EFFICIENCY OF RESOURCE USE IN SESAME PRODUCTION IN BENUE STATE

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EFFICIENCY OF RESOURCE USE IN SESAME PRODUCTION IN BENUE STATE

CHAPTER ONE

INTRODUCTION

Background of the Study

Agriculture is the main source of livelihood for more than 60% of Nigeria’s population (National Bureau of Statistics, 2007; Federal Ministry of Agriculture, 2010). In 2005, for instance, the sector gave employment to 46% of the population and contributed about 40% of GDP of the country (NBS, 2007; FMA, 2010). Of the four sub sectors of agriculture, crop subsector contributed 85% of GDP, while livestock contributed about 10%, fisheries about 4%and forestry 1% (Federal Republic of Nigeria,2006).Growth performance of agriculture is therefore largely driven by the performance of crop subsector on account of dominance (CBN, 2009; FAO, 2009).

Agricultural sector occupies a significant link in the food security and poverty alleviation. It employs more than 70% of the labour force, accounts for over 70% of non-oil export and most importantly provides over 80% of the food needs of the country (Adegboye, 2004). However, over the years there has been a marked decline in the performance of the sector. Nigeria, consequently, had to resort to large importation to cope with increasing demand for food (IITA, 1995). The value of non-oil imports rose steadily from N39.64 million to N599.30 million in 1990, then to N764.20 million, N1.72 billoin, N1.79 billion and N2.09 billion in the year 2002, 2003, 2004, and 2005 respectively (World Bank, 2005). Also, between 2007 and 2010, the Nigerian government spent a whopping sum of N98 trillion on food importation (Adesina, 2011).

Inspite of laudable programmes by successive government in the past, significant volume of food is still imported annually and agricultural productivity has continued to remain low (Nweze, 2002). Nigeria, no doubt, has a landmass of 924,768 square kilometres and about 98 million hectares of land, with 74 million hectares of arable land (NPC, 2004). It is further revealed that of this arable land, only about 30 million hectares are under cultivation. It then means that the arable land would need to be increased and managed so as to raise productivity (NPC, 2004). The small-scale famers who constitute about 85% of the farmers in Nigeria occupy the vertex in the hierarchy of players in food production and produced about 90% of food consumed in the country (FAO, 1999).

In recent times the major concern of the Federal Government of Nigeria is to be self-sufficient in food production, diversify its economic base as well as achieve a sustainable economic development. To this effect, efforts are being made to revitalize the agricultural sector. In 2002, a stakeholders’ summit aimed at evaluating the agricultural sector was held, at the end of which emphasis was placed on production of sesame among other crops with high export value (Iorlamen, 2011).

Sesame is an important crop to Nigerian agriculture. It is widely used within Nigeria and is an important component of Nigeria’s agricultural exports. In Africa, Nigeria ranks second to Sudan in production and export of sesame seed, which is rated second to cocoa in export volume. Sesame from Nigeria is exported to markets in North America, Europe and East Asia. Most of the commercialized part is bulked up and exported with minimal processing limited to drying and cleaning (Raw Materials Research and Development Council Survey, 2004).

Nigeria has a great potential for production of sesame for both domestic and export markets. An estimated 3.5million hectares of the country’s agricultural land is suitablefor its production even under low input systems (Alegbejo, Iwo, Abo& Idowu,2003). Out of this, about 334,685 hectares have so far been cultivated(RMRDC, 2004).Sesame has over 15% margin in terms of value added compared to other cash cropssuch as sheanuts and palm-kernels. For instance in the year 2000, a tonne of sesame(raw seed) sold for N72,000.00 while processed oil of the same quantity sold forN350,000.00 (RMRDC, 2004).

Nutritionally, sesame seeds are rich in proteins, fats, vitamins and selenium. Apart from their commercialisation, they are also an important source of food for local families. The protein content of whole sesame range between 26% and 30% while that of the meal varies from 48% to 59%. The protein is high in methionine and essential amino acid. This is unusual for most plant proteins. The defaulted meal prepared from dehulled seed does not contain undesirable pigment. These unique properties make sesame an excellent protein source to supplement soybean, peanut and other plant proteins, which lack sufficient methionine, to increase their nutritive values (RMRDC,2004).Sesame seeds are unusually high in oil, around 50% of the seed weight, compared to 20% seed oil in soybeans. Sesame is a fairly high value food crop, being harvested both for whole seed used in baking, and for the cooking oil extracted from the seed.

In recognition of the potential of the crop to contribute significantly to improved livelihoods of rural dwellers and in turn the overall growth of the national economy, Raw Materials Research and Development Council (RMRDC) commenced the promotion of the crop through the establishment of 500ha foundation seed farms along main production centers of the crop. RMRDC also established a sesame processing plant at its technology incubation center in Lagos. Other support for promoting the crop by private operatives include Olam Nigeria Limited, one of USAID Markets key partners, which established out grower schemes involving 2,500 and 1,500 farmers in Nassarawa and Benue States respectively in 2006 (USAID, 2009).

Due to its economic importance and various uses, research work on sesame has come out with varieties which are high yielding. However, yields on farmers’ fields in Nigeria are between 500kgand 750kg per ha (RMRDC, 2004) which is low compared with yields of 1000kg and above recorded in the United State of America (USA).In the wake of a looming “global food crisis” that Nigeria is not isolated from, more emphasis is now being placed on increased domestic supplies of agricultural products. One sure way of doing this is by ensuring the efficiency of sesame farmers in their use of production inputs (Emokaro & Erhabor, 2006). A more efficient use of production inputs would ultimately impact positively on productivity and by extension, farmers’ profitability, ceteris paribus. These resource-poor smallholder farmers who contribute more than 90% of agricultural output in Nigeria in particular (FMA&WR, 2008) and Sub-Saharan Africa(Spencer, 2002) must be assisted to rise beyond the level of subsistence to higher levels of productivity through more efficient use of their production resources.

