ECONOMIC ANALYSIS OF OKRA PRODUCTION: A CASE OF IVO LOCAL GOVERNMENT AREA OF EBONYI STATE

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1 ECONOMIC ANALYSIS OF OKRA PRODUCTION: A CASE OF IVO LOCAL GOVERNMENT AREA OF EBONYI STATE ABSTRACT Edet, G. E. and Etim, N. A. Department of Agric Economics and Extension, University of Uyo, P.M.B. 1017, Uyo, Akwa Ibom State This study was carried out to examine the economic analysis of okra production in Ivo Local Government Area of Ebonyi State. To achieve this, the inputs-output relationship, cost and returns and the constraints of okra production in the study area were pursued. A total of 80 okra farmers in Ivo Local Government Area were sampled using multistage technique. A set of structured questionnaire was used for data collection. The data obtained was analyzed using multiple regression analysis, profit analysis and descriptive statistics. The result of the multiple regression analysis shows that quantity of seeds, labour, land, educational level and farmers experience affected okra production directly in the study area. Profit analysis shows that okra production is profitable in the area with an average profit of N35,781.7 per hectare. The major constraints that affected okra production were insect and disease attack, bad roads, lack of storage facilities, lack of improved varieties of seeds, insufficient capital, lack of Extension Agents visit and lack of government assistant. Recommendations include regular Extension Agent visit and government assistance to okra farmers. Keywords: Vegetable, okra production, farmers INTRODUCTION Vegetables are important protective food for the maintenance of health and prevention of disease. They contain valuable food ingredients, which can be successfully utilized to build up and repair the body. (Bakhru, 2003; Edet and Etim, 2007). In most countries of the world, vegetable is one of the staple food components whose production has continued to increase (Udoh and Akpan, 2007). According to Kebede and Gan (1999), the main sources of farm income for small and limited resource farmers are basically arable crop production, vegetables and nonvegetable crops. Its importance has long been recognized the world over (Ndaeyo et al., 2007). Vegetables are valuable in maintaining alkaline reserve in the body. They are valued mainly for their high vitamin and mineral content (Bakhru, 2003). Vegetable production has become very popular in many countries of the world due to its importance in the diet of the people. AVRDC (2004) documented that vegetables are the most affordable and accessible sources of micronutrient and its production is increasingly recognized as a catalyst for rural development and as a means of increasing and generating foreign exchange in Africa. Its production constitutes about 4.6 percent of the total staple food production in Nigeria between (CBN, 2004). Okra is the most important fruit vegetable crop and a source of calorie (4550kcal/kg) for human consumption. It ranks first before other vegetable crops (Babatunde et al., 2007). It is one of the most commonly grown vegetable crops in the tropics (Gibbon and Pain, 1984). Okra cultivation and production has been widely practiced because of its importance to the economy development and can be found in almost every market in Africa. Varieties vary by plant height, size of fruit, colour, early or late maturing etc., viz; white velvet, green velvet, long pod, lady finger, dwarf green pods (Udoh et al., 2005). According to the same authors, okra is grown generally in the tropics particularly tropical Asia, East, Central and West Africa as well as the Caribbean. It contains 86% of water, 2.2% of protein, 10% of carbohydrate, 0.2% of fat and vitamins A, B and C. Chriso and Onuh (2005); Katung and Kashina (2005) documented that okra is consumed throughout Nigeria. According to CBN (1996), the average growth rate of vegetable crop including okra produced in Nigeria between 1989 and 1993 was 14.0% compared to 6.4% of cassava, 18% for palm oil and 3.8% for maize. Fresh okra fruits have been reported to be a good source of vitamins, minerals and plant proteins (Eke et al., 2008). According to the same Authors, although okra can be grown on a wide range of soil types, its yield is known to be mostly limited by soil fertility and cultural management. In most cases, the crop is intercropped with other field crops at populations higher than the 10,000 plants/ha recommended for okra intercrop (Udoh et al., 2005) Okra is grown for its tender fresh pods which are rich in vitamins, minerals and protein (Martin, 1982; Mbah et al., 2009). The tender leaves are often used as vegetable and provide vitamin A and C, protein, calcium and iron in the diet. Mature dried seeds are roasted, ground and added to coffee as an adubiant (Njoku and Ebeniro, 2009). The crop is used as a soup thickener and the immature fruits may be boiled as vegetable and served with rice and other food types. The increase in the demand for okra in Ebonyi state has made many farmers to go into large scale production as a mean of income either directly in production or marketing or both. it is therefore pertinent to take a critical look at the economic analysis of okra production. This research was therefore conducted in order to NJAFE VOL. 6 NOS.1 &2,

2 estimate the production function of okra, evaluate the cost and returns of okra production and identify the major constraints encountered by okra farmers. METHODOLOGY Study Area: The study area was Ivo Local Government Area of Ebonyi State. Ivo has a population of 120,919 with land mass of about 1506sqkm. It is located on latitude N and longitude E (NPC, 2006). Ivo Local Government Area is made up of six clans. The major occupation of the people is farming. Their cropping systems are mainly mixed cropping, intercropping as well as sole cropping, and the main crops cultivated in the area are cassava, yam, okra, garden egg, coco yam, rice and sweet potatoes. Data collection, sample size and sampling procedure: Primary source which include the use of structured questionnaire as well as personal interview scheduled to suit the farmers convenience was utilized for this study. The sampling method utilized for this study was multistage. Out of the six clans that make up Ivo Local Government Area, four clans that are actively involved in okra production were purposely selected viz; Ivo, Ayaragy, Ishiagu and Obinagu. The second stage was the random selection of two villages from each chosen clan making a total of eight villages. Finally, ten okra farmers were randomly selected from each village to give a total of eighty (80) okra farmers. Analytical technique: Multiple regression analysis was used to estimate the production function of okra. Evaluation of cost and returns of okra production was analysed using budgetary approach (profit analysis), while descriptive statistics was used to identify the problems encountered by the farmers. The multiple regression analysis is given as Y = f (X 1, X 2, X 3, X 4, X 5, X 6, X 7, X 8 ) Where Y is the dependent variable and the Xs are the independent variables. Y = Quantity of okra produced in kilogram X 1 = Quantity of seeds (in kilogram) X 2 = Labour (in many days) X 3 = Pesticides used (in litres) X 4 = Farm size (in hectares) X 5 = Quantity of fertilizer (in kilogram) X 6 = Age (in years) X 7 = Level of education (in years) X 8 = Farmers experience (in years) e i = error term Four functional forms were used for the analysis (Linear, Semi-log, Exponential and Double log) and the best fitted was chosen based on the statistics and the R 2. The functional forms are given as 1. Linear Function Y i = B 0 + B 1 X 1 + B 2 X 2 + B 3 X 3 + B 4 X 4 + B 5 X 5 + B 6 X 6 + B 7 X 7 + B 8 X 8 + e i 2. Semi log function Y = B 0 + B 1 log(x 1 ) + B 2 log(x 2 ) + B 3 log(x 3 ) + B 4 log(x 4 ) + B 5 log(x 5 ) + B 6 log(x 6 ) + B 7 log(x 7 ) + B 8 log(x 8 ) + e i 3. Exponential function Log (Y) = B 0 + B 1 X 1 + B 2 X 2 + B 3 X 3 + B 4 X 4 + B 5 X 5 + B 6 X 6 + B 7 X 7 + B 8 X 8 + e i 4. Double log function Log (Y) = B 0 + B 1 log(x 1 ) + B 2 log(x 2 ) + B 3 log(x 3 ) + B 4 log(x 4 ) + B 5 log(x 5 ) + B 6 log(x 6 ) + B 7 log(x 7 ) + B 8 log(x 8 ) + e i The budgetary approach used is given as Profit = TR TC and TC = TFC + TVC Where TR = Total Revenue; TC = Total Cost; TFC = Total Fixed Cost; TVC = Total Variable Cost RESULTS AND DISCUSSION The results of the estimated production function of okra are presented in Table 1. The Double log functional form was chosen as the lead equation based on the magnitude of the coefficient of the adjusted R squared ( R 2 ), the number of significant variables and the conformity of the signs of the significant variables. The R 2 of shows that the independent variables account for 85% of variation in the output of okra. The F-ratio provides an overall test of significant of the whole function on the regression line. The test showed that F-ratio is statistically significant at 1% level of significance. That is, the value of R 2 is significantly different from zero. The quantity of labour used was significant at 1% level with a positive sign. This implies that quantity of labour used directly NJAFE VOL. 6 NOS.1 &2,

3 affect output of okra produced. As labour increases, the level of output also increases because all the production activities will be done on time. Quantity of seeds used, farm size and educational level were also significant at 5% level and all carry positive signs. The implication is that they all affect output of okra directly. An increase in the quantity of seed might lead to planting a wider area, which leads to increase in output. Also, okra farmers, who are educated, adopt innovations and this increase their output. As the farm size increases, the output also increases. Pesticides and fertilizers do not directly affect the output of okra as indicated in the result analysis. Table 1: Results of Multiple Regression Analysis for Quantity of Okra Produced and Inputs Used Variable Linear Semi log Exponential Double log Coefficient Constant (0.781) (-0.947) (21.763)*** (9.266)*** Quantity of seeds (in kg) E (1.609) (1.338) (2.25)** (1.993)** Labour (in man-day) E (2.687)*** (1.2904) (-0.751) (5.14)*** Pesticides (in liters) E (1.414) (-0.937) (1.064) (-3.487)*** Farm size (in ha) (6.888)*** (1.838)* (3.786)*** (2.08)** Fertilizer used (in kg) E (-0.987) (0.392) (0.522) (-1.71)* Age of farmers (in years) ( ) (0.138) (-1.061) (-0.556) Level of Education (in E years) (0.040) (0.370) (-0.160) (2.23)** Farmers experience (in E years) (1.036) (0.196) (0.650) (0.439) R R F - Statistics Source: Field Survey, 2009 *, ** and *** represents 10%, 5% and 1% level of significant respectively. t-values are in parenthesis The lead equation (Double log) is therefore In Y = In X In X In X In X In X In X In X In X 8. Standar d Table 2: Cost and returns of okra production in the study area Items Average Cost (N/ha) Percentage Fixed Cost Land 4, Basket 3, Weeding Hoe Hand glove Land mat Matchet Basin Total Fixed Cost (TFC) 10, Variable Cost Seeds 3, Fertilizer Pesticides 3, Transportation 1, Labour 6, Total Variable Cost (TVC) 15, Total Cost (TC) = (TFC + TVC) 25, Total Revenue (TR) 61, Profit = TR - TC 35, Source: Field Survey, NJAFE VOL. 6 NOS.1 &2,

