 X, 6 X, 7 X, 8 U) i African export and 30% of e world export. Nigeria produces 41% of e total groundnut production in West Where, Y = groundnut output ( in 100kg of shelled Africa [1]. groundnut) Misari, [13] attributed e decline in groundnut X 1 = Age of farmers ( in Years) production to e discovery of petroleum in e souern X = Family size part of Nigeria, groundnut rosette epidemic, drought and X 3= Farm size (Ha) lack of organized inputs and marketing. X 4 = Farming experience in years The persistent decline in groundnut production over X 5 = Quantity of seed used (kg) e decline caused Nigeria Government great concern and X 6 = Quantity of fertilizer (kg) has devised various means of revitalizing e production X 7= Quantity of agrochemical used (in kg) rough research for impaired yields. X 8 = Labour input (in man days) Despite is numerous crop improvement practices b 0 = Constant term and vast resources of land and labor as reported by [9], b1- b 8Regression coefficient to be estimated ere seems to be inadequate supply of groundnut to U i = Error term. meet e demand of e teeming population in Adamawa State. Population is mainly undertaken by small holders Different functions, linear, semi-log, double-log and for subsistence, using traditional meods and employing exponential were tried and e double log (Cobb-Douglas) low yielding variety wi low yield per hectare per head. was chosen for e analysis based on goodness of fit As a result, ere is need to reverse e foregoing (economic, econometric and statistical criteria). The model scenario wi a view to improving e productivity and was explicitly expressed as follows. efficiency of resource use among groundnut farmers rough e investigation of e nature of productivity LnY = lnb o + b1lnx 1 + blnx + b3lnx 3 + b4lnx 4 + b5lnx 5 + and efficiency in eir production. The purpose of b6lnx 6 + b7lnx 7 + b8lnx 8+ UI is study is erefore to estimate e production function for groundnut production and analyze resource The apriori expectation was at e coefficient use efficiency in groundnut production in e study area. of X1-X8 would be positive. 897

3 World J. Agric. Sci., 4 (S): , 008 Elasticity of production: Elasticity of production is e togeer to produce output. The selection of lead measure of response of output to changes in e variable equation was based on e comparison of coefficient of input (Olukosi & Ogunbile, 1989). Based on e function multiple determination (R ), e apriori expectation, e of best fit, e elasticity of various inputs was determined magnitude of standard error of e estimated parameter by is formula. and statistical significance of e estimated regression coefficient. dy/dxi * X i/y1 The double-log had e best and was selected as e lead equation for e analysis of input- output where Y is e groundnut output relationship in e groundnut production. The lead x s are e various input used in production equation is us presented as; X, Y are e mean average of input and output All e coefficients except e coefficient associated respectively. wi family size (X ) and farming experience (X ) 1 bore Since e Cobb-Douglas production function gave apriori signs. The level of groundnut output is e best fit, e regression coefficient are still e expected to vary positively wi farm size, quantity of elasticities. fertilizer applied, quantity of seed planted, quantity of agrochemical applied, labour input, farming experience, Resource efficiency: The estimated coefficients were family size and age of farmers. About 78.40% of e used to compute e MVP and its ratio (r) wi MFC used variations in yield of groundnut output was explained by to determine e economic efficiency of resource used. ee specified factor inputs as indicated by e R. The model was estimated as follows The coefficient of farm size (X 3) was positive and significant at 1%. The positive coefficient of e farm size r = MVP/MFC suggests at a unit increase in e variable in groundnut production when oer explanatory variables are held Where, r = efficiency ratio constant is consistent wi increased output level. MVP = marginal value product of variable inputs This in consonance wi e apriori expectation. Ceteris MFC = marginal factor cost (price per unit inputs) paribus, increase in farm size means at more inputs would be utilized and consequently more output Based on economic eory, a firm maximizes profits expected. The significance of farm size highlights e wi regards to resource use when e ratio of e importance of is factor in peasant agriculture where marginal return to e opportunity cost is one. The value e commonest mode of production is extensive, as are interpreted us, opposed to intensive pattern. The coefficient of seed input (X 5) was found to be If r is <1; resource is excessively used or over positive and significance at 1%, ereby disposing e utilized hence decreasing e quantity use of at hypoesis of no relationship between e input and resource increases profits. output in production. If r > 1; resource is under used or being underutilized The positive value of seed coefficient is in line wi hence increasing its rate of use will increase profit e expected sign in groundnut production. Oer ings level. being equal,, higher seed rate in kg/ha implies greater If r = 1; it shows e resource is efficiently used, at number of crops stands peer hectare and consequently is optimum utilization of resource hence e point of higher yield, except where ere is over- crowding leading profit maximization (Olukosi & Ogunbile, 1989) to competition for nutrients and low yields. The coefficient of labour (X 8) was positive and RESULTS AND DISCUSSION significant at 1% and disproves e hypoesis of no relationship between inputs and outputs. The positive Four functional forms were fitted into e model. coefficient is in agreement wi hypoesized expected These were linear, semi-log, double-log and exponential. sign and implies at as e amount of labour increases, The result is summarized in Table 3. e four functional e output also increases,. This type of relationship is forms of production function were employed in e however expected where e available labour is efficiently analysis of input-output data to measure e contribution managed along wi oer resources to avoid redundancy of each input to production, when e inputs interacted and diminishing return to labour. 898

