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COMPARATIVE ANALYSIS OF PRODUCTIVITY AND EFFICIENCY IN LOW AND HIGH EXTERNAL INPUTS TECHNOLOGY AGRICULTURE IN IMO STATE
ABSTRACT
The study was designed to compare productivity and efficiency of Low External Input Technology and High External Input Technology Farms in Imo State. Specifically, it aimed at comparing the socio- economic characteristics of the two groups of farmers as well as their productivities, ascertain the factors influencing aggregate and individual resource productivities, determine production efficiency and returns to scale in the two farm types. The study was conducted in Imo State, Nigeria. Primary data used for the study were collected using structured questionnaire. The sample size comprised 80 Low external input technology and 80 High external input technology farmers who were selected using the multistage and purposive sampling techniques. The sampling frame comprised all the LEIT and HEIT farmers in Imo State. Data were analyzed using both statistical techniques, the Ordinary Least Square (OLS), multiple regression and profit function. The results of data analysis for the two farm types showed that farmland was more productive in the HEIT than LEIT farms while planting materials and organic manure were more productive in LEIT than planting materials and inorganic fertilizer in HEIT farms. Furthermore, man-days of labour and capital inputs are statistically significant in LEIT farms but non significant in the HEIT farm type at the 5% and 1% levels of probability though they possess the expected positive signs. The results of data analysis further showed that farm size, expenditure on planting materials, capital inputs, expenditure on organic manure, number of crops planted in a mixture in the farms, level of education and farming experience are the main determinants of aggregate agricultural productivity in LEIT farms. These variables are statistically significant at 1% and 5% levels. On the other hand farm size, capital input, number of crops planted in a mixture in the farm, distance to the nearest market, level of education, farming experience, man-days of labour, and non farm income are the main determinants of aggregate agricultural productivity in HEIT farms. These variables are statistically significant at 1% and 5% levels. A comparative analysis of aggregate agricultural productivity between LEIT and HEIT farms showed that LEIT farmers achieved higher aggregate agricultural productivity than HEIT farmers. The results of data analysis on production efficiency showed that HEIT farmers were relatively more technically efficient than the LEIT farmers, in the use of resources. However, both farm types are allocatively inefficient in the use of farmland, labour, planting materials, capital inputs and organic manure or inorganic fertilizer. The existence of resource use disequilibria in both farm types implies that there is still the possibility of increasing output at the current level of technology in the study area. The result also showed that the LEIT and HEIT farm types are equally economically efficient in the use of productive resources as there is no significant difference in their levels of economic efficiency. The result further showed that LEIT farmers experienced increasing returns to scale while HEIT farmers experienced decreasing returns to scale.
TABLE OF CONTENTS
Page
TITLE PAGE i
ABSTRACT vii
TABLE OF CONTENT ix
LIST OF TABLES xvii
LIST OF FIGURES xx
CHAPTER ONE 1
1.0 INTRODUCTION 1
1.1 Background of the Study 1
1.2 Statement of the Problem 3
1.3 Objectives of the Study 6
1.4 Hypotheses of the Study 7 1.5 Significance of the Study 7 x 1.6 Plan of the Study 8
CHAPTER TWO 10
LITERATURE REVIEW 10
2.1Theoretical Framework 10
2.1.1 Sustainable agriculture 10
2.1.2 Agro- ecology 12
2.1.3 Organic agriculture 12
2.1.4 Permaculture 13
2.1.5 Low External Input Technology 14
2.1.6 The Concept of Low External Input Technology and High External
Input Technology Agriculture 15
2.1.7 Low External Input Agricultural Technologies and resource
Utilization 18
2.1.7.1 Intercropping 18
2.1.7.2 Alley cropping 19
2.1.7.3 Cover cropping and green manure 20
2.1.7.4 Compost 20
2.1.7.5 Animal manure 21 2.1.7.6 Improved fallow 22 xi
2.1.7.7 Land utilization 24
2.1.7.8 Labour utilization 25
2.1.7.9 LEIT and Gender Issues 25
2.1.8 High External Input Agricultural Technologies 26