4 Table 2 shows that the average revenue from okra production in the area is N 61, per hectare while the total cost is N25, per hectare, which give rise to N 35, profit per hectare. This indicates that the enterprise is profitable and can serve as an additional source of revenue for households in the area. It also shows that there is a high demand for okra since it is the major component of most soup in the area. Identifying the major constraints of okra production in the study area, table 3 shows that the major constraints faced by almost all he okra farmers is insect and disease attack (21.05%), followed by bad roads indicated by 18.42% and lack of storage facilities (12.11%). Lack of improved varieties was also a major constraint indicated by 11.58%, insufficient capital and lack of Extension Agents visit affected by 11.05% and 10.53% respectively, while lack of government assistant affected by 8.95%. Other constraints were insufficient buyers, high cost of inputs represented by 3.68% and 2.62% respectively. Table 3: Production constraints affecting okra production in Ivo local government area Insect and disease attack Bad roads Lack of storage facilities Lack of improved varieties of seeds Insufficient capital Lack of Extension Agents visit Lack of government assistant Insufficient buyers High cost of inputs Total Source: Field Survey, Note: Multiple responses are used. CONCLUSION AND RECOMMENDATIONS This study investigated the economic analysis of okra production in Ivo Local Government Area of Ebonyi State using multiple regression, profit analysis and descriptive statistics. From the results, the multiple regression analysis indicates that seeds, labour, land, level of education and farmers experience directly affects okra production. Profit analysis indicates that okra production is profitable. The major constraints were insect and disease attack, bad roads, lack of storage facilities, lack of improved varieties of seeds, insufficient capital, lack of Extension Agents visit and lack of government assistant. It is recommended that more Extension Agents should be posted to the farming communities who would always visit the farmers and introduce new technologies and techniques compatible with the farmers environment as well as discuss their problems concerning okra production. Government should assist in terms of loans to the farmers and construction of good roads. REFERENCES Asian Vegetable Research Development Centre for Africa (AVRDC) (2004): 11 th Regional Training Course on Vegetable Crop Production and Research. Tanzania 4 th July 4 th November, Babatunde, R. O., Omotesho, O. A. and Sholotan, O. S. (2007): Socio-Economic Characteristics and Food Security Status of Farming Household in Kwara State, North-Central Nigeria. Pakistan Journal of Nutrition Vol. 6, No. 1, p. 16. Bakhru, H. K. (2003): Foods That Heal. The Natural Way to Good Health. Orient Paperbacks, Delhi, Pp Central Bank of Nigeria (CBN) (1996): Annual Report and Statement of Account, Nigeria. Central Bank of Nigeria (CBN) (2004): Annual Report and Statistical Bulletin, Vol. 6, No. 12, December 2004 Christo, E. I. and Onuh, M. O. (2005): Influence of Plant Spacing on the Growth and Yield of Okra (Abelmoschus esculentus (L) Moench. Proceedings of the 39 th Conference of the Agricultural Society of Nigeria (ASN) held at Benin, 9 th 13 th October, Pp Edet, G. E. and Etim, N. A. (2007): Gender Role in Fluted Pumpkin (Telferia occidentalis) Production in Akwa Ibom State. Proceedings of the 41 st Annual Conference of the Agricultural Society of Nigeria (ASN) held at Zaria, 22 nd 26 th October, Pp Eke, K. A., Essien, B. A. and Ogbu, J. U. (2008): Determination of Optimum Planting Time of Okra (Abelmoschus esculentus) Cultivars in the Derived Savannah. Proceedings of the 42 nd Annual Conference of Agricultural Society of Nigeria (ASN). October 19 th to 23 rd at Ebonyi State University. Pp Katung, M. D. and Kashina, B. D. (2005): Time of Partial Defoliation and GAS Effect on Growth Indices and Yield of Okra (Abelmoschus esculentus) (L) Moench. Proceedings of the 39 th Annual Conference of the Agricultural Society of Nigeria (ASN) held at Benin, 9 th 13 th October, Pp NJAFE VOL. 6 NOS.1 &2,

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