4 World J. Agric. Sci., 4 (S): , 008 Table 1: Cobb-douglas regression estimates for groundnut production Variables Coefficients T - value Age Family size Farm size Farming experience Seed Fertilizer Agrochemicals Labour R Standard error Constant 3.41 Source: Field survey, 006 *** = 1% level Figure in parenesis are t-ratios Table : Estimated resource-use efficiency in groundnut production Production Farm input elasticities MPP MVP MFC (N) Age Family size Farm size Farming exp Qty of seed Qty of ferti Labour (man days) Estimated to RTS 1.14 Source: field survey, 006 Table 3: Ratio of MVP to MFC Inputs MFC MVP/MFC (Px) Seeds Fertilizer Agrochemical Labour Source: Field survey 006 The coefficient of fertilizer (X 6) was positive and in accordance wi e expected sign meaning at at quantity of fertilizer applied was directly related to e output while e statistical insignificance of e coefficient implies at fertilizer was not a determinant of output in groundnut production. The coefficient of agrochemicals used (X 7) had insignificant coefficient at any of e specified levels indicating lack of relationship between output and agrochemical applied. A likely reason for e significance of e coefficient of agrochemical could be eier insufficient supply of agrochemical or its inefficient use since groundnut production is tedious and more labour demanding. While e positive value of e coefficient of agrochemical is in consonance wi apriori expectation. The positive sign of e coefficient is in agreement wi e hypoesized expected sign and implies at as eir ages increases to certain level, eir output also increases, is is however, possible up to certain level. The insignificance of eir ages furer lends credence to e fact age is not an important determinant of output in agricultural production. The regression mode is significant at 1% level as shown by F statistic. This implies at e whole equation is at best fit. The R of indicated at 78.40% of e variability in e output of groudnut is accounted for by e various independent variables used. The regression coefficients in e double-log function are Elasticities of e independent variables wi which e coefficient are associated (Table 1). The output of groundnut is inelastic wi respect to groundnut farm size, age of farmers, family size, farming experience, quantity of seed planted, quantity of fertilizer applied, quantity of agrochemical used and labour inputs. This implies at a change in e level of use of any of ese variables will result in less an proportionate change in output of groundnut. The Return to Scale (RTS), summing up of e production elasticities of e inputs amount to 1.14 which is more an unity and us characterized by increasing return to scale. This implies at production was in e irrational zone of production (stage 1) and at e percentage change in e variable input. That is factor input were not efficiently allocated and utilized while output was optimally produced. Resource use efficiency: Economic efficiency of resources use in groundnut production was determined using e ratios of eir Marginal Value Product (MVPs) to e Marginal Factor Cost (MFC). The MVP for each inputs was calculated by multiplying e marginal physical product (MPP) of each input by e arimetic mean price of e crop output. The MVPs and eir ratios of MFCs of ee variable resources in groundnut production are presented in Table. According to MPP to MVP figures, on e average and wi all oer factors held constant, an increase in man-days of labour would increase output by kg and revenue by N per hectare. While an increase in quantity of seed planted would increase output by 7.08kg and revenue by N

5 World J. Agric. Sci., 4 (S): , 008 The Marginal Value Product (MVP) of seeds, 6. Misari, S.M., C. Harkness and M. Fowler, fertilizer, agrochemicals and labour were computed Groundnut Production, Utilization, Research and compared to eir unit prices. The marginal value Problems and Furer research needs in Nigeria. products of ese resources were compared to determine International Workshop on Groundnuts, Patancheru, e degree of efficiency in eir use.. India, pp: Comparison of e ratio of e MVP to MFC shows 7. Larinde, M., Groundnut Seed Multiplication at two resulting ratio were greater an unity; labour and Constraints: FAO s experience, In: Aliyu, A. and and seed, indicating at e inputs were under used or G.O. Nwafor (Eds.). Restoring e status of being under utilized on e farms during e cropping groundnut in National economy. Proceedings of season hence increasing eir rate of use will increase e national Workshop on groundnut rehabilitation output and profit level. Similarly, two resulting ratios were in Nigeria. FAO/FDA Kano, Nigeria May. less an unity; fertilizer and agrochemical indicating at pp: e inputs were excessively used or over utilized hence 8. National Peanut Council (NPC) /Raw Materials decreasing quantity of e inputs use will increase output Research and Development Council (RMRDC) 00. and profit level. This confirms e hypoesis at Industrial Crops. RMRDC Abuja, Nigeria resources are not efficiently utilized. 9. National Peanut Council (NPC) Peanut Industry Guide The Peanut farmer, 6(8): 70. REFERENCES 10. Idama, A., 000. Perspectives on Industrialization of Adamawa State. Paraclete Publishers, Yola, pp: Hogendorns, J.S., Nigeria Groundnut Exports: 11. National Planning Commission (NPC) and United Origin and Early Development. ABU press Zaria, Nations Development Programme (UNDP) pp: Federal Republic of Nigeria, Development. Abalu, G.O.I. and E.G. Etuk, Traditional Versus Cooperation 1998/1999 Report. 1-4 Improved Groundnut Production Practices: Some 1. Adesinmi, A.A., Prospects and Potentials of furer Evidence from Norern Nigeria. Experimental Groundnut Cultivation as a Means of Enhancing Agriculture, : Economic Opportunities in ee Rural Economy 3. Gibbon, D. and A. Pain, Crops of e of Norern Nigeria. Unpublished Ph.D Thesis, Drier Regions of e Tropics. Longman, England. University of Wisconsin. pp: Misari, S.M., G.S. Boye and B.K. Kaigama, Purseglove, J.W., Tropical Crops. Groundnut improvement, production, management Dicotyledons. Longman, London. pp: and utilization in Nigeria: Problems and Prospects. 5. Hommons, R.O., The Origin and History of First ICRISAT Regional Groundnut Meeting for West Groundnut, In: J. Smatt, (ed), The Groundnut Crop. A Africa, Niemey, Niger, pp: Scientific Basis for Improvement. New York, Chapman Hall, pp: