INVOLVEMENT OF SMALL AND MEDIUM SCALE ENTERPRISES IN CULTURE FISH VALUE CHAIN IN NIGER STATE, NIGERIA

ABSTRACT

This study assessed involvement of small and medium scale enterprises (SMEs) in cultured fish value chain in Niger State, Nigeria. Fish provides a rich source of protein for human consumption. The specific objectives were to: describe the socio-economic characteristics of the SMEs, examine the various SMEs in cultured fish value chain, determine the income disparities between the SMEs along the cultured fish value chain, evaluate the factors influencing the profit of SMEs in cultured fish value chain and finally examine the constraints of different SMEs along the cultured fish value chain. A multi-stage sampling technique was employed in the selection of respondents to get a total number of two hundred and sixteen (216) respondents composed of 79 producers, 75 processors and 62 marketers on which questionnaire were administered and complemented with face-face interview. Data collected were analyzed using descriptive statistics, flow chart, farm budgeting technique and inferential statistics such as multiple regression analysis. The results obtained showed that mean age of producers, processors and marketers were 42 years, 40 years and 42years, respectively. Majority (93.8 %, 68.0% and 71.2%) of the producers, processors and marketers respectively, were male implying that men were more involved in cultured fish farming than their female counterparts. The average mean of household size was 7, 7 and 8 for producers, processors and marketers. Also, majority of the cultured fish actors were educated having a minimum academic qualification of first school leaving certificate. This implies that the cultured fish farmers could read and write, thus, able to adopt new innovations. The results also showed that average farming experience of producers, processors and marketers was 11.4 years, 10 years and 8 years, respectively. The cost and return analysis of the culture fish producer for 1000stock/production cycle gives a gross margin sum of ₦176,113.89 and a net profit of ₦123,096.91, while processors (100kg) had a gross margin of ₦51,239.00 with a net income of ₦32,260.09 and the marketers (100kg) had a gross margin of ₦26,564.80 with a corresponding net income of ₦25,351.40 this implies that the culture fish value chain business is profitable. The pair-wise t-test showing differences in the profit margin of the three value actors (producer, processors and marketers) and how they significantly differ from one another revealed t – statistic value of 1.741 at 10% level of probability. This implies that there was a significant difference in the mean profit of the producers and processors, while t – statistic value of 1.634 showed that there was no significant difference in the mean profit of the producers and marketers. Thus, the null hypothesis was therefore accepted Furthermore, t – statistic value of -0.192 showed that there was no significant difference in the mean profit of the processors and marketers. Thus, null hypothesis was therefore accepted. The major constraints faced by cultured fish value chain actors include: Lack of ready market, Shortage of ponds’ water, Poor extension services, and high cost of fingerlings. Processors constraints are majorly Poor market information, Limited access to credit and high interest rate, Lack of storage facilities. Marketing constraints are Challenges in prices of harvested fish, Lack of ready market, High cost of transportation, Fish price are unstable, Lack of transportation facilities The study concluded that  cultured  fish  farming has  helped  increase shelf-life,  open  new  market opportunities for producers by increasing job creation down the value chain this directly reduces  rural  poverty.  Based  on  the findings  of this  study,  it  was  recommended  that government should improve on infrastructures in the rural areas and there should be active use of extension agents to transfer innovative ideas and technologies to the farmers.

CHAPTER ONE

INTRODUCTION

1.1       Background of the Study

Small and Medium Enterprises (SMEs) has impacted greatly on the economic growth and development in Nigeria and across the world (Olowe et al., 2013).  Ofoegbu et al. (2013) also agreed that SMEs are the bench mark of many developing countries such as Nigeria. They believe that  interest in SMEs will enhance job opportunity, reduce income disparities, and increase production of goods and service in the economy as well as providing a fruitful ground for talent progress. SMEs contribute to improving standards of living, bring about substantial local capital formation and achieve high level of productivity. SMEs are recognized as the principal means of achieving equitable and sustainable industrial diversification and dispersal (Adewuyi et al., 2010).   According to Salami (2013), SMEs account for well over half of the total share of employment sales, and constitute the most viable and veritable means for self -sustaining industrial development. SMEs possess the capability to grow an indigenous enterprise culture more than any other strategy.

