RESOURCE USE EFFICIENCY AMONG FADAMA CROP FARMERS IN IBADAN AND IBARAPA AGRICULTURAL ZONE OF OYO STATE, NIGERIA ABSTRACT: The study investigated the resource use efficiency among Fadama crop farmers in Ibadan Ibarapa agricultural zone of Oyo state, Nigeria. Data were collected from 120 respondents who were randomly selected and interviewed using both interview schedule and questionnaire. The data collected were presented using percentage and means. The findings o revealed that there was no significant difference in the productivity between Fadama and non fadama (soko) farmers, while there was a significant difference between the productivity of Fadama and non fadama (watermelon) farmers as well as Fadama and non fadama maize farmers.The gross margin analysis of Fadama and non Fadama crop farmers revealed that Fadama soko farmers and Fadama maize farmers were more profitable than the non Fadama farmers in the area. For watermelon, the non fadama farmers were more profitable because they had higher output. The findings also revealed that labour, fertilizer, insecticides and seed influenced the technical efficiency of soko farmers. Herbicides and insecticides influenced the technical efficiency of watermelon farmers, while labour, insecticide and seed influenced the technical efficiency of maize farmers. The positive coefficient for age variable implies that the older farmers were more technically inefficient than theyounger ones. Also negative coefficient for education implies that the farmers level of technicalinefficiency declined with more education. With regards to farmer-specific factors, especially education, there is the need for policyto promote formal education as a means of enhancing efficiency in production over the long-term period. This is because it would enable farmers make better technical decision and also help in allocatingtheir production inputs effectively. In the short-term, informal extension education could beeffective, especially when targeted at farmers who have had limited formal educationalopportunities.The coefficient of farming experience was estimated to be negative as expected andstatistically significant at the 5-percent level. The implication is that farmers with more years offarming experience tend to be more efficient in crop production. It is possible that such farmers gained more years of farmingexperience through “learning by doing,” and thereby becoming more efficient.The study also found that farmers under Fadama harvested more per unit ofland of output of crop than nonfadama farmers for soko and maizeand this confirms the hypothesis that programme intervention has the capacity to succor farm production problems while accruing more income to farmers. CHAPTER ONE INTRODUCTION1.1 Background InformationSmallholder agriculture is the dominant occupation of rural Nigerians which is mainly rain-fed. Yet, Nigeria has a potential comparative advantage in the production of a variety of fresh and processed high value crops, especially vegetables during the dry season and livestock product (meat and milk) through out the year. This is because the country is endowed with underground and surface water reserves, rich pastures and favourable agro-ecological conditions in the country's low-lying plains with alluvial deposit called fadama. Agriculture constitutes a significant sector of Nigeria's economy. The sector is significant in terms of employment generation, contribution to Gross Domestic Product (GDP) and until early 1970, agricultural exports were the main sources of foreign exchange earnings (Amaza and Olayemi, 2002). During the 1960s, the growth of the Nigerian economy was derived mainly from the agricultural sector. However, in more recent years,there has been a marked decline in the performance of Nigeria's agriculture. National Gross Domestic Product (GDP), declined from 62% in the 1960s to 47.9% in the 1970s, down to a low 19% in 1980’s, but following the SAP, this share was turned around in the 1990’s rising steadily to 38% in 1994, 39.2% in 1997 and 41.3% in 2000 (Ndubuizu, 2003). The agricultural sector's changing share of GDP is partly a reflection of the relative productivity of the sector. Farm incomes are generally very low due to declining productivity(World Bank, 1996). The low farm income, resulting from declining productivity in the agricultural sector, could be attributed to the dependence on rainfall for production in some parts of the country, the scarcity of which becomes a critical limiting factor to all-year-round cultivation.In addition, increased agricultural production is necessary to meet the needs of the increasing population.Given this situation, it is quite important for resource to be used at their most efficient levels. Resource productivity is thus an important matter in determining the sustainability of agricultural production. This cannot be attained without recourse to supplementary irrigation for the major food production areas of the country (Adeolu and Taiwo, 2004), hence, the need for the initiation and implementation of the National Fadama Development Project (NFDP) in the country.