ECONOMIC ANALYSIS OF ARTISANAL FISHING ENTERPRISES IN GUMA LOCAL GOVERNMENT AREA OF BENUE STATE, NIGERIA ABSTRACT: Nigerian agriculture is currently characterized by low productivity, low level of technological adoption and use of inefficient production techniques. This has resulted to reduced food production. Fishery sector in Nigeria plays an important role in terms of national food security, employment, enterprise development and foreign exchange earning. Increasing efforts to raise the productivity of fishery can be an important measure to address the problem of food insecurity as well as reduced unemployment in the country. This study examined the economics of artisanal fishing in Guma Local Government Area of Benue State. Specifically, the objectives were to determine the profitability of artisanal fishing, evaluate the effect of socio-economic characteristics and inputs on output of artisanal fishing; identify artisanal fishing practices; identify and compare constraints to the full exploitation of the potentials associated with natural fishing sites and make recommendations on ways to evolve sustainable artisanal fishing based on findings. A multistage sampling technique was used for selecting one hundred and twenty (120) respondents for the study. Data was collected by survey methods and analysed using descriptive statistics, costs and returns analysis and multiple regression. The cost and return analysis of the enterprise show that the enterprise is profitable. The double-log functional form of regression was chosen as the lead equation. Results show that the output of artisanal fishing housing is positively associated with labour, capital, operation costs, fishing experience and number of years spent in school. The t-ratio for labour, capital, operating costs, fishing experience and number of years spent in school by households are significant at 5 percent level. Results of the study also showed that 68.3 percent of the respondents fall between the ages of 26 and 45 years. 51 percent of the respondents have a fishing experience of more than 15 years while 47.5 percent have no formal education; about 65.8 percent of the respondents operate as part time fishermen; 92.5 percent have no access to agricultural credit; 65.83 percent have no access to extension services. Storage facilities are lacking or poorly developed with 70 percent of the respondents having no access to storage facilities. Based on the findings from the study, it is recommended that Adult and Nomadic Education be incorporated by policy makers for fishing communities. Strict conditions on collaterals for accessing credit by fishermen should be relaxed to enable more fishermen access loans for increased fish production. Infrastructural facilities such as schools, cold rooms and kilns be provided in fishing communities to reduce rural-urban migration and post harvest losses of fishery products. Government should provide subsidy on fishing gears and crafts to encourage artisanal fishing.TABLE OF CONTENTSPageTitle Page - - - - - - - - - iCertification - - - - - - - - - iiDedication - - - - - - - - - iiiAcknowledgment - - - - - - - - ivAbstract - - - - - - - - - viTable of Contents - - - - - - - - viiiList of Tables - - - - - - - - xList of Figures - - - - - - - - xiList of Charts - - - - - - - - xiList of Appendices - - - - - - - - xi CHAPTER ONE: INTRODUCTION 1.1 Background Information - - - - - - 11.2 Problem Statement - - - - - - - 41.3 Objectives of the Study - - - - - - 51.4 Research Hypothesis - - - - - - 61.5 Justification of the Study - - - - - - 6CHAPTER TWO: LITERATURE REVIEW2.1 Genesis of Artisanal Fishing - - - - - 92.2 Artisanal (capture) Fisheries Versus Fish Culture - - 92.3 Socio-economic Characteristics of Artisanal Fishing Operators in Relation to their Living Environment - - 102.4 Artisanal Fishing Practices in Nigeria - - - - 132.5 Fish Trade in Nigeria - - - - - - - 142.6 Problems Associated with Artisanal Fishing in Nigeria - - 162.7 Indigenous Fisheries Resource Management - - - - 172.8 Theoretical Framework on Agricultural Production - - - 182.9 Empirical Studies in Production and Economics of Fishing-Operations. - - - - - - - - - 21CHAPTER THREE: RESEARCH METHODOLOGY 3.1 The Study Area - - - - - - - 233.2 Sampling Procedure - - - - - - - 253.3 Data Collection - - - - - - - 263.4 Analysis of Data - - - - - - - 273.5 Analytical Framework - - - - - - 273.5.1 Cost and Return Analysis - - - - - - 273.5.2 Multiple Regression Analysis - - - - - 28CHAPTER FOUR: RESULTS AND DISCUSSION4.1 Socio-economic Characteristics of Respondents - - - 344.2 Fishing Activities of Respondents - - - - - 384.3 Factors Influencing Artisanal Fishing - - - - 404.4 Cost and Return Analysis in Artisanal Fishing Enterprise - - 434.5 Resource Use Efficiency in Artisanal Fishing Enterprise - - - - - - 454.6 Constraints to Exploitation of Natural Fishing Sites. - - - 49CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS 5.1 Summary of Findings - - - - - - 505.2 Conclusion - - - - - - - - 515.3 Recommendations - - - - - - - 52 REFERENCES - - - - - - - 55 APPENDICES - - - - - - - 62CHAPTER ONEINTRODUCTION1.1 Background InformationOne of the major roles played by fisheries in the economy of Nigeria is its contribution to the dietary needs of the populace. Increased food production, both in quantity and quality is necessary to build a healthy nation. Animal protein is essential for proper growth, repair and maintenance of body organs and tissues (Moses, 1983). Proteins obtained from livestock such as cattle, pigs, sheep, goats and poultry in tropical regions are generally very expensive. Fish protein contains the essential amino acids such as methionine, lysine, tryptophan which are absent in proteins of plant origin (Lawal, 2002). Fish oil contains unsaturated fatty acids, which are low in cholesterol, and thus a regular intake of fish oil harbours lower risk of heart attack, which might result from deposition of cholesterol in blood vessels. According to Madu (2000), fish is eaten all over the world and no religious or cultural restrictions are known to forbid its consumption.Lawal (2002) reported that about 35 percent of the world’s fish catch is used for the production of fishmeal and oil. The greatest amount of the products is fed to poultry. Fishmeal product has high protein content (60-75%), making it a valued ingredient usually commanding a higher price than any other protein concentrate except milk powder. Fish oil is a valuable raw material for hydrogenation and is used in direct human consumption as margarine. Most of the world’s fishmeal is made from pelagic species, rich in oil. Nigeria generates about 10 million US dollars annually in foreign exchange through the exportation of shrimps (Mabawonku, 1986). Apart from the dietary use, production of livestock feeds and earnings of foreign exchange, fisheries offer direct and indirect employment opportunities to the people of the country (Asaku, 1997). Direct employment from fisheries involves those who are directly engaged in fish production, processing and marketing. Fisheries offer indirect employment to people who are engaged in the production of fishing inputs and fishing vessels, floats, sinkers, nets, lanterns, matchets and fish finders. Others indirectly employed in fishery industry include fish canners, owners of restaurants and manufacturers of livestock feeds. The demand for fish has been rising rapidly in Nigeria as a result of increase in population, per capita income and price of alternative sources of animal protein. However the domestic supply of fish does not satisfy the demand. Attempts to meet the demand have seen the country resorting to importation of fish. The projected demand for fish in Nigeria in the year 2000 was 2,542 million tones. This figure rose to about 2854.6 million tones, an increase of about 12.3 percent in 2003 (FAO, 2004). This figure when compared with total fish supply will clearly show that there is fish demand-supply deficit in the country. Many countries both import and export fish products. Trade tends to flow not only from less developed to more developed countries, but also between developed countries (FAO, 2004). In terms of export value, the total world trade of fish and fish products reached US $ 58.2 billion in 2002 (FAO, 2004). In terms of quantity, developed countries imported over 32 million tones in 2002, of which 68 percent was for human consumption (FAO, 2004). Imports for developed countries stood at 19 million tonnes, of which 47 percent consisted of fish for food.The total quantity of international trade of fishery commodity by Nigeria as released by FAO reports (2000 and 2004) for the years 1997, 1998, 1999, 2000 and 2994 showed that imports of fishery products for the years amounted to 412,498, 442,331, 464,519, 646,557 and 814,461 tonnes respectively. This is in comparism with the export figure of 3,232, 656, 4,233, 249 and 12,016 tonnes for year 1997, 1998, 1999, 2000 and 2004 respectively (Table 1.1).Table 1.1: Total quantity of annual trade of fishery commodity by Nigeria (Metric tonnes)Year Imports Exports1997 412,498 3,2321998 442,331 6561999 464,519 4,2332000 646,557 2492004 814,461 12,016Source: FAO Reports 2000 and 2004In Nigeria, the artisanal fishery is made up of coastal canoe fishery, brackish water canoe fishery, riverine and lake canoe fishery and the flood pond fishery (Asaku, 1997). Mabawonku (1986) reported that artisanal fishery sector accounts for about 87 per cent of the total fish production in Nigeria. In Benue State, Asaku (1997) reported that the bulk of the fish supply come from fresh water systems. This bulk amounts to 98 percent while the remaining 2 percent is from culture fishery and imported frozen fish. 1.2 Problem StatementThe fisheries sector, despite being an important source of livelihood for the majority of riverine households, has been plagued by a number of problems. These include, poor and inefficient fishing gears, lack of capital, poor fisheries management, poor handling facilities, poor infrastructure and high post harvest losses (Semesi et’al, 1998). Together with lack of alternative employment opportunities and increased number of