Agricultural Economics
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Item AN ECONOMIC ANALYSIS OF TOBACCO PROCESSING INDUSTRY IN WESTERN AND KWARA STATES OF NIGERIA(1978-01) ADIO, D. A.The objective of this study is to assess the economic performance of tobacco processing industry in Western and Kwara States of Nigeria. After a brief discussion of the development of tobacco industry in Nigeria, some technical aspects of tobacco leaf production, cigarettes manufacture, and blackfat manufacture were discussed. Three firms were selected for the study. These are Nigerian Tobacco Company Limited, Philip Morris (Nigeria) Limited and Premier Tobacco Company Limited. The data used for the study were obtained from two main sources. The Federal Office of Statistics, Lagos; and through questionnaires and personal interviews with the selected tobacco processing firms. Investigations on the economic characteristics of the selected firms indicated that the firms differed not only in year of establishment, but also in ownership patterns (private vs. quasi government), size of capital, labour employment; output size, and value-added to the Nigerian economy. The largest firm (NTC), employed 3,302 workers in 1973 whilst Philip Morris (Nigeria) Limited, which is a medium-sized firm, employed 836 workers during the same period. The smallest firm, Premier Tobacco Company, employed only 40 workers during the same year. Also in terms of capital investment, NTC invested N15,000,000 in 1973, Philip Morris invested N2,400,604, and Premier Tobacco Company invested only N746,150 during the same period. In terms of value-added, NTC contributed N21,4l5,604 whilst Philip Morris added N6,582,75C and PTC added only N33,350 to the economy for the year 1973. The analysis of costs and returns involved in cigarettes manufacture revealed considerable disparity in the cost outlay and in the net returns to each firm. In 1973, for instance, the total cost for NTC was N31,387,419; that of Philip Morris was N10,l30,457; while that of PTC was only NI02.877. The net returns were Ml8,387,581 for NTC, «5,3l3,8o4 for Philip Morris and Nl4,346 for PTC for the same period. From the balance sheets and income statements of these firms, a financial analysis was carried out. This analysis revealed some favourable liquidity and solvency ratios for each firm and thus, each firm could easily qualify for loans advancement from financial institutions for the period under review. Using some time series data collected from the firms, production functions for tobacco processing industry were estimated. The estimated functions revealed that the level of productivities of tobacco leaf input, labour, and capital inputs varied from one firm to the other whilst excise tax had some negative effects on cigarettes manufacture. The sum of elasticity coefficients (which was less than one) implied a decreasing return to scale. The policy implication of the study stressed the need to check smuggling of cigarettes into the country from the neighbouring countries and the need for expansion and better management of the cigarette firms.Item RICE INDUSTRY IN KWARA STATE OF NIGERIA: AN ECONOMIC ANALYSIS(1978-08) ADENIYI, J. P.The objective of the study is, broadly, to examine the structure and performance of rice production and processing enterprise in Kwara state with a view to identifying possible ways of transforming the industry. The study also aims at identifying and evaluating some of the factors determining the level of marketed surplus and consumption of rice. The analytical tools employed are mostly a combination of farm record analysis and Statistical regression/production function techniques. Most of the survey data were collected during the 1977/78 crop season from 230 farming units, 20 rice mills, 50 rice parboilers and 183 rice consumers in Kwara state. Chapter I deals with the general introduction, problem Situation, objectives and methodology, followed by literature review in Chapter II. Chapter III is devoted to an analysis of resource Situation in rice production while Chapter IV deals with resource productivity and resource-use efficiency in rice farming. The structure and economic performance of rice processing industry is analysed in Chapter V; the Chapter also examines the least-cost milling facilities in Kwara state. Chapter VI is devoted to the analysis of the marketed surplus and home consumption of rice while in Chapter VII, the functional relationship between the quantity of rice consumed and selected variables are examined and some consumption elasticities are computed. The findings are summarised in Chapter VIII. The analysis of resource Situation showed, among other things, that Capital is the most limiting factor in Kwara state peasant rice production. It was shown further that while non-institutional sources of credit play a dominant role in peasant rice production, the role of institutional sources is almost nil. The costs and returns analysis showed that, within the limits imposed by the quality of data, an average rice farmer was making a quite satisfactory performance. With an average paddy rice yield of 1,506.9 kg. per hectare, and an estimated cost of £1205.8 per hectare, the net revenue accrueing to an average farmer was