SMEs are divided into different industrial sectors such as agricultural sector, fishery sector and marketing sector which plays a vital role in the industrial development. Schaper (2016) reported that, there have been several ideas to move from capital intensive to large scale industrial project which is based on improving the SMEs that have better views for developing domestic economy, thereby producing the required goods and services that will boost the economy of Nigeria towards development. Ojo (2009) posited that the major challenges of development in developing countries particularly in Nigeria, is encouragement of entrepreneurial development scheme. Despite the abundant natural resources, the country still finds it hard to discover her developmental bearing since independence. Quality and adequate infrastructural  provision has remained  difficult; other sectors  have perceived downward performance while unemployment rate is on the increase (Oni and Daniya, 2012).

Fish is an important source of animal protein with good amino acids and essential minerals profiles. According to Food and Agriculture Organization of the United Nations (FAO) (2018), there is great gap between the demand of fish and fisheries production in Nigeria. According to the report, there is about 179 million tonnes of supply in 2018 globally; while in Nigeria the current fish production stands at 0.8million metric tonnes with a deficit of 1.9million metrics tonnes of fish, as local demand for the protein is 2.7million tonnes annually. This makes Nigeria one of the largest importers of fish in the developing world, importing 600,000 metric tonnes annually (Adewuyi et al., 2010). It is therefore important to ensure that improved fish production technologies that have been developed and disseminated are adopted, in order to increase fish production. Fishery industry is essential to the World economy, the livelihood of millions of people worldwide are dependent on fish farming (Golden et al., 2016). Fish provides a rich source of protein for human consumption. The flesh of fish is readily digestible and immediately utilize by the human body, making it suitable and complementary for regions of the world with high carbohydrate diet, like Africa (FAO, 2015). However, global evidence indicates that in many areas of the world, particularly in Africa, fishery management has decline (Beaumont, 2016).

Over the years, efforts have been made to develop new technologies, which have been introduced to the industry. This has led to more fish being caught, but this has also resulted in the over-exploitation of fisheries (Yáñez et al., 2017). The consumption and demand for fish as a major source of protein is rapidly increasing in most African countries, because of the poverty level in Africa. Fish is mainly supped from rivers in the continent, but capture fisheries are based on species presently exploited which seems to have reached their natural limits (Ferrol-schulte et al., 2013).

The aquaculture industry has great potential to meet the increasing demand for aquatic food in most regions of the world (Akegbejo-Samsons and Adeoye, 2017). The need for intensive and skilled management stems from the high level of capital invested in the facilities, and in the high levels of operating capital required to operate a competitive and profitable SMEs. Commercial aquaculture (farming operations of aquatic organisms) seeks to maximize profits (business-oriented) especially by the private sector. Majority of SMEs involved in cultured fish require substantial amounts of both operating and investment capital. One of the largest problems encountered in starting a cultured fish SMEs often is to acquire sufficient capital.

Aquaculture value chains include a sequence of value adding activities, from production to consumption, through processing and marketing (Gereffi and Fernandez-Stark,2011). Each segment of a chain has one or more backward and forward linkages. A value chain in agriculture identifies the set of actors and activities that bring a basic agricultural product from production in the field to final consumption, where at each stage value is added to the product (De Silva,2011).

According to Ifejika et al. (2007a), fish farming is one of the new initiatives that have been implemented in various areas in Niger State. Fish farming is carried out by fish farmers through fish ponds and is mainly practiced by farmers in the rural communities as a source of food and income. The response has been positive and extremely high as evidenced by a large number of individual farmers and famers’ groups specialized in fish farming.

