COMPARATIVE ANALYSIS OF TECHNICAL EFFICIENCY IN RICE PRODUCTION UNDER SMALL-SCALE FARMER MANAGED IRRIGATION SYSTEM AND RAIN-FED SYSTEM IN KOGI STATE

AbstractThis research was designed to determine and compare the technical efficiency and  input levels used in rice production under farmer managed irrigation systems (FMIS) and rain fed systems (RFS) in Kogi State. It also compared the effects of socioeconomic characteristics on the technical  efficiency  of farmers in the FMIS and RFS. Four  null hypotheses  were tested.  The  study  was  conducted  in commercial  rice  producing  areas  of  Kogi  State.  It adopted  a  multi  stage  purposive  sampling  technique.  Agricultural  Zones  where  rice  is produced  in commercial  quantities  were  purposively stratified  into three (3) based on a preliminary  survey. From these three  zones, one local government  area (LGA) each was selected based on the availability of commercial rice farms in the area. Out of these LGAs (Ibaji, Bassa and Kogi LGAs), forty (40) rice farmers each were randomly sampled giving a total sample size of one hundred and twenty (120) rice farmers. Primary data were obtained by interviews via a set of structured questionnaires.  Data were analyzed using descriptive statistics,  Levene’s  test,  Welch  and  Brown-Forsythe  robust  tests  for  equality  of  means, Chow-break point test and maximum likelihood estimation (MLE) of stochastic frontier and inefficiency models. The mean age of farmers in the study area was 42 years.  The farmers in the study area spent a mean of 8 years on formal education. Seventy two percent (72%) of the farmers were males while twenty eight percent (28%) were  females. Women were not participating remarkably well especially in ownership of rice farms in the study area. The mean value of rice farming experience in the study area was 16years. Results showed that the FMIS had a higher intensity  of inputs usage  than the RFS. In the input comparison between FMIS and RFS, statistically  significant positive mean differentials were recorded for land, fertilizer quantities applied, family and hired labour, quantities of pesticides used on  the  farm  and  value  of  water  used  on  the  farm  per  farming  season.  The  estimated elasticities of mean output with respect to land, fertilizer, family labour, seeds, and water were  statistically  significant  at  less  than  1  percent  and  5  percent  in  the  FMIS.  Their respective elasticities were 0.33, 0.010, 0.075, 0.151 and 0.165. It was indicated that land size (farm size) and quantities  of fertilizer  applied  by the farmers,  were the  statistically significant determinants of technical efficiency in the RFS. The elasticities of rice output with respect to the inputs, land and chemical fertilizer utilized were 0.276 and 0.024 respectively. This result is unlike the FMIS where five variables had statistically significant elasticities. The mean technical efficiency of the FMIS was 73 percent. It  was lower than that of the rainfed  system  which  had  90  percent.  Significant  difference  existed  in  the  technical efficiencies  of the two groups. The returns to  scale  estimated,  0.813, and 0.476 for both FMIS and RFS respectively  indicated that  farms in the study area were characterized  by decreasing returns scale. Farming experience, years of formal education and frequency of extension contacts exerted statistically significant effects on the technical efficiencies of the FMIS. Meanwhile four out of the six socio-economic variables, education, extension contact and age of farmers  had statistically significant t-ratios or influences on the levels of rice output recorded by the RFS farmers. They were all significant at less than 1 percent alpha level.  Significant differences existed in most of the socioeconomic variables of the two group of  rice  farmers  studied  in  Kogi  State.  Five  major  recommendations  were  made  which included  the  need  for  capacity  building  among  farmers  and  extension  agents,  public investment in irrigation projects, public-private partnership aimed at encouraging resource conservation and inputs supply (including microcredit) to rice growing communities among others.

CHAPTER ONE

1.0       INTRODUCTION

1.1 Background to the study

Rice is a plant that produces an edible grain; the name is also used for the grain itself. There are several thousand varieties of rice (mostly wild), all belonging to the family  Poaceae, formerly Gramineae (Microsoftt Student, 2007 DVD). The cultivated rice plant, African and Asian rice (oryza glaberrima L and oryza sativa L), is an annual grass. It grows to about 1.2 m (4 feet) in height. The leaves are long and flattened, and its panicle, or inflorescence, is made up of spikelets bearing flowers that produce the fruit, or grain (Rashid-Noah, 2003, & Encyclopaedia Britannica Deluxe, 2004). In Nigeria rice is planted from April to May and harvested from August to November.