estimated at £1251.6 per hectare. In all the areas under study, the land variable alone accounted for over 70% of the variability in the aggregate production of rice, showing clearly that land is the most crucial determinant of rice production in Kwara state. On the whole, only few significant inefficiencies in resource' use were observed, implying that a mere re-allocation of resources may not have any appreciable effect on aggregate rice output. The study also revealed constant returns to scale on both large and small rice farms, and rejected the hypothesis of inverse relationship between output and farm size in paddy rice farming. The analysis of rice processing Operation revealed that rice processing units were making satisfactory performance in spite of the rather high processing costs, the estimated net returns being N7.96 and N51.5 per ton for parboiling and milling units respectively. It was further shown that small rice mills are the least-cost milling facilities in Kwara State. The emphasis on the marketed surplus study was both on the conceptual framework of the models and of the numerical results, The study showed that the allocation of rice output between market sales and home consumptions were both sensitive to price changes. Total price elasticity of marketed surplus ranged from 0.90 to 1.91 while that of home consumption elasticity fell in the range of -0.27 to -1.6. Output elasticity of marketed surplus ranged from 0.64 to 2.5. It was further shown that volume of production was more significant than family size and producer price in their influence on the marketed surplus of rice. With regards to rice consumption by non-rice producing households, the result showed that while family size and income are positively and significantly correlated with the consumption of rice, education appears to be an insignificant Variable. Household size elasticities ranged from 0.46 - 0.58 while income elasticities of rice consumption fell in the range of 0.02to 0.38. The result also points to the conclusion that, at present, consumers' preference for imported rice is rather strong, owing largely to the relatively high cooking quality of this commodity vis-a-vis that of the locally produced rice. Suggested policy measures include the development of irrigation facilities in the state, the expansion of farmers' credit base, selective mechanisation of rice farming operations, the use of modern rice mills in rice processing, a vigorous use of price instrument for the purpose of increasing the marketed surplus of rice in Kwara state and the removal of marketing bottlenecks, not only to facilitate efficient distribution of rice, but also to ensure that farmers are aware of the existing market conditions.Item LEAST-COST RATIGNS FOR BROILERS - A LINEAR PROGRAMMING APFROACH(1979-09) ADESIDA, M. A.It has been established that Nigeria has a food problem especially where protein intake is concerned. The poultry industry has been identified as the quickest means of expanding protein supply and lowering its cost within the short run (10-12 weeks for broilers). However, feeds account for 65-75 percent of the total costs of production. Moreover, the numerous problems facing the feed industry coupled with the poor quality of feeds produced have greatly limited the profitability and rapid expansion of the industry. The linear programming (L.P.) tool was utilized to formulate least-cost diets which made use of locally available ingredients. The scarcity and rising costs of the grains (maize and guinea-corn) which provide over 60 percent by weight of broiler feeds prompted the use of cassava flour as an energy providing Substitute. Feeding trials were carried out to test the efficiency of the least-cost diets. The objectives of the study are (1) To use L. P tool to formulate different least-cost rations which meet specific nutritional specifications for broilers, using readily available feed ingredients. Cassava and soya-bean are being tested as energy and protein providing substitutes respectively. (2) To compare the least-cost formulated diets with the diets used by some commercial farms. (3) To find the optimum killing age/weight. (4) To find the rate of Substitution of cassava flour for maize and guinea-corn in the ration for broilers. (5) To determine the economics of using different levels of cassava flour in the rations for broilers. Experimental results showed that starter diets with 24 percent Protein and 5 percent fibre level were better than those with 26 percent protein and 3 percent fib re levels. The computerised starter and finisher diets tested were cheaper and were found to perform better than the commercial diets. For the cassava based diets, analysis of the experimental results showed significant (P < 0.01, P < 0.05, differences in Feed Conversion Efficiency (F.C.E.) in both starter and finisher diets in which guinea- corn and maize were replaced. For weight gain, significant (P 0.01) differences were found only in Starter and finisher diets in which cassava replaced maize. For feed intake, significant differences (P < 0.0l) occurred only in Starter diets in which cassava replaced maize. The diets that caused significant differences were those in which the cassava contents were very high (25-40 