T.\RABA JOURNAL OF AGRICULTURAL RESEARCHN: 978·978·923·450·9

Email: tajar2011@yahoo.com.tajar2011@gmai1.comCujar publication 2013

PRODUCTIVITY AND PROFITABILITY ANALYSIS OF CASSAVA PRODUCTION IN TARABA STATE

Aboki, E., A. D. Barau and J. ReubenDepartment of Agricultural Economics and Extension, Taraba State University, Jalingo

tracttudy examined resource productivity and profitability of cassava production in Taraba State. Purposive sampling method was used to select

ava farmers in the study area. Relevant information on inputs used and outputs realized in cassava production were collected from cassavausing structured questionnaire. The data generated were analyzed using stochastic frontier production function, total factor productivity,- use efficiency and gross margin analysis. The estimated gamma parameter of stochastic frontier production showed that about 92%in output among cassava fanners in the study area was due to differences in technical efficiency. The estimated elasticities of production

_;;';;;l respect to farm size, family labour, hired labour and fertilizer were statistically significant at I% and 5% level of significance respectively.factor productivity (TFP) indicated that the combined factor inputs used in cassava production in the study area had a positive effect on

output. Cassava production enterprise in the State was found to be profitable with a gross margin of N 413,300. Estimated return per Naira~ 115 52 kobo. The results indicated that family labour, hired labour, land preparation and cassava stem were under-utilized while land and

'ere over - utilized. It is thus recommended that farmers should be encouraged to adopt more intensive cultural practices instead of.;;.;II=..a:1 expansion in land put to cassava production.

: Productivity, Profitability, Resource-use Efficiency_~!'SI::ti-on will stimulate domestic production (CBN, 2011). In

- an important food crop grown in almost all 2002 Nigeria adopted a policy compelling flour millsigeria. Its production takes place from the to implement the 10 percent cassava flour component

It to the savanna region of the country as in wheat flour for bread production. This policy.=II:C:lx:5 - your its growth. It is an important staple backed by improved varieties from llT A raised

heap source of carbohydrate to rural and cassava production by 10 million tons between 2002- 'ellers with demand for the commod ity and 2008 (lIT A, 2009). In view of this development,

':::;::~lS-ingwith increases in population and industrial the role of increased efficiency and productivity ofCassava does not only serve as food crop, it is a cassava farms is no longer debatable but a great

ource of income and employment for rural necessity for small holder farms in Taraba State.fuc:s;:::ilolds in Nigeria (Ogundari et al., 2006). As a Productivity is defined as the ratio of output

m cassava has some inherent characteristics produced to the inputs used (Coelli, eta!.,1998)._ make it attractive especially to the small holder Productivity and resource allocation are important

in igeria. Firstly, it is rich in carbohydrates, aspects of increased food production (Ogunniyi,~~c~'a1ly starch, and consequently has multiplicity of 2009). Major motivations for productivity are

econdly, it is available all the year round, profitability and efficiency. Efficient of resourceeaper and thus more preferred to other allocation at the farm level has great implication for

. . tolerant to low soil fertility and national development It will lead to rise in Gross':::!!.s:c. drought Currently, Nigeria is the National Product (GNP) and consequently, increase in

F:.;o.;.(n;:cr of cassava in the world with an per capita income. Profit maxirnization may not be theu tion of about 37 million metric tons of primary aim of small scale farms for many reasons,

-:::::~:lC5 roots (CBN, 2011, FAOSTAT, 2012). Total but all the same, in the long run, farmers are stillted in 2011 was 3.21 million hectares with interested in knowing how much they have given up

ge ield of 11.7 tons per hectare. It is to meet other goals (Adegeye and Dittoh, 1985., Onuj;r..~;':U.Ipredominantly (99%) by small scale farmers and Edon, 2009)

-:. ha of land intercropped with yams, maize or It is believed that assessment of productivity,in the rain forest and savannah agro- profitability and resource- use efficiency level ofof southern, Central and Northern Nigeria. cassava farmers in Taraba State will enable one to

Cassava tubers are mostly processed into make policy recommendations for greater efficiency. gari, and fufu in Nigeria. It can be and productivity. The broad objective of the study was- d. pounded or consumed in its raw to assess the productivity and profitability of cassava

the case of sweet and cinade free sweet production in Taraba State. The specific objectives of'I:l'!~:;-j~-. Cassava has become a regular item in the study were to: (i) determine the technical

- old diets in Nigeria (Ogundari et al., 2006). relationship between the inputs used and the outputsop has achieved an export status because of the realized in cassava production; (ii) estimate the totaling demand for it as industrial raw material, To factor productivity in cassava production in the study

both export and domestic demand, Nigeria needs area; (iii) determine the resource -use efficiency levelsproduce about 150 metric tons of cassava per of factor inputs in cassava production in the studyurn. This has prompted the Federal Government area, and (iv) estimate the profitability level of the

igeria to come out with a policy on cassava cassava production enterprise among cassava farmersroduction with a view to developing strategies that in Taraba State.

