EFFECT OF WORLD BANK ASSISTED COMMERCIAL AGRICULTURE DEVELOPMENT PROJECT ON RICE FARMERS’ PRODUCTIVITY AND PROFITABILITY IN BADAGRY LAGOS STATE

EFFECT OF WORLD BANK ASSISTED COMMERCIAL AGRICULTURE DEVELOPMENT PROJECT ON RICE FARMERS’ PRODUCTIVITY AND PROFITABILITY IN BADAGRY LAGOS STATE

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ABSTRACT

This research work evaluated the effect of the World Bank Assisted Commercial Agricultural Development Project on rice farmers’ productivity and profitability in Badagry of Lagos state with a view to ascertain the availability of the intervention variables, their effects on farmers’ productivity, profitability and constraint that may be militating against the desired result. In pursuant of these objectives,  a sample size of 134 of registered rice farmers was used and survey research method was adopted. Data collected through questionnaire were presented in tables and analyzed. The hypotheses were tested using T-test and the rice farmers’ productivity and profitability during the first three years of the project were compared with the last three years before the inception of the project. The findings revealed among others the availability of the  intervention variables and confirms the fact that the World Bank assisted CADP has done well in some areas like the provision of access road, erosion control measures and farmers’ training and supervision by extension officers.  This reflects the first objective of the study which is to confirm the availability of the intervention variables. Also, Productivity and profitability increased more during the CADP period than the pre-CADP period. This reflects the second objective which is to determine the effects if any of the World Bank Assisted CADP on rice farmers productivity and profitability in Badagry of Lagos state. However, areas like the provision of revolving loan for farmers, improved variety of rice seedling, modern farming techniques, fertilizers, pesticides and herbicides were abandoned and therefore need improvement. These are some of the constraints that may be militating against the desired result that were sought to confirm in the third objective. Hypothesis 1 tested shows that the alternate hypothesis which states that Rice farmers in Badagry local government of Lagos state have benefitted immensely from the World Bank Assisted Commercial Agriculture Development Project ,hence, there is positive effect on rice farmers’ productivity and profitability is accepted and the null hypothesis reject .Also, in hypothesis 2 the alternate hypothesis which states  that  the World Bank Assisted Commercial Agriculture Development Project has made some significant effects on rice farmers’ productivity and profitability in Badagry local government of Lagos state is accepted and the null hypothesis rejected. Based on the findings, the major recommendations are: That trained extension officers should be encouraged to continue with their supervisory roles to the farmers. The modern farming techniques and practices should be taught the farmers to enable them keep abreast with the current practices of increasing output. There should be availability of credit facilities for the farmers to enable them run their business. The provision of infrastructure should be encouraged especially in the area of provision of erosion and irrigation control as this will encourage all year round farming.  There should be proper monitoring of this project to ensure compliance and proper implementation of the policies and monies mapped out for the project should be judiciously used and accounted for.


 CHAPTER ONE- INTRODUCTION

1.1    BACKGROUND OF THE STUDY

In spite of the ascendancy of oil in Nigeria’s economy, agriculture still plays a vital role in stimulating economic growth and development in the Country. It provides employment to over seventy percent of the labour force (Abayomi, 2006).  However, it has been noticed that from the 1970’s till date, agriculture’s contribution to the economy has been on the decline, contributing 34 percent to Nigeria’s GDP in 2006 (CBN, 2007) and 21.97 percent in 2013 (NBS,2014).

Worried by the steady decline in the percentage contribution of agriculture to the GDP,   government has continued to embark on series of programmes, strategies and policies to remedy the worsening situation in Nigeria. In 1976 for instance, Operation Feed the Nation (OFN) programme was launched to encourage the people to pay greater attention in mobilizing internal resources for domestic agricultural production. This programme did not make sufficient impact in increasing food production and GDP. It however increased awareness on the need for increased food production (Obadan, 1990). In 1980, the Green Revolution programme (GRP) was launched to replace OFN, with the aim of enhancing food sufficiency in agricultural food production, reducing import food price inflation. This programme again achieved little in terms of its impact on GDP and could not achieve its aims and objectives. With the introduction of structural adjustment programme in 1986, a lot of policy packages and programmes were introduced among which were the World Bank-assisted Agricultural Development Project (ADP), Directorate of Food, Roads and Rural Infrastructures (DFRRI) and National Agricultural Land Development Authority (NALDA). In addition to these programmes other schemes such as River Basin Development Authority were introduced. All these measures aimed at increasing agricultural production had little success in northern Nigeria but failed in southern part of the country (Abayomi, 2006). However, it was during this period of SAP that agricultural production attained the highest growth rate of 5.0 percent (CBN, 2007). Other measures aimed at increasing agricultural output were in terms of credit schemes; there was the establishment of Nigerian Agricultural Cooperative Bank in 1973, establishment of Rural Banking programme in 1977. These entire credit schemes were made to allocate more funds to rural farmers with the intention of increasing food supply. Still on this scheme, Central Bank of Nigeria (CBN) prescribed different lending rates for agricultural sector with lower interest rate enjoyed by farmers. In the year 2004, the president of Nigeria together with some African countries’ leaders launched New Partnership for Africa’s Development (NEPAD), whose objective was to reduce hunger and poverty.

