This study examined local rice production and value addition in Ebonyi State, Nigeria. Data were purposely collected from Ishiagu and Abakiliki from 144 rice value chain actors. It was found that wholesalers enjoy the largest share of the marketing margin, where at cross boundary markets, the wholesalers’ profit goes as higher as N76.0/kg as compared to N39.5/kg, received by local farmers, showing unequal distribution of benefits among the local rice value chain actors, where reward to traders is extremely higher than that of producers. The profitability analysis shows a net return of N4, 085 with a BCR of 1.14:1, meaning that local rice production is viable and profitable in the area.
Two separate multiple regression analysis, using the double-log regression as the lead equation for the producers (farmers) gave R2 of 0.923 and F-Ratio of 51.031, being an indication that 92.3% of the variation in the rice output was explained by the explanatory variables, while 7.70% was accounted-for due to error term (ei) and uncaptured variables. For the secondary value chain actors (transporters, millers, wholesalers and retailers), the exponential function gave R2 of 0.782 and F-Ratio of 38.104, being an indication that 78.2% of the variation in the rice output was explained by the explanatory variables (socio-economic characteristics) while 21.8% was accounted-for due to stochastic error term (ei) and uncaptured variables. The study recommended improvement of effectiveness in cooperative membership to attract finance for rice production, inputs and value addition, purchase of machines for processing and packaging, transportation and marketing. Furthermore, lack of adequate agricultural infrastructure and market information systems was observed to be critical areas of policy concerns. Policies for microcredit institutions on provision of credits to local rice farmers are also recommended to improve rice productivity by capacitating smallholder farmers to use modern agricultural machinery.
Table of Contents
1. Introduction
2. Purpose of the Study
3. Methodology
3.1 Analytical Techniques
3.1.1 Multiple Regression Functional Model-Objectives III and IV
3.2 GROSS MARGIN MODEL – Objective V
4. Results and Discussions
4.1 Market Integration and Marketing Channel for Locally-milled Rice in Ebonyi State
4.1.1 Market Integration
4.1.2 Marketing Channel
4.2 Market Concentration
4.3 Constraint to Local Rice production and value addition in the study area
4.4 Constraints to marketing of local rice in the study area
4.5 Rank of Local Rice Consumption Inhibitors
4.6 Policy Implication
5. Conclusion
6. Recommendations
Research Objectives and Focus
This study aims to perform an economic analysis of the local rice production value chain in Ebonyi State, Nigeria, by examining the socio-economic characteristics of stakeholders, the factors affecting production, as well as the constraints and costs associated with value addition.
- Economic analysis of the local rice value chain.
- Evaluation of factors influencing rice output among actors.
- Cost-benefit analysis of packaging locally milled rice.
- Identification of production and marketing constraints.
- Assessment of consumer preference and consumption inhibitors.
Excerpt from the Book
The “value chain view” implies a system of interaction and relationships between different actors and organization in a product production, marketin and consumption cycle.
The system usually includes more than a handful of producers and market stalls. In value chain, business development services such as the enabling environment are integral part of the chain, just like the producers, processors, retailers and consumers (Daniel, Agridea and Adreas, 2006.); therefore, understanding the mechanism within the Nigerian rice value chain system mitigates distinguishing bottlenecks and failures thereby creating improvement possibilities within the system (Inuwa, Kyiogwom, Ala, Maikasuwa and Ibrahim, 2011). The value chain model asserts that a product is rarely directly consumed at the place of its production. It is transformed, combined with other products, transported, packaged and displayed and so on, until it reaches the final consumers. This identifies the various actors who are linked by trade; own the raw materials, intermediate products and final products and services and each that add some value to the product. Therefore, the value chain model supposes that by understanding these interactions, it is possible for private and public sectors (including development agencies) to identify points of intervention to increasing efficiency in production, processing packaging, transporting and marketing the product, thereby increasing the total generated value (TGV) and improving the competence of the intended actors to increase their share of the total generated revenue (TGR).
Chapter Summaries
1. Introduction: Discusses the significance of rice as a staple food in Nigeria, current production deficits, and the potential for domestic growth despite various constraints.
2. Purpose of the Study: Outlines the primary economic goal of analyzing the rice value chain in Ebonyi State and lists specific research objectives.
3. Methodology: Details the multi-stage sampling technique used to select 144 respondents and describes the specific regression and gross margin models employed for data analysis.
4. Results and Discussions: Presents findings on market integration, volume of trade, identified constraints for production and marketing, and the ranking of consumer inhibitors for local rice.
5. Conclusion: Summarizes the profile of the actors and the economic finding that local rice production and value addition is profitable, albeit hampered by inefficiency.
6. Recommendations: Offers specific policy directives including the formation of cooperatives, access to credit, infrastructure improvement, and training for local farmers.
Keywords
Value chain, local rice, Ebonyi State, Nigeria, profitability, smallholder farmers, marketing margin, socio-economic factors, multiple regression, agricultural extension, infrastructure, food security, rice production, processing, value addition.
Frequently Asked Questions
What is the core subject of this study?
The study focuses on the value chain analysis of local rice production and value addition specifically within Ebonyi State, Nigeria.
What are the central themes discussed in the research?
The research themes include socio-economic characteristics of rice value chain actors, market concentration, profitability, production/marketing constraints, and consumer behavior regarding local rice.
What is the primary objective of this work?
The work aims to economically analyze the local rice production value chain to identify bottlenecks and interventions to increase efficiency and generated revenue.
Which scientific methods are applied in this analysis?
The study employs descriptive statistics for data reporting and inferential statistics, specifically multiple regression analysis (double-log and exponential) and Gross Margin (GM) analysis, to evaluate productivity drivers.
What key topics are covered in the main section?
The main section covers market integration, marketing channels, volume of trade, production and marketing constraints, and a ranking of factors that inhibit consumption of local rice.
Which keywords best characterize this publication?
Key terms include value chain, local rice, Ebonyi State, smallholder farmers, agricultural extension, profitability, and Nigerian rice production.
How does the profitability of local rice production compare to costs?
The study highlights a benefit-cost ratio (BCR) of 1.14:1, indicating that for every 1.00 Naira invested in production and value addition, actors stand to gain 1.14 Naira as profit.
What are the primary constraints identified by the respondents?
The major constraints identified include poor funding (inadequate capital), lack of storage facilities, high costs of processing machinery and transportation, and issues with grain quality (stones/dirt).
What role does packaging play in domestic rice consumption?
Packaging is ranked as the primary consumption inhibitor (1st rank), significantly affecting consumer preference for locally produced rice compared to imported alternatives.
What policy recommendation is suggested regarding agricultural cooperatives?
The study recommends that rice value chain actors form cooperative groups to increase access to low-interest credit and facilitate collective storage and processing infrastructure.
- Quote paper
- Udeme Usanga (Author), 2019, Value Chain Analysis of Local Rice (Oryza glaberrima) Production in Ebonyi State, Nigeria, Munich, GRIN Verlag, https://www.grin.com/document/1382698