2.1.9 External Inputs and Agricultural Development 30
2.1.10 Concept and meaning of agricultural productivity 32
2.1.10.1 Input Productivity 32
2.1.10.2 Determinants of Agricultural Productivity 39
2.1.11 The Concept of Efficiency of Resource Use 44
2.1.12 The Concept of Production Function 47
2.2 Empirical Framework 51
2.2.1 Socio-Economic Characteristics of LEIT and HEIT Farms 51
2.2.1.1 Socio-Economic Characteristics of LEIT Farms 51
2.2.1.2 Socio-Economic Characteristics of HEIT Farms 57
2.2.2 Empirical Literature on Resource Productivity in
LEIT and HEIT Farms 58
2.2.2.1 Resource Productivity in LEIT Farms 58
2.2.2. 2 Resource Productivity in HEIT Farms 62 2.2.3 Empirical Literature on Production Efficiency
in LEIT and HEIT Farms 64
2.2.3. 1 Production Efficiency in LEIT Farms 64
2.2.3. 2 Production Efficiency in HEIT Farms 65
2.2.4 Empirical Literature on Nature of Returns to Scale
in LEIT and HEIT Farms 66
2.2.5 LEIT and Land Requirements 67
2.2.6 LEIT and Labour Requirements 68
CHAPTER THREE 69
3.0 METHODOLOGY 69
3.1 Study Area 69
3.2 Sample Selection 71
3.3 Data Collection 72
3.4.0 Method of Data Analysis 74
3.4.1 Determination and Comparison of Productivity of Resources
Among High External Input Technology and Low External
Input Technology Farms 74
3.4.2 Analysis of the Determinants of Aggregate Agricultural and
Individual Resource Productivities among LEIT and HEIT farms 76
3.4.3 Comparative Analysis of Productivities among LEIT
and HEIT Farmers 79
3.5.0 Analysis and Comparison of production
Efficiencies among LEIT and HEIT Farmers 82
3.5.1 Analysis and Comparison of Technical Efficiency
among LEIT and HEIT Farmers 82
3.5.2 Determination and Comparison of Allocative Efficiency
among LEIT and HEIT Farmers 87
3.5.3 Determination of Economic Efficiency of LEIT
and HEIT Farmers 90
3.6 Estimation and Comparison of Returns to Scale among
LEIT and HEIT Farmers 92
CHAPTER FOUR 95
4.0 RESULTS AND DISCUSSION 95
4.1 Socio- economic Characteristics of Survey Farmers 95
4.1.1 Age Distribution 96
4.1.2 Farming experience 97
4.1.3 Farm size 98
4.1.4 Household size 100
4.1.5 Level of education 101
4.1.6 Labour use 102
4.1.7 Number of crops in a mixture 103
4.2.0 Determination and Comparison of Productivity of Resources among LEIT and HEIT Farmers 104
4.2.1 Low External Input Technology (LEIT) Farms 104
4.2.2 High External Input Technology (HEIT) Farms 107
4.2.3 Comparison of Productivity of Resources among LEIT and HEIT
Farms 110
4.3 Determinants of Aggregate Agricultural Productivity among LEIT
and HEIT Farms 114
4.3.1 Determination of Aggregate Agricultural Productivity in
LEIT Farms in Imo State 116
4.3.2 Determination of Aggregate Agricultural Productivity in
HEIT Farms in Imo State 120
4.3.3 Comparative Analysis of Aggregate Agricultural Productivity
among LEIT and HEIT Farmers 124
4.4.0 Determination and Comparison of Individual Resource
Productivities among LEIT and HEIT Farmers 128
4.4.1 Determination and Comparison of Land Productivity among LEIT and HEIT Farmers 128
4.4.2 Determination and Comparison of Labour Productivity
among LEIT and HEIT Farmers 131
4.4.3 Determination and Comparison of the Productivity of
Capital among LEIT and HEIT Farmers 134
4.4.4 Determination and Comparison of the Productivity of Organic
and Inorganic Fertilizer among LEIT and HEIT Farmers 137 4.4.5 Determination and Comparison of the Productivity of Planting
Materials among LEIT and HEIT Farmers 139
4.5.0 Determination of Production Efficiency
of LEIT and HEIT Farmers 142
4.5.1 Analysis and Comparison of Technical Efficiency
among LEIT and HEIT Farmers 142
4.5.2 Determination and Comparison of Allocative Efficiency among
LEIT and HEIT Farmers 147
4.5.3 Determination and Comparison of Economic Efficiency
among LEIT and HEIT Farmers 151
4.6 Estimation and Comparison of Returns to Scale among
LEIT and HEIT Farmers 152
CHAPTER FIVE 155
5.0 SUMMARY, CONCLUSION AND RECOMMENDATIONS 155
5.1Summary 155
5.2 Conclusion 159
5.3 Recommendations 160
REFERENCES 164
APPENDIX 184
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
The agricultural sector was the mainstay of the Nigerian economy before and immediately after independence until the oil boom of the 1970’s. In the period before the 1970’s agriculture provided the needed food for the population as well as serving as a major foreign exchange earner for the country (CBN, 2003).