Agriculture was seen as the engine of growth to propel African economies out of hunger and poverty. The main instrument for achieving this was a Comprehensive African Agriculture Development Programme (CAADP).

As part of its efforts to develop agriculture in Nigeria, the ministry of agriculture initiated the Commercial Agriculture Development Project in 2009. Commercial Agriculture Development Project (CADP) is aimed at improving agricultural production in Nigeria by supporting the commercialization of agriculture production, processing and marketing outputs among small and medium-scale commercial farmers and agro-processors(Commercial Agriculture Development News;2012). CADP is supporting the federal government of Nigeria’s strategy options on diversifying into non-oil sources of growth and away from over dependence on oil and gas. To achieve the above objectives, the project is to help to improve access of participating commercial farmers to new technologies, improved infrastructures, finances and output markets, to strengthening agricultural production systems and facilitate access to market for some targeted value chains among small and medium scale commercial farmers in five participating states, Cross River, Enugu, Kaduna, Kano, and Lagos.

These value chains are rice, oil palm, cocoa, fruits trees, poultry production, aquaculture and dairy with maize and rice as staples.

The inclusion of rice and maize as staples may be due to the steady decline in the production in cereals over the years. According to Akanni and Okeowo(2011), despite the numerous policy options and attempts by government in the production sector, there has been steady decline in the output of cereals between 1970 and 2007. Similarly, the land area under cultivation of cereals also declined so tremendously due largely to reduction in the size and technology of the farming population and poor soil fertility levels. The producer price for the cereals had risen sharply particularly within the past twenty years.

According to a former Nigeria’s minister of agriculture, Dr Akinwumi, Ayodeji, Adesina , about N365 billion is spent on rice importation annually. In spite of this, rice producers in the country are still unable to meet local demand, meaning that at least an average of N1 billion worth of rice is demanded daily.

The project has two components:  (1) Technology demonstration which provides resources to facilitate adoption of technologies and supports staple crop production systems which will compliment Nigeria’s food security initiative and develop domestic and export markets and (2) Adoption and Support to staple crop production(Commercial Agriculture Development Project, News 2012). This project is with the support of the world bank which has been in the centre of Nigeria’s agricultural development for many years.

Since 1974 the Bank has committed $ 1.2 Billion for agricultural projects (ADPs) to increase farm production and welfare among smallholders in Nigeria. According to OED, out of the five ADPs and a supporting Agricultural Technical Assistance Project (ATP), all implemented between 1979 and 1990, only two had satisfactory outcomes. In general, rain-fed agricultural production was far below projections. Macroeconomic conditions, some national policies, and particular – design and implementation problems prevented a more significant impact. Low- cost irrigated development of lowland areas (Fadama) was, however quite successful. Village water supply components exceeded their targets. The ADPs have evolved to be “Permanent” institutions for rural infrastructural development and agricultural devices  even though  their role vis –a- vis the regular State department needs to be reviewed.

The World bank has assisted the Agricultural Development Projects (ADPs) in the 19 States of Nigeria between 1979 – 1989 and also championed Agricultural Development Programme in Nigeria in form of foreign aid. The programme which started with emphasis on increased food production, was conceived in 1972 and effectively commenced in 1975 in the Northern  enclave ( experiment) areas of Funtua, and Guzau  ( Abah, 2011).

The success of these experiments led to the establishment of State Wide projects in Kaduna, Sokoto and Bauchi as off-shoot, the multi-state ADPs designed by the Federal Government Agricultural coordinating (Anambra, Bendel, Cross River, Imo, Ogun, Benue and Plateau States of Nigeria) ( Chukwuemeka-2004).

The World Bank has pledged its assistance to Nigeria’s Commercial Agriculture Development Project (CADP) to help her become one of the world’s food exporters again. This it hoped to achieve through the area of facilitating timely disbursement of funds to beneficiaries as a way of balancing work quality with better results. The $150million CADP is being implemented in Kano, Kaduna, Lagos, Cross River and Enugu states.

Badagry rice farm in Lagos state is one of the communities covered under the CADP as Lagos state is one of beneficiaries of this project. The farmers in the area are mostly fishermen, also arable crops like maize, yams, cocoyam, oil palm and cassava are probably the most cultivated as it could be planted and harvested throughout the year among other varieties of crops. The rice farm in the area is thriving very well as farmers are struggling to meet up with demand.

