ABSTRACT

The broad objective of the study was to examine the Economics of Sesame Production among small-holder famers in Benue State, Nigeria. Specifically, the study examined the socio-economic characteristics of farmers in the study area, profitability, technical, allocative and economic efficiencies and constraints of sesame production in the study area. A multi-stage sampling procedure was used to randomly select 180 farmers from 12 villages in the state. Primary data were collected using structured questionnaire and analyzed using net farm income and stochastic frontier production function. The results revealed that majority (85.6%) of the farmers were male with a mean age of 37. About 97.8% of the respondents were literate with a mean farm size of 3.13 hectares. The gross farm income, net farm income per hectare and the return per every naira invested were found to be of N121, 435.20, N67,261.95 and N1.24. Labour was the most prominent cost item and it accounts for 57.85% of the total cost. The estimate of the technical efficiency indicates that farm size was positive and statistically significant at 1% while the coefficients for fertilizer and herbicide were statistically significant at 5% and 10% level of probability. Farming experience, extension contact and membership of cooperative society were found to influence technical efficiency. The analysis of allocative efficiency revealed that seed, fertilizer and herbicide were all statistically significantly at 1%. The inefficiency model indicates that education, farming experience and extension service were significantly related to allocative efficiency. The mean technical, allocative and economic efficiencies estimates were 0.712, 0.968 and 0.689 respectively. The major problems encountered by the sesame farmers in the study area were inadequate capital (80.5%), poor market pricing (76.7%) and lack of modern cleaning facilities (73.9%). There is a need for farmers to form cooperative organisation so as improve their access to production inputs and enhance their marketing efficiency. Also, strengthening the present extension service will increase efficiency in the long term.

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CHAPTER ONE

INTRODUCTION

1.1       Background to the Study

Available statistics show that agriculture is the most important Nigerian economic

sector in terms of its contribution to the Gross Domestic Product (GDP), after oil. The

sector contributes about 41% to the country‟s GDP, employs about 65% of the total

population and provides employment to about 80% of the rural population. Agriculture

is a major source of food and meat. It is estimated that some 25 million hectares of land

are cultivated each year by small holders for food production and hence the sector plays

an important role in rural livelihood. It is estimated that it accounts for about 70% of

rural household‟s total incomes (Ogen, 2003). Agricultural growth in Nigeria is

increasingly recognized to be central to sustained improvement in economic

development. The sector plays a crucial role in food security, poverty alleviation and

human development chain in Nigeria (Aye and Oboh, 2006).

According to the Department of Agriculture, Forestry and Fisheries (2012), Smallholder

farmers are defined in various ways depending on the context, country and even

ecological zone. It is often interchangeably used with „small-scale, „resource poor‟ and

sometimes „peasant farmer‟. In general terms smallholder only refers to their limited

resource endowment relative to other farmers in the sector. It can be defined as those

farmers owning small-based plots of land on which they grow subsistence crops and one

or two cash crops relying almost exclusively on family labour.

One of the main characteristics of the production systems of smallholder farmers are

simple outdated technologies, low returns and high seasonal labour fluctuations. These

1

smallholder farmers differ in individual characteristics, farm size, resource distribution

between food and cash crops, livestock and of