Nigerian agricultural development policy over the years has been informed by the belief that the development of agriculture is a sine qua non for the over all growth and development of the economy. This understanding constituted the basis of all efforts made in the planning and design of programmes and projects to ensure growth in the sector (CBN, 2003). Agriculture is the largest non oil export earner and largest employer of labour accounting for 88% of the non oil foreign exchange earnings and 70% of the active labour force of the population (FGN, 2001).
However, over the years the growth rate of agricultural production has either stagnated or failed to keep pace with the country’s rapid population growth rate of about 3.2 per cent resulting in perennial food shortages, soaring food prices and massive importation of food by governments. While food production increases at the rate of 2.5 per cent, food demand increases at a rate of more than 3.5 per cent (FOS, 1996).
It is very obvious that the sustainable growth rates of the Nigerian economy cannot be achieved in the absence of increased agricultural output in the country. Harsch (2004) noted that higher output will directly reduce hunger and bring down the cost of food imports as well as have wider economic benefits, stimulating rural incomes and provide raw materials for African industries. The main thrust of Nigeria’s agricultural development efforts, therefore has been to enhance and sustain the capacity of the sector to play this assigned role, with particular emphasis on the attainment of sustainable level in the production of basic food commodities, especially those in which the country has comparative advantage. It also involve developing the capability to increase the production of agricultural raw materials to meet the growing needs of an expanding industrial sector, as well as the production and processing of exportable cash crops to boost the nation’s non oil foreign exchange earning capacity. This process of transformation from a predominantly subsistence agriculture to a highly mechanized farming to enhance agricultural production as well as ensure its sustainability has been
undermined by the disincentives induced by the macroeconomic environment (CBN,2003). For instance the realignment of the Naira exchange rate, which resulted in the depreciation of the Naira, has increased the prices of imported agricultural inputs such as fertilizers, agro-chemicals, tractors and vaccines among others. In 1997, subsidies on fertilizers were removed completely but re-introduced in 1999 (CBN, 2003).The potential of these high external input technologies (e.g. inorganic fertilizer, agrochemicals, pesticides tractors etc.) in improving agricultural productivity in Imo state in particular and Nigeria in general is not in doubt. The small-holder farmer in Imo state appears to be in dilemma on the need to increase agricultural productivity in a harsh macroeconomic environment. In the face of the apparent scarcity and expensiveness of the high external input agricultural technologies , it becomes compelling to re-examine the low external input agricultural technologies, (e.g. organic manure, compost, animal manure, etc.) with a view to determining which of the two offers the farmer higher productivities and why.
1.2 Statement of the Problem
Analysis of food production in Nigeria shows that a large part (80- 90 %) is derived from small-scale farmers operating at or near the subsistence level with only modest excess production to supply the rapidly growing urban centres (Ajayi, 2001). Productivity growth appears to be the main determinant of income growth and poverty reduction. Government view increasing and sustaining agricultural productivity as a means of over all growth, poverty reduction and promotion of food security. In particular, it has been shown that agricultural productivity growth is more poverty alleviating than non agricultural productivity led growth (Nomaan, 2004).
On the other hand, Graves et al., (2004) observed that the significant reduction in the total number of the undernourished in the world in the past was as a result of the use of high external input agricultural technologies (HEIT) i.e. high yielding cereal varieties, together with high levels of inputs such as water from irrigation system, fertilizer to provide the nutrients needed by the varieties and pesticides to control any associated weeds, pests and diseases. These technologies according to him generally need a relatively high capital investment and a well functioning economic and physical infrastructure for effective implementation.
In order to increase farm level productivity, some scholars (Pretty, 1995,
Snapp et al., 1998) propose labour intensive low external input technology (LEIT) while others argue that food security cannot be achieved without widespread adoption of HEIT. Proponents of LEIT often claim that the reliance on local sources of inputs is more sustainable, but the analysis of De Jager et – al., (2001) suggests there is little difference between HEIT and LEIT in this respect. However, the disincentives induced by the macroeconomic environment on HEIT utilization such as removal of subsidy on fertilizer and re-alignment of the Naira exchange rate and consequent increase in the prices of imported agricultural inputs ( such as fertilizer, agro-chemicals , tractor etc) have narrowed down its use.
