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


COMPARATIVE ANALYSIS OF TECHNICAL EFFICIENCY IN RICE PRODUCTION UNDER SMALL-SCALE FARMER-MANAGED IRRIGATION SYSTEM AND RAIN-FED SYSTEM IN KOGI STATE                                                           ABSTRACT:          This 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.                    TABLE OF CONTENTSCHAPTER    TITLE                                    PAGETITLE PAGE                                            ICERTIFICATION PAGE                                    IIDEDICATION                                        IIIACKNOWLEDGMENT                                    VABSTRACT                                            VCONTENTS                                            VILIST OF TABLES                                        IX    1.0    CHAPTER ONE:  INTRODUCTION                            11.1    Background to the Study                            11.2    Statement of the Problem                            51.3    Objectives of the Study                            71.4    Hypotheses of the Study                            71.5    Justification of the Study                            81.6    Limitations of the Study                            92.0    CHAPTER TWO:  LITERATURE REVIEW                    2.1    Socioeconomic Characteristics of Rice Farmers in Nigeria            102.2    Inputs Used in Rice Production in Nigeria                    122.3    Irrigation Systems on Nigerian Rice Farms                    132.4    Output, Profitability and Efficiency of Rice Production in Nigeria        172.5    Theoretical Framework                             233.0    CHAPTER THREE:  METHODOLOGY OF STUDY                33    3.1    Study Area                                     33    3.2    Sampling Technique                                34    3.3    Data Collection Method                            35    3.4     Analytical Techniques                                     36    4.0    CHAPTER FOUR:  RESULTS AND DISCUSSION                            454.1    Socio-economic Characteristics of Respondents                454.2    Levels of Input Utilization                            514.3    Determination and comparison of technical efficiencies of  rice farmers under the traditional small-scale farmer managed irrigation systems(FMIS) with the rain-fed systems in the study area                 604.4    Effects of Socio-economic variables on technical efficiency of rice in the study area                             675.0    CHAPTER FIVE: SUMMARY,  CONCLUSION AND RECOMMENDATIONS                                715.1.0    Summary                                        715.2.0    Conclusion                                        735.3.0    Recommendations                                    74REFERENCES                                        76Appendix I        Questionnaire                                88Appendix II        Test for Severity of Multicollinearity Results            94Appendix III        Results of Levene’s Test and Brown-Forsythe’s Robust Tests for Equality of Means                      95Appendix IV        Pooled MLE of the Two Systems Output from the Program Frontier                  97Appendix V        Cobb-Douglas Model: Least Squares Estimates for The Pooled Sample on The Entire Sample       102Appendix  VI        Results Of Chow-Test and Wald Test Based on The Pooled Samples’ Estimate of The Cobb-Douglas Function                103Appendix VII        Returns To Scale Based on the Coefficients From The MLE                103Appendix VIII        Results (Frontier 4.1 Output ) of M.L.E. For The Farmer Managed Irrigation System            104Appendix IX        Frontier 4.1 Output of M.L.E.  For The Rainfed System                    109Appendix X        Minitab 15.0  and MS Excel Output Showing Differences in Means Between Technical Efficiencies of FMIS and RFS                        112Appendix XI        Minitab Individual Value Plots of FMIS And RFS Technical Efficiency Estimates            113Appendix XII    Homogeneity of Variance Tests Based On Per Hectare Units in the Two Farming Systems       114Appendix  XIII    Output, Inputs And Socioeconomic Characteristics Data of the Farmers  In The Farmer Managed Irrigation System                                116Appendix XIV    Output, Inputs and Socioeconomic Characteristics Data of The Farmers in the Rain-Fed System    119Appendix XV        Determination of Approximate Volume of Water Used by Farmers in FMIS                    120CHAPTER ONE1.0    INTRODUCTION1.1 Background to the studyRice 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 ProblemCentral 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 StudyIt 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 StudyUnder 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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COMPARATIVE ANALYSIS OF TECHNICAL EFFICIENCY IN RICE PRODUCTION UNDER SMALL-SCALE FARMER-MANAGED IRRIGATION SYSTEM AND RAIN-FED SYSTEM IN KOGI STATE



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