As reported by Ali et al. (2008), culture fish value chain in Niger State was fairly simple and short, with wholesalers and traders buying at the farm-gate and re-selling either directly to restaurants or market women who retail fresh or smoked fish directly to consumers in Niger State’s various markets. The consumer preference is for large fish at bars/joints and restaurants, the small and odd-sized fish also find a ready market with wholesaling market women  who specialize in  smoking fish.  Domestic smoked  fish  demand in  Nigeria is estimated to be as large as the fresh fish market, and increasing in markets far away from the coast. Smoked fish markets were generally controlled by fish market women who by tradition, smoke fish and sell at a margin to mostly traders and retailers, and sometimes to consumers as well.

1.2        Statement of the Research Problem

The global production of fish has decline over the years, and has highlighted many challenges to development. Culture fish enterprises, particularly in Niger State, often have low production efficiency, experience occasional production crashes due to fish diseases Ifejika et al. (2007b) contribute to pollution and the loss of mangroves. Efforts to sustain or accelerate culture fish growth in Niger State must address breed improvements, fish health, sustainable feeds  and  environmental  management,  together with  the  need  for socially equitable distribution of economic and nutritional benefits.

In Niger State, majority of poor and unemployment youth have engaged in establishment of personal SMEs in other to improve their standard of living (Sharu and Guyo, 2013).

Consequently, entrepreneurship is growing to a fast level and becoming a household name in Niger State. Reasons being that the white collar jobs that people admire and boast of are no longer there. Even, the touted sectors (Banks and companies) known to be the largest employer of labour are on the down-turn following the consolidation crisis and fraudulent practices of high and mighty in the banking sector. The companies of course are folding up as a result of erratic power supply, insecurity and persistent increase in interest rate which has led to high cost of production that undermines profit making potentials of companies operating in Niger State. As a result of banking sector practices and continuous folding up of companies, a lot of people are thrown into unemployment which inevitably is detrimental to the economic situation of the country (Salami, 2013).

Culture fish are projected to be the dominant supply of fish for many in Niger State for decades (World Bank, 2014). However, most people face severe pressure from overfishing, particularly in resource-poor regions where fish is an important source of food and income (FAO, 2014). The most recent analysis of culture fisheries clearly demonstrates that the importance of small-scale fish farming for food security of Niger State cannot be overemphasized (Pauly, 2008). The performance of the fisheries sector in Niger State is below expectation with low supply as a result of low production. This is evident in the fact that Niger State still imports fish into the State to supplement fish production. Fish farming in Niger State is the least exploited fishery sub-sector with the vast brackish water fishing grounds almost unexploited (Ejiola and Yinka, 2012). Less than 1.0% of the fresh water grounds and about 0.05% of the brackish water grounds are under aquaculture to produce a current average yield of 20,500 tonens of fish per annum. This represents only 3.12% of the estimated culture fish potentials of 656,815 tonens per annum (Oyinbo and Rekwot, 2013).

In spite of these great potential of natural resources and man-power availability to fish farming in Niger State, the State is still currently unable to bridge the gap in the short fall between total domestic fish production and total domestic demand. Niger State has been unable to produce enough fish for consumption because improved high-breeds of fish that depend on phytoplankton have not been adequately adopted; but still depend on local varieties that are of low productivity. Salami (2013). Besides, most rural farmers who are the major producers of fish, do not have adequate access to purchase fish equipment or facilities which have tendencies for enhancing productivity, income and alleviating rural poverty. Fish farmers as other farming producers are not enjoying the benefits of their products due to inadequacy of inputs and markets. Value chain is essential to the understanding of markets, their relationships, the participation of different actors, and the critical constraints that limit the growth of fish production and consequently the competitiveness  of smallholder farmers. These  farmers  currently receive only a small fraction of the ultimate value of their output, even though in value chain theory, risk and rewards should be shared down the chain. The potential for an improved and well- functioning market which will enable smallholder producers to derive greater benefits from their production activities has not been fully tapped.