‘Fadama’ is a Hausa name for ‘wetlands’, and means ‘Akuro’ or ‘Abata’ in the Yoruba language. These are low-lying flood plains with easily accessible shallow ground water. Though the surfaces of these flood plains become dry during the dry seasons, appreciable amounts of water can be trapped from shallow aquifers that abound around the plains (leading to the development of tube wells by drilling). The water obtained from the tube wells is used for the development of small-scale irrigation schemes to boost dry season crops production (NFDO, 2007)Fadama is an integrated approach which came into being as a result of the failure of agriculturalproductivity, to achieve rural development and food security objectives of government.Fadama farmers are those who utilize the resources provided by fadama on a sustatainable basis. They benefit under the project by Community Driven Development approach, through the preparation of Local Development Plan. The Community Driven Development (CDD) approach is a bottom-top approach for the development of agricultural enterprise, there is a high sense of belonging by the beneficiaries because the communities take responsibility for designing, implementing, operating and maintaining sub-projects prioritized in their Local Development Plans. The National Fadama Development Project is a major instrument for achieving the Government's poverty reduction objective in the rural areas of Nigeria. First National Fadama Development project (NFDP I) was designed in the early 1990s to promote simple and low-cost improved irrigation technology under the World Bank. The first phase of the National Fadama Development Project (NFDP1) was between 1993-1999. The sector goal is to reduce poverty by improving the living conditions of the rural poor, contribute to food security and increase access to rural infrastructure. The project objective is to enhance agricultural production, productivity and value addition for smallholders and rural entrepreneurs in Fadama areas on a sustainable basis. The main features of the project are to support the provision of marketing infrastructure, empowering stakeholders, improving mechanism for conflict resolution, support establishment of rural and non- farm enterprises, support improved management and increase food production in the Fadama areas. The Project enables Fadama Resource Users to adopted output enhancing techniques and more effective marketing practices, it finances Fadama road improvement and rehabilitation, service centers, market infrastructure , drainages of boreholes and cold rooms. At the completion of the project’s first phasein 2001, the Nigerian government adopted new rural development strategies to address most of the discovered flaws and constraints. The new strategy, which was in line with the African Development Bank’s strategic plan, had as its focus a number of approaches to development. The plan stressed the need for consistency, sustainability, and greater equity in the access to benefits of the land resources in Fadama areas of the country. Consequently, the Bank found it necessary to agree to the Nigerian government’s request for funding phase II of the project, not only as a follow-up to Phase I but also to expand it in scope and size (NFDP Appraisal Report, 2003). The second National Fadama Development Project (NFDP II) is an improvement over the key lessons learnt from the first phase of Fadama Development Project. The project facilitates access to financial resources to support small scale producers and other fadama user groups to diversify their production and incomes.The components of the project are capacity building, rural infrastructure investment, pilot capital asset acquisition support, demand driven advisory service and project management. It is funded multilaterally by the World Bank, Federal Government of Nigeria, State Government, participating Local Government Councils and the Benefiting Communities.( Review of report of Fadma II sub projects in Oyo state 2006)One way peasant farmers can achieve sustainable agricultural development is to raise the productivity of their farm by improving efficiency within the limits of the existing resource base and available technology. Efficient use of various inputs is an important part of sustainability (Harwood, 1987) which implies either fewer inputs to produce the same level of output or higher output at the same level of inputs. An increase in efficiency in food crop production could lead to an improvement in the welfare of farmers and consequently a reduction in their poverty level and food insecurity. Over the years the production pattern of crop has been fluctuating due to government intervention and the environmental conditions under which production take place. This fluctuation in production output has had serious implications not only in farmers income but also in the ability to use available resource efficiently. It is therefore necessary to examine and establish a trend in the use of farm inputs so as to be able to evolve policies that would help in increasing the trend of production and also ensuring stability in the farmers income through an effective use of the limited farm resources.1.2 Statement of the Problem One peculiar paradox of poverty in Nigeria is that of poverty in the midst of plenty (World Bank 2003). Despite the rich endowment of Nigeria, especially rural