Water  resource  management  and utilization  is critical  to the success  or failure  of  many agricultural  enterprises  especially  rice  farming  (Hoffman  and  Ashwell,  2001  and  World Bank, 2006). Shortle and Griffin (2001) noted that surface water (e.g. rivers, lakes, estuaries and  wetlands)  which  are  highly  limited  in  supply  provide  about  70%  water  used  in agricultural  production.  However,  Botkin  and  Keller  (1997)  asserted  that  improved  or efficient rice irrigation system could contribute meaningfully to meeting the desirable goals of environmental resource conservation. They held that  improved irrigation systems could reduce withdrawal of freshwater by between 20% and 30%.

Rice cultivation originated as early as 10,000 BC in Asia (Microsoft, 2007). Archaeological evidence shows that rice was grown in Thailand as early as 4000 BC, and over the centuries spread to China, Japan, and Indonesia. By 400 BC rice was cultivated in the Middle East and Africa.  (Microsoftt  Student,  2007).  Rice  culture  gradually  spread  westward  and  was introduced  to southern  Europe  in medieval  times.  With  the  exception  of the type called upland rice, the plant is grown on submerged land in the coastal plains, tidal deltas, and river basins of tropical, semitropical and temperate regions. The seeds are sown in prepared beds,

and when the seedlings are 25 to 50 days old, they are transplanted to a field or paddy that has been enclosed by leaves and submerged  under 5 to 10 cm (2 to 4 inches) of  water, remaining submerged during the growing season (Rashid-Noah,  2003; and  Encyclopaedia Britannica Deluxe, 2004). Roughly 50% of the world population is wholly dependent on rice as a staple food; 95 percent of the world’s rice crop is eaten by humans. Microsoft Student (2007) maintained that Asian countries produced about 90 percent of the 576 million tons of rice grown worldwide in 2002.

The harvested rice kernel, (paddy or rough rice) is enclosed by the hull or husk.  Milling usually removes both the hull and bran layers of the kernel, and a coating of glucose and talc is sometimes applied to give the kernel glossy finish. The by-products of milling, including bran and rice polish (finely powdered bran and starch resulting from polishing), are used as livestock feed. Oil is processed from the bran for both food and industrial uses. Broken rice is used in brewing, distilling, and in the manufacture of starch and rice flour. Hulls are used for fuel, packing material, industrial grinding, fertilizer manufacture, and in the manufacture of an industrial chemical called furfural.  The straw is used for feed, livestock bedding, roof thatching mats, garments, packing material, and broom straws. In the late 20th century, the world rice crop averaged  between 800,000,000,000  and 950,000,000,000  pounds annually and  was  cultivated  on  an  average  of  about  358,000,000  acres  (145,000,000  hectares). (Encyclopaedia Britannica Deluxe, 2004).

According to FAO (2004) rice growing environment in Nigeria are usually classified  into five  rice  ecosystems   namely:  Rain-fed  upland,  Rain-fed  lowland,   Irrigated   lowland, Deepwater and Mangrove swamp. The mangrove swamp ecology is the least important in terms  of  area,  accounting  for  less  than  1%  of  total  rice  area.  Another  5%  of  the  rice production  area  is  generally  estimated  to  fall  in  deepwater  environment,  although  it  is believed  that  this  figure  is  most  likely  overestimated  given  the  physical  limits  to  area expansion  within this environment.  In general, of  the estimated  3 million  metric tons of

annual rice production in Nigeria, three major rice production systems in Nigeria  namely upland  rain-fed,  lowland  rain-fed  and  irrigated  production  account  for  97%  (Daramola,