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PRODUCTIVITY AND PROFITABILITY ANALYSIS OF CASSAVA PRODUCTION IN TARABA STATE/Taraba 1. Agric. Res. Vol. 1 No. 1,2013

Materials and MethodsStudy Area and Data Collection

This study was conducted in Taraba State inthe year 20 IO. The State is located in the NorthEastern part of Nigeria. The state lies betweenlatitudes 6° 30' and 9° 36'N of the equator andlongitudes 9° 10' and 11° 50'E of the GreenwichMeridian (TADP, 2004). The predominant economicactivities of the people include crop and livestockproduction.

A purposive sampling procedure wasemployed to select the area of study. In the course ofthe study nine Local Government A~eas (Ardo Kola,

A number of analytical tools were used in this study.These included:(a) The stochastic frontier production model whichwas used to examine the input-output relation,The implicit form of the stochastic frontierproduction model is specified as follows;JnYu = B; + fJJJnXl+ fJ21nX2+ fJ31nX3 + fJ./nX~ +fJolnX5 + fJ61nX6 + fJ71nX7 + (v,- uJ 1;where Vi = cassava output (kg/ha), X. = total land area under cultivation (ha),X, = family labour used (man days/ha), X, = hired labour used (mandays/ha), X. = quantity of inorganic fertilizer used (kg/ha), X, = expenses onland preparation (1)+ / ha), X6= quantity of cuttings used (kg/ha), X,= quantityof agro- chemical used (Iiters/ha), In = logarithm to base e, ij = j,hobservation of the i'h fanner, V-U, = error term (e), Po = constant term to beestimated, P, to p, = coetTicients of tire independent variables to be estimated,

(b) The total factor productivity analysis was used toestimate the productivity of inputs used in cassavaproduction in the study areaThe explicit function of the relationship is expressedas follows,TFP = YI TVC , .. , , , .. ' 2;Where, 1TC = Total factor productivity, V = Output of cassava realized inKg, and TVC = Total Variable Cost in Nairn

(C) Resource -use efficiency was determined by theratio of marginal value product (MVP) to marginalfactor cost (MFC) of inputs based on the estimatedstochastic frontier coefficient. Following Rahman andLawal (2003), efficiency of resources is given as:Results and DiscussionEstimated Technical EfficiencyThe elasticities of production which indicate theresponsiveness of cassava output to unit changes ineach of the various inputs are shown in Table 1. Allthe values (coefficient) except for land preparationand agro-chernicals were positive, indicating thatcassava output responded positively to changes inthese inputs. These varied from 2.79% (for cassavastem) to 5.68% (for family labour), The negativevalues of -5.14% and -7,67% for the land preparationinput and agro-chernicals, respectively, indicatedecreases in cassava output as the inputs wereincreased by 1 unit each, This phenomenon couldcome from over-utilization of the resources or

Bali, Donga, Gassol, Kurmi, Lau, Takum, Ussa andWukari) were purposively chosen because of theirpreeminence in cassava production, Three villageswere purposively selected in each of the nine LocalGovernment Areas given total of 27 villages, A totalof 300 farmers were then randomly selected from the27 villages, Data were collected on inputs, costs ofinputs, output and associated prices and incomegenerated during the 2010/2011 production seasonusing structured questionnaire. Data were alsocollected on other relevant variables for purpose of theanalysis.Analytical Techniquesr= MVP/MFC , .. , .. , , .. , , , 3;The rule provides that when r = 1, there is efficientuse of resource, r> 1 indicates under -utilization ofresource; while r<1 shows over - utilization ofresource, The value of MVP and MFC wereestimated.MVP=MPP, Py

b, = Y/Xi ••••• , •• , """""" ., •• ,.,.,., •• , •• "",.,., •• ,4MFC = PXi, r = Efficiency ratio, MVP = marginalvalue product, MPP = marginal physical product,MFC= marginal factor cost. PXi (Unit price of inputXi), Y = Arithmetic mean value of output, Xi =Arithmetic mean value of input, P, = Unit price ofoutput.(d) The gross margin analysis was used to computethe profitability level of cassava enterprise in thestudy area, Fixed costs in cassava production wasassumed to be negligible, Thus the gross marginanalysis was used to determine the profitability whilethe internal or investment rate of return (IRR) ratiowas used to compute the return per Naira invested incassava production,GM = TR-TVC 5;Where, GM = gross margin, TVC = total variable cost, TR = total revenue,IRR=GMITVC

inappropriate application as it is very common withagro-chemical usage in small scale agriculture.

Except for land preparation, cassava stemand agro - chemicals, the coefficient of all the othervariables were statistically significant, either at 1% or5% as indicated in Table 1. They were thus relevantvariables in explaining variations in level of cassavaproduction. These results have policy implications forimproving on cassava production in the State. There isalso necessity for further study on the impact of thetwo inputs with negative elasticities on cassavaproduction in the State, Given the potentia Is, emphasison extension services and provision of the requisiteinputs for farmers.

