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ECONOMIC ANALYSIS OF SUGARCANE PRODUCTION AND ITS CONTRIBUTION TO FARM INCOME OF FARMERS IN MAIGANA AGRICULTURAL ZONE OF KADUNA STATE, NIGERIA
ABSTRACT
The study examined the costs and return as well as resource use efficiency of sugarcane production and its contribution to farm income in Kaduna state, Nigeria. Primary data were collected from 330 sugarcane farmers selected using multi-stage sampling technique. The data of 2013 cropping season were collected with the aid of structured questionnaire. Data collected were analyzed using stochastic frontier production function. The maximum likelihood estimate (MLE) of the stochastic frontier model production function revealed that the resource inputs were under-utilized. The technical efficiency score of each respondent revealed that the most efficient farmer operated at 97% efficiency, the least was found to operate at 48% efficiency level, while the average was 89%, indicating that sugarcane farmers still have the potential to increase the efficiency in their farming activities by 11% in the study area. The inefficiency model revealed that farming experience, educational levels and extension contact increase technical efficiency of the farmers. The variance parameters of the frontier production model were Sigma-squared (δ2) and Gamma (γ) and their estimated coefficients in the study area were 0.11 and 0.93, respectively. The return to scale was estimated to be 1.04. Sugarcane Production was profitable with an average return of 83 Kobo for every N1 invested in the study area. Sugarcane production in the study area contributed averagely to about 19.55% of the farmers’ annual farm income. The maximum contribution made was 81.87% while minimum was 0.12%. The major constraints were low demand for the crop, inadequate capital and credit inaccessibility, fertilizer at unaffordable price, and theft. The study recommended the need for training sugarcane farmers on farm inputs optimum utilization by the extension agents, an enabling environment should be created for sugar industries, the farmers should form a formal and strong sugarcane farmers association that would represent their interests as steps towards boosting its production and utilization.
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