According to Ibrahim Iroko, the president of the rice farmers association in Itoga Badagry, after harvesting and processing the rice, everything produced is bought off immediately by bulk buyers and production can be increased if many of their challenges are taken care of. These challenges faced by the rice farmers included unavailability of tractors, harvesters, boom sprayers which is needed to spray the farm and kill weeds at the early stage. Also, there is the challenge of unavailability of irrigation facilities to curb the effect of climate change and also need for increased working capital.

Nigeria is a middle income, mixed economy and emerging market with expanding financial service, communications, technology and entertainment sectors. It is ranked as the 21st largest economy in the world in terms of nominal GDP and the 20th largest in terms of purchasing power parity. Currently, it is the largest economy in Africa, its re-emergent through currently under performing manufacturing sector is the third largest on the continent and produces a larger proportion of goods and services for the West African sub region. Nigeria recently changed its economic analysis to account for the rapidly growing contributors to its GDP such as telecommunication, banking and its film industry.

Previously hindered by years of mismanagement, economic reforms of the past decade have put Nigeria back on track towards achieving it full economic potential. Nigeria GDP at purchasing power (PPP) has almost tripled from 170 billion dollar in 2000 to 541 billion dollars in 2002, although estimates of the size of the informal sector (which is included in the official figures) put the actual numbers closer to 630 billion dollars. Correspondingly, the GDP per capital doubled from 1400 dollar per person in 2000 to an estimated 2800 dollar per person in 2012 (again with the inclusion of the informal sector, it is estimated from 120 million in 2000 to 160 million in 2010). These figures are to be revised upwards by as much as 80% when metrics are recalculated subsequent to the rebasing of its economy in April 2014.

Although much has been made of its status as a major exporter of oil, Nigeria produces only about 2.7% of the world’s supply(Saudi Arabia:12.9, Russia:12.7%,U.S.A:8.6%). To put oil revenue in perspective at an estimated export rate of 1.9 mbbl/d (300,000 m3/d), with a projected sales price of 65 dollar per barrel in 2011. Nigeria’s anticipated revenue from petroleum is about 52.2 billion dollars (2012 GDP: 451 billion dollars). This accounts for about 11% of official GDP figures (and drops to 80% when the informal economy is included in the circulation).

Therefore, though the petroleum sector is important, it remains in fact a small part of the country’s overall vibrant and diversified economy.

The largely subsistence agricultural sector has not kept up with rapid population growth and Nigeria, once a large net exporter of food, now imports a large quantity of its food products though there is a resurgence in manufacturing and exporting of food products.

According to a citigroup report published in February 2011, Nigeria will get the highest average GDP growth in the world between 2010 and 2050. Nigeria is one of two countries in Africa among 11 Global Growth Generators Countries.

1.2   STATEMENT OF THE PROBLEM

Nigerian economy during the first decade after independence could be described as an agricultural economy because agriculture served as the engine of growth of the overall economy (Ogen, 2003). The sector during that period contributed about 50 per cent to the Nigeria GDP.

Since the discovery of oil in Nigeria, the agricultural sector has suffered a lot of neglect as the government has shifted interest mainly to oil exploration. The neglect of the agricultural sector and the dependence of Nigeria on a mono-cultural, crude-based economy have not augured well with the well-being of the Nigerian economy (Fasipe, 1990).  This  has resulted to Nigeria being a mono-economy and thus increase in poverty and hunger. The neglect of the agricultural sector poses great danger to food security and economic development. Despite the challenges faced by the agricultural sector, it still remains the major sector upon which the majority of the rural poor in Nigeria depend. Over 70 percent of the active labour force is employed in agriculture and the sector contributed 21.97 percent of the GDP in 2013(NBS, 2014).  The problem of sustainable agricultural production in Nigeria has assumed greater importance than ever before especially with the ever increasing population. The rate of growth of agricultural production in Nigeria should increase in order to mitigate hunger, starvation, disease, raw material, dependence on foreign sources and food importation as well as to improve the quality and quantity of food per person. In recognition of this fact, the Nigerian government has since started putting efforts to boost agriculture production through assistance to farmers, and yet no visible impact on agricultural productivity has been seen.

According to Onyeahialam (2002), for more than two decades now the agricultural sector of the Nigerian economy has continued to perform below expectation despite the huge sums of money being allocated to the sector in each year’s budget. In 2002, about N9.874 billion was mapped out for the sector (Obasanjo, 2002). Also, during the same year, 72 million dollars donated by Food and Agricultural Organization (FAO) were distributed to the 36 states of the Federation in addition to the year’s allocation (Iheagu,2002). According to Iheagu (2002), the money cannot be said to have been justifiably used rather, what one sees is the prevalent poor attitude of the government to the execution of agricultural programmes.