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~KJ et at.!7arabaJ. Agrtc. Res. Vol. I No. 1, 2013

Table 1 Maximum likelihood estimates of the Stochastic Frontierproduction functiont - ratioVariables parameter's Coefficient Std.error

ts Po 8.763 0.0216lIr1TI size PI 0.524 0.0468

~ ily labour Pl 0.568 0.0561labour PJ 0.332 0.0551

tiry of fertilizer P. 0.522 0.1048on land preparation p, -0.514 0.0718

-astern P6 0.279 0.0601_ hemical P7 -0.767 0.1313

square 82 1.246 0.0024

a= I celihood

tLif

0.915-57.621

9.768*"8.690***

1.682**7.651 **.5.142***0.647 Ns

0.669 Ns0.784 Ns

9.806*·*

14.760*·*23032

0.000200.0230

Computed from field data, 2010_ ficant at 5% level, ••• significant at 1%, Ns = Not significant

The total factor productivity calculated forroduction in Taraba state ·was 0.073. This ision that if all variable inputs used in cassava

J;I::c::rtiion were proportionately increased by a unit,ut in the study area would increase by

ens peribus. This also implies that thefactor inputs used in cassava production

~_",~...,,,,.-il.-,,-eimpact on cassava production.The summary of costs and return of cassava

I:t::octi<m in the study area is presented in Table 2._ - ated average cost incurred by sampled==.:. on arious variable inputs such as labor, stem,

chemicals, transport, mechanization,!::!~mlgcost etc. was ~ 213,560. The total revenue

generated from the sales of the cassava output was ~626,860. The gross margin obtained was ~ 413,300.The study also found that the gross margin per hectarein the study area was ~ 45,200. The ratio of totalvariable cost to gross margin computed was 0.52,meaning that for every Naira invested in cassavaproduction in the study area; 52 kobo was realized asa net profit. It was thus concluded that the business ofcassava enterprise was a profitable venture. Thisfinding is in consonance with the findings ofOladeebo and Oluwaranti (2012), Ogundari et aI.,(2007) and Adeola etal., (2011) who also concludedthat cassava enterprise in the South Western Nigeriawas found to be a profitable business.

erage Costs and Returns per hectare of Cassava production in the study areaCost (lloI) Revenue (~) Gross margin (~)

90,000 ------------- --------------74,386 ------------- --------------10,258.2 -------------- --------------2,906.4 -------------- --------------7,892.4 -------------- --------------17,000 -------------- -----------_.-I1,1 17 -------------- ---------------------------. 15671.5*40 -_.-----------213,560 626,860 413,300

data, 2010

Economic efficiency of resources used inroduction was obtained using the ratio of the

==-;i::n: value product '(MVP) to the marginal factorC). The computed ratios of the MVPs to the

presented in Table 3.The results indicatedinputs were inefficiently utilized because all

__ - ated efficiency ratios differed from unity._ labour, hired labour, land preparation and

. Estimated resource use efficiency in cassava production

cassava stem were under-utilized since their ratiosexceeded unity. This implied that an increase in theuse of these inputs would lead to an increase in outputof cassava production in the study area. The result ofthe study further showed that a decrease in the use ofland, fertilizer and chemicals would increase the levelof cassava production in the study area

MPP MVP 1FC R= MVP/MFC-42.68 -1644.16 3614.2248.70 1346.80 95.40120.84 21245.20 154.65328.12 -245.77 45.5070.90 1660.10 85.90168,56 536.99 95.80-164 -346.44 80.50

-0.4514.12137.38-5.4019.33

5.61-4.30

data 2010

Cc:aclus ionBased on the findings, it was concludedava production in Taraba State was a

profitable enterprise with a return of 52 kobo onevery Naira invested in the enterprise at theprevailing input and output prices as at the time of

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(ii) Extension services, especially of the ADPshould try to enlighten farmers to ensure better andmore appropriate application of the modem inputs,especially the chemicals.(iii) Access to credit by farmers must be guaranteedby the State Government through special programsto enable farmers acquire more productive modeminputs as well as other cost - elements in theproduction process.

It is envisaged that with the aboverecommendations implemented, the cassavaindustry in the State will grow and develop givenits high profit - generating potential.

PRODUCTIVITY A '0 PROFITABILITY ANALYSIS OF CASSAVA PRODUCTION IN TARABA STATE/TarabaJ. Agric. Res. Vol. 1 No. 1, 2013

this study (2010). The result of the study furtherpointed out that the profit level can be increased ifinput usages are adjusted to increase theirefficiency and productivity.RecommendationBased on the findings of this study, it IS

recommended that:(i) Agencies of government and other NGOs andInternational organizations concerned withagricultural development should make efforts toimprove on the supply and availability of agro-chemical, cassava stem and fertilizer to enhancegreater usage by the small scale farmers.

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