Despite the continuing debate on the relative performance of the two approaches, Graves et al., (2004) noted that there are few studies that compare yields and production under the same soil and climatic conditions and over wide areas. Furthermore, both Tripp (2006a) and Graves et al., (2004) argued that there is little in the literature on the issues that need to be faced in scaling up production in LEIT.
Apart from the findings of Graves et al., (2004) and Tripp (2006a), previous studies on relative production efficiencies and agricultural productivities among small-holder farmers in the study area (Onyenweaku et – al 2000; Ohajianya and Onyenweaku, 2001, 2002; Olagoke 1991; Onyenweaku et – al; 1996, Anyanwu, 1993, 2005; Onyenweaku and Nwaru; 2005) appear to have been silent on the comparative analysis, productivity and efficiency in the HEIT and LEIT farm types. The gap in knowledge is what this study
intends to fill.
1.3 Objectives of the Study
The broad objective of the study is the comparative analysis of productivity and efficiency in the low and high external input technology farming in Imo state. The specific objectives are to:
- estimate and compare the socio-economic characteristics of the two groups of farmers in the state;
- determine and compare productivity of resources in the HEIT and LEIT farms in the state;
- determine and compare the factors influencing aggregate agricultural productivity in the HEIT and LEIT farms in the state;
- determine and compare the factors influencing individual resource productivities in the HEIT and LEIT farms in the state;
- determine and compare the production efficiency of HEIT and LEIT farmers in the state, and
- estimate and compare the returns to scale among the two groups of farms in the state.
1.4 Hypotheses of the Study
The following null hypotheses were tested:
- Aggregate agricultural productivity among LEIT and HEIT farms in Imo state are not significantly influenced by farm size, expenditure on planting materials, non farm income, crop mixture, level of education of household head, labour input, capital input, age of household head, household size, farming experience and distance to the nearest market.
- There is no significant difference between aggregate agricultural productivities of LEIT and HEIT farmers in the state.
- The HEIT and LEIT farmers are not equally technically, and
economically efficient in the use of resource inputs.
1.5 Significance of the Study
Previous studies (Olagoke (1991), Obasi, (1995), Onyenweaku, et al.,
(2000), Nweke et al., (1992, 1994, 1995, 1999), Nweke (1996), Okorji
(1983), Anyanwu (2005, 1993,2003), Ohajianya and Onyenweaku (2001, 2002), have examined different aspects of productivity and efficiency in the study area but none of them addressed the problems of high and low external input technology agriculture. This study intends to bridge the gap in knowledge. The studies also pointed to the low resource productivity and efficiency in Nigerian agriculture but were silent on whether they are obtainable in the high external or low external input agricultural technological divide. This study intends to fill this vacuum.
At the global level, Graves et al., (2004) argued that despite the continuing debate on the relative performance of HEIT and LEIT, that there are few studies that compare yields and production under the same soil and climatic condition. This is a challenge which the study addresses. Above all these, this study will also enrich current literature on the issues that need to be faced in scaling up production in these two farm types.
A comparative analysis of these two farm types in terms of their productivities will enable the farmers to make rational choice in order to increase productivity of farm output in a depressed economy.
In addition, a critical examination of resource use efficiency on both the high external and low external input technology agriculture will indicate for instance; where resource adjustments are needed for the purpose of increasing output per given unit of input.
1.6 Plan of the Study
This thesis is organized as follows:
Chapter one contains background to the study, statement of the problem, objectives of the study, hypotheses of the study, significance of the study and plan of the work.
Chapter two presents literature review.
Chapter three discuses the methodology used in this research work. Here, the study area, processes of sample selection, data collection and analytical tools were discussed.
The analysis of some socio-economic characteristics of the sampled farmers, results of empirical data analysis and discussion of findings are presented in chapter four.
Chapter five summarizes the work, highlights the policy implications of the findings and conclusion reached.
COMPARATIVE ANALYSIS OF PRODUCTIVITY AND EFFICIENCY IN LOW AND HIGH EXTERNAL INPUTS TECHNOLOGY AGRICULTURE IN IMO STATE
