ECONOMIC EFFICIENCY AND PROFITABILITY OF CASSAVA PRODUCTION IN SOUTH EASTERN NIGERIA

ECONOMIC EFFICIENCY AND PROFITABILITY OF CASSAVA PRODUCTION IN SOUTH EASTERN NIGERIA

ABSTRACT

The study examined the economic efficiency and profitability of cassava production in southeast Nigeria. It specifically described the socio-economic characteristics of the cassava farmers, effects of socio-economic  characteristics of the farmers on the production output of early and late season farming, levels of economic efficiency of all farms, early season and late season production, assessed nature of returns to scale and of all farms early and late season cassava production, assessed  the profitability of all farms, early and late season production, ascertain the socio-economic factors of the farmers that affects economic efficiencies of all farms, early and late cassava production, and identified the constraints to cassava production in the area.  The study was necessitated by the knowledge gap created by paucity of empirical data on economic efficiency and profitability levels of cassava farmers working on both early and late season farming in the region. Five null hypotheses guided the study. Multistage random sampling technique was used to select 240 cassava farmers 120 farmers each from early season and late season producers from the 1015 registered cassava growers in the region. Primary data were collected on the 2013/2014 production season using structured questionnaire administered by personal interview. Descriptive and parametric statistics of means, percentages, ratios, net income analysis, profit function analysis and Cobb-Douglas stochastic frontier function were employed in the data analysis. Results of the analysis indicated that cassava production in the area was dominated by men (65%) with mean age of 45 years and mean farm size of 0.8 hectare. Majority attained one form of formal education or the other. Cassava production output was influenced significantly by age, educational attainment, farming experience, farm size, amount of credit obtained, cost of inputs and number of extension visits for early season farms while for late season farming, it was statistically influenced by educational attainment, farming experience, farm size, cost of inputs and extension visits. Variable costs accounted for over 96% of total cost of production with labour being the highest variable cost for early season, late season and all farms group. Cassava production in the area was profitable given the positive values of gross margin, net farm income, mean net farm income and net return on investment of N26,334,652, N24,026,340, N100,109.75 and 0.40 respectively for all farms. Net farm income per hectare for early season, late season and all farms were N85,101, N93,005 and N89,053 respectively. Test of null hypothesis indicated no significant differences in the net farm income and efficiency levels of early and late seasons production at 5% level. Profit function analysis indicated that profit was positively and significantly influenced by per unit price of output, educational level and farming experience and significantly but negatively influenced by per unit price of labour. Means economic efficiency scores for early season, late season and all farms was 0.63, 0.78and 0.76 respectively. Output elasticities with respect to land, labour and material inputs were 0.05, 0.61 and 0.42 respectively for all farms; 0.04, 0.68 and 0.36 for early season farms and 0.03, 0.70 and 0.31 for late season farms. Both early and late season farms operated at increasing returns to scale. Major constraints to cassava production in the order of seriousness were high cost of labour, inadequacy of capital, high cost of fertilizer and agrochemicals, insufficient mechanization, poor technical knowledge among others. Policy measures such as increased budgetary allocation to cassava industry, increased subsidization of inputs, provision of soft loans to cassava farmers by relevant institutions and improved funding of extension agencies to enhance information dissemination to cassava farmers, if put in place will mitigate the problems and boost cassava production in the area for self sufficiency.