2005). According  to West Africa Rice Development  Association  (WARDA)  (2003),  rice (Oryzae Spp.) generates the largest contribution to household income in Nigeria. A variety of rice production systems and technological  levels coexist.   WARDA (2003)  and Daramola (2005) maintained that lowlands without water control are the main  ecology followed by upland and irrigated rice. Rice production  can be found in each  of the large geopolitical zones of the nation (e.g. Middle Belt) based on ecology and ethnic traditions. These extend from the northern to southern zones with most rice grown in the eastern states (Enugu, Cross River, and Ebonyi States) and middle belt (Benue, Kaduna, Niger, Kogi and Taraba States) of the country.  Daramola (2005) observed that the middle belt of the country (where Kogi State is located) enjoyed a comparative advantage in production over the other parts of the country. Reports by WARDA (2003); and Horna, Smale and von Oppen (2005), indicated that Kogi State produced at least five percent (5%) of the total rice production in Nigeria.  In

2000, Kogi’s total output and yield mainly from wet season rice farming stood at 1,025,000 tons  and 2.28  tons  /ha (PCU,  FMARD  in WARDA,  2001).  In Nigeria  1  million  ha of informal irrigation schemes sprang over flood plain areas along river valleys (Musa, 2001). This is where rice farmers are in Kogi State mostly.  An International Food Policy Research Institute (IFPRI) sponsored study conducted by Horna, Smale, and von Oppen (2005) noted that lowland (or swamp) rice production was more important than upland production in Kogi State, although upland rice was an alternative for small farmers with limited access to good quality land. The study also observed that Kogi farmers had limited experience in upland rice production.

Nigeria is West Africa’s largest producer of rice, producing an average of 3.2 million tons of paddy  rice  (~ 2million  tons of milled  rice)  for  the past  7-years  (WARDA,  2001).  Rice production is primarily by small-scale producers, with low yield per hectare averaging about

1.47 tonnes/ha from farm sizes of between 0.5 and 2 ha (WARDA, 2004 & FAO, 2004). This situation  was  attributed  to  poor  production  systems,  aging  farming  population  and  low competitiveness with imported rice (Daramola, 2005). The low productivity from Nigerian rice  farms  had  necessitated  huge  dependence  on  importation  of  rice   by  the  Federal government  over  the  years.  (See  Tables  2.1  and  2.2  for  details).  However,  the  Federal Government had not been complacent about the above scenario. Many steps taken in the past to  boost  rice  production  were  not  sustained.  According  to  WARDA,  the  programmes included: National Accelerated Food Production Programme (NAFPP), Operation Feed the Nation (OFN), 1976-1979, Green Revolution (1979-1983), and the River Basin Development Authorities  (RBDAs) 1983-1985  (WARDA, 2003). However, these programmes  were not specifically targeted at boosting rice production. The Federal Government had put in place a National Special  Programme  on Food Security, (NSPFS), whose objective  was to ensure food security in the broader sense and alleviate rural poverty in Nigeria. WARDA (2003) noted that  successive governments failed to implement these programmes adequately. The administration of President Olusegun Obasanjo also launched the Presidential Initiative  on Rice Production and Fadama Development. WARDA noted that this programme along with the New Partnership for Africa’s Development (NEPAD) input delivery  system and credit facility – conducive environments, will serve as catalyst for increases in rice production. The report added that “ government hopes to increase production of rice to get a firm grip and control of poverty and hunger, unemployment and crime caused by the urge to fill a basic need thereby ensuring environmental  sustainability”  (WARDA, 2003). Import restrictions, tariffs and bans had been used to protect and boost local production of rice in Nigeria. The high import duties of 100% in 1995 was reduced in 1996 to 50% and later increased to 85% in 2001. According to Momoh (2007) “twice, Nigeria fixed dates for a ban on importation of rice to Nigeria and failed to implement the ban.” The ban was planned for 2006 and later deferred to 2007. As at September 2007 the ban was yet to be implemented. However, by May 2008 Nigeria’s  government  announced  it will  import  500,000  tonnes  of  rice  up  to a

value of US$600 million to curtail the effect of the global rise in food prices on Nigeria. The decision  was taken  after  an emergency  meeting  between  the Nigerian  President,  Umaru Yar’Adua  and  the  governors  of  Nigeria’s  36  states  (Integrated  Regional   Information Networks, IRRI, 2008). The whole essence of this importation in the short term was to create availability and reduce the skyrocketing prices. The speculated ban was yet to be as at this moment.  This  is  evidenced  by  a  report  from  Oryza  (2008)  which  held  that    “market speculations that the ban on the importation of brown rice is likely to be lifted soon were put to rest as Nigeria’s Federal Government reiterated commitment to sustain the ban in order to encourage local production of paddy rice.” According to the Federal Ministry of Agriculture and Water Resources, the report added, the ban is in the country’s prime interest as any such reversal  would  have  be  detrimental to  the  nation’s  economy  and  would  deny  Nigerians employment  opportunities  and wealth creation. Existing low level of productivity in food grain production reflect low level of technical, allocative and economic efficiencies (CBN,