The World Bank Assisted Commercial Agriculture Development Project which took off in 2009 in Nigeria was another attempt aimed at improving agriculture production, processing and marketing outputs among small and media scale commercial farmers and agro processors. To achieve the above objectives, the project will help to improve access of participating commercial farmers to new technologies, improved infrastructures, finances and output markets to strengthening agricultural production systems and facilitate access to market for some targeted value chains such as rice among small and medium scale commercial farmers in the participating states. The project is to help in providing improved variety of rice seedlings and seed multiplication. Also it will help in providing the required equipment for rice farming and processing, chemicals for killing weeds and pests and also finance for expansion.

Prior to this project in 2009, rice farming in Badagry has been a difficult process as the farmers struggle to meet up with the local demand. Their production is never enough as the rice they produce are bought off by the bulk buyers immediately after processing. This is due to so many challenges the farmers faced which included unavailability of improved variety of rice seedlings, tractors, irrigation infrastructures, pesticides and finance needed for expansion.

 This has led to insufficiency in rice production and Nigeria spends so much money on the importation of rice into the country.

However, since the inception of this project scheme with assistance in these areas of need  aimed towards boosting rice production and reduction on the volume of importation, no evaluation has been carried out or published to evaluate its performance with a view to ensure effective implementation of the strategies and policies of the project especially on rice production which will ensure farmers’ productivity and profitability.  This situation raises questions as to the impact of this scheme which was established in the belief that such project would radically transform agriculture and increase the Country’s food and fiber needs of the rapidly increasing population. This study therefore becomes necessary in order to evaluate  the effect of the project on rice farmers’ productivity and profitability in Badagry local government area of Lagos state from 2009 till 2013 as Badagry rice farm was one of the beneficiaries of the World Bank assistance.

1.3   AIM OF THE STUDY

The broad objective of this study is to investigate how the sum of the intervention variables have affected farmer’s productivity, profit making and post-harvest losses if any.

1.4 SPECIFIC OBJECTIVES OF THE STUDY

These include:

i. to confirm the availability of the intervention variables by the World Bank to the rice farmers in Badagry .

ii. to determine the effects if any of the World Bank  Assisted Commercial Agriculture Development on  rice  farmers productivity and profitability in Badagry of Lagos state.

iii. to determine the constraints that may be militating against the desired result of this    

    World Bank assisted project.

1.5. RESEARCH QUESTIONS

i. What are the intervention variables and the sizes to commercial rice farmers in Badagry ?.

ii. What are the effects of the World Bank Assisted Commercial Agriculture Development Project on rice farmers’ productivity and profitability in Badagry ?.

iii. What are the constraints that may be militating against the desired result from this World

Bank Assisted Project ?.

1.6. HYPOTHESIS 

Hypothesis 1

Ho: The rice farmers in Badagry local government area of Lagos state have not benefitted much from the World Bank Assisted Commercial Agriculture Development Project, hence there is no positive effect on rice farmers’ productivity and profitability.

Hi:  Rice farmers in Badagry local government of Lagos state have benefitted immensely from the World Bank Assisted Commercial Agriculture Development Project ,hence, there is positive effect on rice farmers’ productivity and profitability.

Hypothesis 2

 Ho:  There is no significant effect made by the World Bank Assisted Commercial Agriculture Development Project on rice farmers’ productivity and profitability in Badagry local government of Lagos state.

Hi:   The World Bank Assisted Commercial Agriculture Development Project has made some significant effects on rice farmers’ productivity and profitability in Badagry local government of Lagos state.

1.7   SIGNIFICANCE OF THE STUDY

There is a need to study periodically, the various agricultural development projects set up by the Federal government of Nigeria with a view to assess how well they are being implemented and their effects on the sector. It may be possible that the results of such empirical studies may lead to the reformation of policies and strategies.

The World Bank Assisted Commercial Agriculture Development Project developed in 2009 by the Federal government is one such project. Given the huge amount of fund that was mapped out for this project and its expected contribution to the agricultural sector and the economy at large, there is urgent need to study the effects to the sector.

With Lagos state as one of the beneficiaries and rice farming one of the key areas of interest, this study will highlight the various assistance  to commercial rice farmers in Badagry local government area by the World Bank through this project. An impact analysis of the project on rice farming will be made through this study. This may be a mirage if these projections are not backed up by robust data. This study will provide relevant data and recommendations to the World Bank and the Ministry of Agriculture on other forms and sizes of assistance to the farmers which will serve as a guide to future assistance scheme to other states in Nigeria especially those where the project is yet to take off.

1.8    SCOPE OF THE STUDY

 This study will cover only the rice farming period of between 2009 till 2012 of which farmers productivity, profit-making and may be post –harvest losses if any will be compared with four seasons before this period and the survey will involve only the registered rice farmers as at 2006 and who have being in rice farming for at least three farming seasons before 2009 in Badagry of Lagos state.




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