Despite the great opportunities which the fishery sub-sector holds in Niger State, a lot of the fish resources are being wasted and underutilized on a daily basis due to an unorganized or uncoordinated distribution channel (Aihonsu and Shittu, 2008). The fish value chain in Niger State are not yet developed to meet international market requirements as limited value addition is done in the industry and this has limited fish and fish products to only domestic markets. Value addition to fish in Niger State is mostly simplistic and traditional. The reasons include fisher folk eagerness to raise immediate income from fish harvest and the high level of fish spoilage once harvested. It is thus against these backdrops that this study intends to examine the SMEs value chain of culture fish in the study area by providing answers to the following research questions:

i.   What are the socio-economic characteristics of the SMEs?

ii.  What are various SMEs in culture fish value chain?

iii. What are the income disparities between the SMEs along the culture fish value chain?

iv. What are factors influencing the profit margin of SMEs in culture fish value chain actors?

v.   What are the constraints of different SMEs along the value chain?

1.4       Aim and Objectives of the Study

The main aim of the study is to determine the involvement of small and medium scale enterprises in culture fish value chain in Niger state, Nigeria. The specific objectives of the study are to:

i.         describe the socio-economic characteristics of the SMEs;

ii.        examine the various SMEs in culture fish value chain;

iii.        determine the income disparities between the SMEs along the culture fish value chain;

iv.        evaluate the factors influencing the profit of SMEs in culture fish value chain, and

v.         examine the constraints of different SMEs along the culture fish value chain.

1.4       Hypotheses of the study

The following null hypotheses were formulated subject to further empirical validation in this study:

HO1: There is no significant relationship between some socio-economic characteristics of (age, gender, household, education and experience) of SMEs value chain and profit realized. HO2: There is no significant difference in the profit realized among the various SMEs in culture fish value chain.

1.5       Justification of the Study

In Nigeria, the role of fish is recognized in the National Development Plan (2013 – 2016). Improvements in governance and management of resources along the value chain  are identified as key to sector development (Sharu and Guyo 2013).Fish as a source of animal protein has played a vital role in the nutritional budgets of many nations as fish production is becoming more valuable and important source of food protein. The world food crisis and present demand for food are increasing the demand for fish and aquatic organisms which can directly be consumed or converted to food for human consumption.

Fish requires high quality nutritionally balanced diet for growth and attainment of market size within the shortest period of time. Therefore, local production of fish feed is very important to the development and sustainability of culture fish in Nigeria, particularly the rural areas. For aquaculture to reach and bridge the already existing wide gap between fish demand and supply especially in the Sub-Saharan Africa, the vital role of locally produced fish feed in reducing production cost, thereby making fish farming attractive to both private and commercial investors and ultimately to boost fish production cannot be over-emphasized (Gabriel et al., 2007).   Fish and fisheries are included in the SMEs and are expected to maximize their contribution to the target 6% annual agriculture productivity growth rate. The value chain approach has been seen by notable organizations, government and other agencies as a very reasonable and concrete way of poverty alleviation by focusing on weak links and constraints faced by various actors in the value chain. The process not only include more actors but it also covers wider range of activities such as facilitating access to inputs, strengthening the delivery of SMEs and financial services, enabling the flow of information and facilitating leveraging to higher-value markets. The cumulative effect of the activities collectively leads to the creation of more jobs and more income.

Therefore, the outcome of this study is expected to expand the frontier of knowledge. The exploration of facts findings is expected to raise some policy issues and give policy direction to policy makers. It will give new knowledge for prospective entrants into the SMEs, stakeholders and researchers. This will not only reduce poverty, but also help the poorest of the poor to contribute and benefit from the value chain. This study will also provide basis for the review, design and implementation of new poverty reduction strategies and could serve as a baseline for the assessment and monitoring of fish value chain under SMEs in Niger State. Thus, the study aimed at contributing to bridging the knowledge gap, promoting co-operation, co-ordination and communication among the fish value chain stakeholders.

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