2003  &  Kolawole,  2006).  Therefore,  increasing  agricultural  growth  is  an  indication  of appreciable  growth  in  agricultural  production  process  that  is  linked  to  farm  efficiency. Hence, farm productivity and efficiency is no longer debatable but a  necessity in view of imminent  food  deficit  experienced  in  the  country  judged  by  the  over  reliance  on  food importation in recent time (CBN, 2003).The attempted imposition of ban on the importation of rice and other food stuff that can be produced locally in the country is an indication that rice growers in the country must leave up to the expectation of meeting the local demand. To achieve this objective, effort must be taken to examine the productive efficiency of the rice farmers in the country.

1.2      Statement of the Problem

Central to the issue of Nigerian rice’s supply and demand gap estimated to be about 2 million metric tons annually (WARDA, 2003; FOS, 2005; Daramola, 2005 and Momoh, 2007) is the issue of efficiency of rice farms in the use of resources. Average yield of upland and lowland

rain fed rice in Nigeria is 1.8 ton/ha, while that of irrigation system is 3.0 ton/ha  (Project Coordinating  Unit,  PCU,  2003).  This  is very low when  compared  with 3.0  ton/ha  from upland and lowland system and 7.0 ton/ha from irrigation system in places like Cote de Voire and Senegal (WARDA and NISER, 2001). Therefore, it appears that rice farmers in Nigeria are  far  from  optimizing  the  returns  they  derived  from  resources  committed  to  their enterprises (FAO, 2004 & Mbah, 2006), a situation capable of threatening sustainable use of the natural resources used in producing rice in the country.

Unfortunately, WARDA (2001) & Daramola (2005) noted that there was no comprehensive and up to date information on the level of resource use efficiencies of  the rice farmers in Nigeria. The few available ones such as Ogundele and Okoruwa (2006), Anuegbunwa (2006) and Mbah (2006) were either system based or location  specific.  Ogundele  and Okoruwa (2006) examined technical efficiency differentials between farmers planting two varieties of rice: traditional and improved varieties in Nigeria.

Most of these studies focused mainly on the profitability of the enterprise without in-depth enquiry  into efficiencies  of farmers  and factors that determine  their levels of  efficiency. Studies comparing efficiencies of irrigated and non-irrigated rice systems especially in Kogi State are not available. However, WARDA, (2003) observed that a related study by Okorji and Onwuka (1994) was conducted in  Uzo-Uwani Local Government Area of Enugu State. Similar studies by other scholars laid little emphasis on aquatic resource efficiency and their economic valuation especially with respect to rice production. This follows the assertion of International Rice Research Institute, IRRI (1998) which held that little was known about the relationship between improved  water-use efficiency at the field level and at the irrigation scheme or catchments  level.  Anuegbunwa’s  (2006) study on marketing efficiency of rice farmers and rice input efficiencies mentioned nothing about aquatic resources utilized by rice farmers in the state (Ebonyi). Surveys with closer thrusts to the focus of this paper were those of  IFPRI  (2005)  and  Urama  and  Hodge  (2004).  Urama  and  Hodge  (2004)’s  survey

acknowledged  the  enormity  of  choosing  between  intensive  irrigation  schemes  and  less intensive farming systems. Even though their study was on irrigated systems, it was location specific.  This  was corroborated  by WARDA  (1999)  and Horna,  Smale,  and  von Oppen (2005) whose studies noted that among the three states of Nigeria studied (Ogun, Kogi and Ebonyi), “each site has unique ecological features, social and economic conditions.”  Given the above scenarios, there is a need to undertake a study to determine the true position of rice efficiency under two systems (small-scale Farmer  Managed Irrigation system and rain-fed systems) in Kogi State.