Nigeria, with abundant natural and human resources, poverty is more acute in the rural area where about 70% of the total population live (National Population Commission(NPC), 2005).The Nigerian economy is based on oil while its agricultural sector is being neglected.The farmers in the rural communities still depend on the same techniques handed down from generation of traditional practices and without the financial means of expanding production and adoption of modern farm innovations. It is becoming difficult to increase employment in agriculture. Crop residue and animal dung are increasingly being used as fuel for cooking rather than for enriching the soil as is practiced in traditional agriculture system. On the evaluation of success of Fadama 1, it was learnt that the phase 1 failed to attend to some key sectors of the economy. Fadama 1 project majorly helped producers increase output, but not to store, preserve and market their surpluses. As a result, much of the output was either not sold at all or sold at low prices due to supply glut (World Bank, 2003).Fadama 1also gave little support to the establishment of rural non – farm enterprises. It narrowly focused on crop production neglecting opportunities to add values through processing and other activities.Competition for the use of water between farmers and other informal entrepreneurs such as block moulding companies has become more intense. Lack of knowledge in economic use of irrigation water has led to considerable inefficiency among farm operators A series of studies has been carried out to assessresource use and agricultural productivity including;Fasasi 2006; Shapiro, (1983);Ogunjobi, 1999;Fakayode and Omotosho 2000;Ohajianya, 2003,Abang and Agom 2004,Moses and Adebayo 2007.These studies did not consider the contribution of programme intervention to efficiency and productivity in crop production. Programmes like Root and Tuber Expansion Project (RTEP) formulated between 1995 and 1997, National Fadama Developmental Project(NFDP)and “Presidential Initiatives on food Cropshave been used to induce farmers to achieve high productivity.Furthermore various studies like, Harry and Bruce (2004)., Adeleke, Adelalu, Matanmi and Olaniyi (2008).examineddifferentials between male and female productivity. Also Yang (2007) examineddifferentials between wage and productivity. Little effort has been made to determine the productivity differentials between beneficiaries and non beneficiaries of programme interventions. Such study on productivity differentials is needed, in order to evaluate success or otherwise of programmes in the agricultural sector. This study thus seeks to provide answers to the following research questions. Is fadama crop production a profitable venture? Could the decline in crop production be attributed to inefficiency in the use of resources? What are the problems affecting fadama crop production?Will efficient utilization of resource increase farmers production? This study will examine efficiency differentials among farming households within and outside the fadama programme.1.3 Objectives of the StudyThe broad objective of this study is to investigate the resource use efficiency among Fadama farmers in Ibadan/Ibarapa agricultural zone of Oyo state. The specific objectives are to:i describe the socio-economic characteristics of the farmers in the study areaii analyse resource productivity of Fadama farmers vis-a vis non Fadama farmersiii estimate the cost and returns to crop farmingiv estimate the technical efficiency for the crop farmersv identify the constraints to participation in the fadama project in the study areavi make recommendations based on the research results Hypothesis of the Study The null hypothesis to be tested are;i there is no significant difference between the output/resource use of beneficiaries and non beneficiaries of the fadama programmeii the socio- economic characteristics of farmers do not significantly influence technical efficiency among each group of farmers.1.5 Justification of the Study As a result of increase in population there is need to in agricultural production; this can be done by improving productivity and efficiency.One of the ways to increase productivity will be through efficient use of resource on the farm.Efficiency improvement will help in achieving the millennium development goal of eradicating extreme poverty. This study is justified since its findings will provide relevant information on whether resources are effectively utilized or not, and to determine if it is profitable to invest in fadama farming.The motivation for the study derives from the fact that it will provide information on whether fadama participants have increased their income as a result of their participation in the project. The study will also identify the constraints militating against effective utilization of resource. In order to achieve optimum production level, resource must be available and whatever quantities of available resources must be used efficiently.The study will provide information` on the cost incurred and returns that accrued to fadama farmers.The findings of this study will be of benefit to policy makers to develop appropriate steps and programme on efficient utilization of resource..