Efficiency of resource use, which is the ability to derive maximum output per unit of resource, is the key to effectively addressing the challenges of achieving food security. Raising productivity in agriculture will certainly lead to availability of food and reduce the real price of food. The question of how efficient smallholder farmer uses farm resources is of considerable interest to this study. The farm-level efficiency of smallholder resources has important implications for the agricultural development of a nation. Efficient farms make better use of available resources and produce their output at the lowest cost.

Problem Statement

One of the most difficult problem in Nigeria is how to provide good livelihood for the rural people through increased productivity of agricultural crops (Kuye, Adinya, & Inyang, 2004). It is also reported that the development of agriculture in Nigeria is not meeting the demand of the teeming population and that despite the country’s endowment with abundant and diversified range of natural, human and capital resources and oil revenue, Nigeria has remained one of the poorest nation in Africa (UNDP, 1999). The low output realised by small-scale farmers is an indication that resources utilised in production of crops are not at optimal levels (Nweze, 2002; Adinya et al., 2008). Spencer (2002) revealed that resource-poor farmers must be assisted to increase production through more efficient use of resources.

Prior to 1970s sesame seed was the number one cash crop for Benue farmers (Iorlamen, 2011). However, following the discovery of other crops like rice, groundnuts and soybean, coupled with lack of good market for sesame, its production encountered relative neglect. The result of this was decrease in its production. Farmers were only producing for local consumption and that led to sesame seed shortage which became a national challenge (Iorlamen, 2011). The full potentials of land, capital and labour resources are yet to be efficiently husbanded for optimum production of sesame. Actual yields of sesame differ significantly from potential yields, and this has been attributed to low resource productivity (FMA1995).

Studies in the past have applied the use of the Stochastic Frontier Production Function (SFPF) in estimating efficiency of resource-use for specific agricultural enterprises (Utomakili, 1992; Eze,2003; Emokaro & Erhabor, 2006; Ogundari, Ojo,& Ajibefun, 2006). The uniqueness of this research, is however, in the fact that this is the first time the SFPF would be used in estimating the efficiency of resource-use and production elasticities among sesame farmers in Benue State. Studies like Abah (2011) addressed resource use efficiency in sesame farming in Nasarawa State; Abu, Abah & Okpachu (2011) analysed the cost and return for sesame production in Nasarawa State: implication for sustainable development in Nigeria; Umar and Ibrahim (2012) assessed energy use and gross margin analysis for sesame production in organic and inorganic fertiliser user farms in Nigeria, and Imoloame, Gworgwor & Joshua(2007) evaluated weed infestation, yield and yield components as influenced by sowing method and seed rate in a Sudan Savannah agro-ecology of Nigeria with variations in techniques and results. All these studies were conducted in other places, but none in Benue State.

There is need to develop a sound knowledge of the current situation as regards sesame smallholders who form the bulk of sesame producers in Benue State of Nigeria, and most especially as regards the utilization of available resources to them.

This study, therefore, seeks to answer the following questions:

are sesame farmers technically efficient in their production?

what are the factors influencing the technical efficiency of sesame farmers in the study area?

are sesame farmers profit efficient in sesame production?

what are the factors influencing the profit efficiency of sesame farmers in the study area?

are farmers efficient in input utilization?

is sesame production a profitable enterprise in the study area?

what are the constraints to sesame production in the study area?

Objectives of the Study

The general objective of the study is to examine efficiency of resource use among sesame farmers in Benue State. Specifically, the study seeks to:

describe socio-economic characteristic of sesame farmers and their influence on

use of production resources;

ii determine the technical efficiency in sesame production;

iii examine factors influencing the technical efficiency of sesame farmers;

iv determine the gross margin of sesame production in Benue State;

v assess the profit efficiency of sesame farmers;

vi examine the determinants of profit efficiency of sesame farmers;

vi i determine the efficiency of input utilization by sesame famers;

viii dentify the problems associated with sesame production in the study area.

Statement of Hypotheses

Based on the specific objectives of the study, the following null hypotheses were tested:

Sesame famers are not technically efficient;

Socio-economic factors do not significantly influence the technical efficiency of sesame farmers in the study area;

1.5 Justification of the Study

Sesame has a large potential to enhance agribusiness development, generate income and employment opportunities that will lead to significant impact in the rural sector particularly for households in Northern Nigeria. Smallholder farmers in Nigeria are accustomed to producing low-value basic food staples for subsistence. However, faced with the increasing need to generate cash income to fulfill basic requirements and improve their livelihoods hence, increasing sesame production in rural communities will impact positively on poverty alleviation among poor resource farmers and other rural households. Also, given the importance of sesame to the Nigerian economy and international demand for it, the Federal Government of Nigeria recently launched a project “increasing sesame production for export”. Hence to farmers and farm organizations, who want to venture into sesame production will find this study very useful. To policy makers, this study will help formulate policies that will have a direct bearing on the farm which will enhance resource use efficiency, leading to greater productivity.

1.6 Limitation of the Study

Time and financial constraints were the major limitations of this study. The execution of this work required time and finance which were very limited. As a result, a random sample of 240 sesame farmers in four local government of Benue State was selected for the study. Again, in order to reduce errors in data collection, the respondents were interviewed (instead of self-administration) all through because of the importance of every information stated in the questionnaire. This made the collection of data to take more time and funds.

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