1.3      Objectives of the Study:

The  broad  objective  of  this  study  is  to  determine  and  compare  the  efficiency  of  rice production under small-scale FMIS and rain-fed system. Specifically, the study will:

i                analyze the socio-economic characteristics of rice farmers;

ii               compare the inputs used in rice production systems under small-scale FMIS

and rain-fed system.

iii              compare the technical efficiencies of  rice farmers under the traditional small- scale farmer managed irrigation systems(FMIS) and the rain-fed systems (RFS) in the study area.

iv              compare the effects of socio-economic  characteristics  of the two groups  of rice farmers on their technical efficiencies.

v               make recommendations based on findings.

1.4      Hypotheses of the study:

The null hypotheses derived to guide the study are as follows:

Ho 1.     There  is no significant  positive  difference  in the  mean  estimates  of the  socio- economic characteristics of farmers in the FMIS and RFS.

Ho2     There is no significant positive difference in the mean levels of input use between the farmer managed irrigation system and that of the rain fed system rice farming in the study area.

Ho3     There  is no significant  difference  in the  mean  levels  of  technical  efficiencies  of farmers  under  the small scale  farmer  managed  irrigation  system  and the  rain-fed system in the study area.

Ho4     There is no significant positive effects of socio-economic characteristics of the two groups of rice farmers on their levels of technical efficiencies.

1.5      Justification of the Study

It  has  been  established  that  improving  efficiency  of  irrigation  can  help  in  saving  or conserving   water  resources   which  is  relatively   scarce,  especially  freshwater   sources (Hoffman and Ashwell, 2001 & IMF, 2006). Hence there is a strong need for a study of this nature  at a time  when  Nigerian’s  fadamas  (wetlands)  are under  threat  of  desertification (Abdulkarim,  2005  &  Nwafor,  2006).  This  is  coming  on the  heels  of  Nwafor’s  (2006) assertion that “energy and resource consumption efficiencies throughout the lifecycle of any technology  are important  sustainability  parameters”.  New Agriculturists  (2006)  held that global warming, increasingly recognized as the mother of all drivers of change, is expected to accelerate water-saving trends. Buresh (2006) in the same source corroborated this assertion by stressing  that “well-managed  irrigated  rice ecosystems  are masterpieces  of ecological vitality and sustained productivity.”

It  was  noted  that  the  governments’  efforts  towards  achieving  self-sufficiency  in  food production  (food  security)  emphasize  the prioritization  of irrigation  (Othman,  Abubakar, Murtala and Ibrahim, 2005 and NPC, 2005). This study reinforces the attainment of this goal. Nigeria  had potential  for formal  irrigation  of approximately  1.4  million  ha and about  3 million ha of informal irrigation. Unfortunately, the cultivation of the developed areas under public irrigation schemes, mostly managed by River Basin Authorities, was reported to be

reducing at an alarming rate (Adeniji, 2001; Othman, Abubakar, Murtala and Ibrahim, 2005). Given this scenario, a study of this nature will be justified as its results will shed light on the potentials and drawbacks of irrigated farms especially for a crop such as rice which largely relies on irrigation thus giving policy makers opportunity to derive informed policies in the area of irrigated farming.

Environmentalists including NGOs, policy makers, researchers and students of Economics, Agricultural  Sciences especially Agricultural  Economics  will benefit  immensely  from the findings of this study as it analyzes the efficiency of resource use in various systems of an important crop rice using approaches of environmental economists.

1.6      Limitations of the Study

Under normal circumstances, a study of this nature would have been easily generalized if it covered the whole country and probably span over years (using panel data). However, due to the short time limit needed to complete the course programme which this project aimed at fulfilling, and given the lean financial resources at the disposal of the researcher, it was not possible for the study to neither cover a larger area nor use panel data. Hence, the study was confined to Kogi State alone especially among commercial rice farmers only.

The study is further limited by general dearth of documented records of financial transactions and inventory  records among many of the rice farmers.  This necessitated  more  rigorous efforts by the researcher to retrieve data from the rice farmers who had to rely on memory recall in most cases especially  where receipts or documented  evidence of their historical transactions were lost.

Despite  the  above  shortcomings  however,  efforts  were  made  by  this  researcher  to  use accurate information and estimates where necessary.  With the use of information and figures from several rice farmers it was possible to deduce reliable estimates of costs, returns and other relevant data which made the report authentic and generalizable.

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