fishing households, the above mentioned problems have been the main cause of decrease in fish catch as well as degradation of fish stock and over exploitation. As a result most households will continue to be trapped in poverty. The main challenge for the growth of artisanal fisheries is how to improve production performance while at the same time, ensuring sustainable level of fisheries resources. Various initiatives have been undertaken by international organizations, governmental and non-governmental organizations in order to ensure that fishing activities bring about economic, social and nutritional benefits (Allison and Ellis, 2001). However, these initiatives did not consider the importance of artisanal households socio-economic characteristics and behaviour in their decision making process.Productivity in artisanal fishing depends on the fishing households socio-economic characteristics, technology, assets endowments (physical, financial, human and social), and available infrastructure (Gaertner et al, 1999; Salas, 2000). Although, the literature suggests a number of explanations to this phenomenon, there have been scanty empirical studies to validate these in the study area. Empirical evidence is very important in order to identify the factors that limit the productivity of artisanal fishing households so that policies can be designed to enhance profitability of the enterprise based on recent and reliable information. Therefore, measurement and analysis of artisanal fishing households performance become important. This work therefore, measures the performance of artisanal fishing households in fishing villages of Guma LGA. The work applies a production function model to determine the effect of socio-economic characteristics and fishing inputs on output of artisanal fishers 1.3 Objectives of the StudyThe broad objective of the study is economic analysis of artisanal fishing enterprise in Guma Local Government Area of Benue State.The specific objectives are to:i. describe the socio economic characteristics of artisanal fishers in the study area;ii. identify and describe major artisanal fishing practices in the study area;iii. determine the profitability of artisanal fishing in the study area;iv. determine the effect of socio-economic variables and fishing inputs on output of artisanal fishing in the study area;v. identify the constraints to the full exploitation of the potentials associated with the natural fishing sites in the study area;vi. make recommendations on the ways to improve and promote artisanal fishing in the study area.1.4 Research HypothesesBased on the research objectives, the following hypothesis will be tested:1) HO: Socio-economic variables have no significant effect on the output of fishermen. H1: Socio economic variables have significant effect on the output of fishermen.2) HO: Fishing inputs have no significant effect on the output of artisanal fishers. H1: Fishing inputs have significant effect on the output of artisanal fishers.1.5 Justification of the StudyTo conserve the country’s foreign exchange earnings, there is need to vastly reduce the share of food imports especially those that can be produced locally. Supply expansion programmes on fishery can be carried out in consideration of the abundant fishery resources all over the country. The large amount of foreign exchange hitherto spent yearly on importation of fish will be invested in other equally viable and competing demands of the nation. A transformed rural fishing programme will not only help improve the dwindling internal revenue generation of the third tier of government but will also improve the socio economic status of fishermen in the fishing communities of the study area and eradicate poverty.Very few formal publications have been identified that specifically focus on economic and financial performance of artisanal fishing enterprises in Benue State. Several studies by Lawal (2002), Asaku (1997) and Imande (1994) concentrated on Aquaculture leaving out the least expensive but naturally endowed artisanal fishery sub sector, which is more popular among the rural people. This study therefore seeks to fill this knowledge gap by identifying major factors retarding the productivity of existing water resources and how these resources can be improved or maintained for optimum productivity in the study area. This study also intends to identify ways of improving the level of fish production in the study area and Nigeria in general so as to reduce the supply-demand deficit in the state. This study will also provide information, which will guide policy makers in formulating policies that will promote the growth and development of fishery sub sector in Nigeria.This study will provide data on socio economic information about artisanal fisher folks in the study area, which will be of interest to the policy makers. The findings will also provide a clue for a transformation that can enhance the quality of life and the standard of living of the rural fishermen with resultant increase in the supply of fish/food to satisfy national macro goals and aspirations..