ECONOMIC ANALYSIS OF RICE PRODUCTION AND MARKETING IN UZO-UWANI LOCAL GOVERNMENT AREA OF ENUGU STATE

ABSTRACT

The study examined the economics of rice production and marketing in Uzo-Uwani Local Government Area. Using multi-stage random sampling technique, a total of 120 rice producers and marketers were randomly selected. The relevant data for the study were collected through a set of structured questionnaire administered to the selected respondents. The study described the systems of rice production and marketing in the study area, compared the socio-economic characteristics of rice producers and marketers, and their effects on production and marketing of rice, described the rice market and its distribution channels, compared costs and returns of rice production and marketing, identified and examined the major problems of rice production and marketing and made recommendations for enhancing rice production and marketing. The analytical tools used in this study included descriptive statistics, multiple regressions, enterprise budgeting, costs and returns, marketing and gross margin analysis. Result of the study showed that more males than females were involved in rice farming and more females than males in marketing. Majority of both producers and marketers were within the age bracket of 40-49 years. Amongst all the categories of household sizes, those with 1-10 members for both the producers and marketers had more output than others. Majority of the producers and marketers sourced their funds from personal savings. Most farms and markets were of short distances, therefore transport costs was affordable. Most marketers relative to producers were new in rice business. The major socio-economic characteristics that affected the net return from producers and marketers were number of hectares of rice cultivated for the farmers, marital status, number of household members involved in the business and distance from the house to the market for the marketers. The prevalent types of rice production systems in the area were rain fed upland and rain fed lowland. Two methods of rice processing identified were hand pounding system and small mill system. The categories of marketers identified in the area were those who buy paddy rice, store and sell later; those who buy paddy, process and sell; and those who sell both paddy and milled rice. Three main types of markets identified in the area were farm gate markets, designated markets and central markets. The mean sales revenue realized from a 2ha rice farm was calculated using enterprise budgeting to be N240, 000.00. This gave a net profit of N44, 525.00 and return per naira of investment of N1.23.00. In line with the producers output, the wholesaler buys and realized a total amount of N432, 000.00 with net-income of N18.400.00 and return on Naira of investment as N1.45.00. Comparatively, the result showed that the wholesalers made the highest profit in the rice business. Lack of developed/fertile lands, funds, inputs, pest and diseases were found to be the challenging constraints of the producers. While inefficient/high cost of transportation, ineffective storage, inefficient grading and standardization, shortage of labour/manpower are found to be major constraints in the rice marketing-enterprise. Based on the findings of the study, the following recommendations were made feeder roads should be maintained by appropriate government authorities, this will help to retain the affordable transport costs, grading and standardization should encouraged in line with national and international best practices; proper training of both farmers and marketers should be arranged by both government and farmer-associations to encourage record keeping, the financial base of both farmers and marketers should be boosted by Government and donor agencies through the facilitation of loans from financial institutions and granting of subsidies.

CHAPTER ONE

INTRODUCTION

1.1      Background Information

Equitable and sustainable economic development cannot ignore basic food commodities particularly in developing countries such as Nigeria. Basic food commodities play important roles in economic development as their availability and costs impinge on food security, expenditures and incomes of households, particularly among poor segments of the population in both rural and urban areas. Of all the basic food commodities, rice is particularly important (Akpokodje, et al, 2001). This is because in Asia, rice constitutes the staple food. In America and Europe, it is frequently taken. In Africa, rice is more important in the urban centres where evidence of rising level of income is more prominent (Lang, 1979; Fulani, 1980).

Nigeria is one of the largest rice producers in West Africa (WARDA, 1981). In Nigeria, also, it is one of the important cereal grains replacing some of the grains and tuber crops. Rice used to be the “white mans” food meant only for the elites and high class individuals in the society. The middle class and the peasants, who constitute a higher percentage of the population, only ate rice at Christmas and other major festive periods. Many of them had the belief that rice symbolized Christmas and vice-versa (Ogbuakanne, 1998).

However, combinations of various factors seem to have triggered the structural increase in rice consumption. According to Akanji (1995), rising demand was partly the result of increasing population growth. Also, increased income levels, following the discovery of crude oil, led to the rise in the demand for the commodity. The most important factor contributing to the shift in consumer preferences away from traditional staples and towards rice is rapid urbanization and associated changes in family occupational structures. As women enter the workforce, the opportunity cost of their time increases and convenience foods such as rice, which can be prepared quickly, rise in importance. Similarly, as men work at great distances from their homes in the urban setting, more meals are consumed away from home where the ease of rice preparation has given it a distinct advantage. The average Nigerian consumes 24.8kg of rice per year, representing 9% of total caloric intake (Rice Web, 2002).

Olufowole and Joshua (1979) reported that, of the 25 varieties of rice recommended to Nigerian farmers, only five were upland varieties while the remaining 20 were for swamp production. The popular variety of upland rice in the study area is FARO 1I while the most popular variety of swamp rice is IRRI 14/16. This is considered to be the highest yielding rice variety, while FARO 25 ranked second.

According to WARDA (1981), IRRI (1990), and Maclean (2002), Nigeria’s rice production made some remarkable gains from 1980 to 1989. The area under cultivation grew from about 400,000 hectares in 1980 to 900,000 hectares in 1989. Paddy rice production increased from about 600,000 tonnes in 1980 to about 1,422,000 tonnes in 1989 and 3.189.833 metric tonnes from 1990 -1999.

Prior to the World Bank Rice Project and River Basin Development Authorities in Nigeria, domestic rice production depended mainly on natural rainfall which was very erratic in nature. Farmers under this system (rain fed)......

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Item Type: Project Material  |  Size: 70 pages  |  Chapters: 1-5

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