percent) and they performed poorest. Even though growth is suppressed due to reduced feed intake caused by the powdery nature of the feeds, it is pertinent to note that diets with 40 percent cassava are still highly tolerable to the birds. Analysis of the weight response as cassava level increases showed that the decrease in weight gain was more rapid when cassava was being substituted for by maize rather than by guinea-corn. This could be attributed to the availability of nutrients or the amino-acid balance of the guinea-corn based diets. Carcass qualities of the birds were not taken into consideration because they are not highly rated in this society. The diets were further investigated to see how the nutrients contents and energy-based ingredients influenced performance, using the multiple linear regression model. The square root and quadratic functions were fitted but the quadratic forms gave the lead equations using the laid down criteria. Feed, protein, energy and the amino-acids intakes proved to be significant explanatory variables for the live- weight gain in the birds. Marginal Analysis was performed on some selected functions. The elasticity of production for energy and protein showed increasing returns to scale in the Starter and finisher diets at the mean value of inputs. As higher levels of inputs are used, diminishing returns is likely to set in. The elasticity of Substitution exhibits a unitary one also at the mean value of inputs. A percentage increase in the energy content of the feed results in an equal percentage decrease in the protein level of the diet. The extent of substitution is limited by the requirement of the birds. Optimum quantities of the energy-based ingredients to produce the Optimum broiler weight gain were determined. Production surfaces, isoquants and isoclines were produced for selected functions of the energy-based ingredients. The rate of Substitution between guinea-com/cassava and maize/cassava were found to be declining with increasing level of output as more of cassava and less of maize or guinea-corn are used. Estimates of revenue over feed costs for the various diets were computed. It was discovered that non-significant differences between diet without cassava was not synonymous with equal revenue yielding diets. In general, the computerised diets without cassava gave higher revenue than the commercial diets. For the diets in which cassava replaced the grains, the revenue accruing to the farmer decreased as the percentage cassava content increased. The revenue from guinea-corn diets were however higher than in the maize diets. Diets with 10 percent cassava had higher or equal revenue with the commercial diets. Diets with higher cassava levels were costlier because cassava is costlier than the grains. It is however envisaged that prices of cassava may fall in the near future because of increases in production. Revenue from the diets was therefore obtained using varying costs of diets as cassava price varies. When cassava was made to assume the same price with guinea-corn, all the computarised diets except that with 30 percent cassava level had higher revenues than the commercial diets. The revenue increased as the cassava prices were reduced but the diets with 30 percent cassava gave the lowest revenue all the time. Optimum killing age determined suggested that broilers be sold at eleven weeks for most of the diets except those in which five and 10 percent cassava replaced guinea-corn. The implications of this study are that efforts to improve returns — poultry farmers must be focused on the cost and quality of feeds. Particular attention must be paid to cheap sources of protein, carbohydrate and oils. There is a very high potential for the use of cassava if its adoption becomes a reality in the future. Further investigations are necessary in testing the least-cost diets with the existing various breeds of broilers. Comparison can also be made of the use of soya-bean and groundnut cake as a protein providing ingredient in broiler diets.Item AN ECONOMIC APPRAISAL OF THE RUBBER PROCESSING INDUSTRY IN BENDEL, OGUN AND ONDO STATES OF NIGERIA(1977-09) ADESIDA, A.This study attempts to assess the economic performance of the rubber processing industry in Bendel, Ogun and Ondo States of Nigeria. The Nigerian rubber industry which experienced a boom in the early 1950's started to face some serious set-backs during and after the civil war which broke out in 13G7. This set-backs were manifested in form of declining productivity and consequent decline in its contribution to foreign exchange earnings. The study which covers the period 7-1 assesses the economic performance of some rubber processing firms in the three states mentioned above in order to identify some of the factors responsible for the set-backs in the industry. The data used for the study were collected mainly through the use of questionnaires and personal interviews. Other sources of data include Federal office of statistics and ministries of Agriculture and Natural Resources in all the three states. Chapter 1 assesses the economic importance of rubber industry in terms of foreign exchange earnings, employment generation and value added to the Nigerian economy. The rubber industry contributed 6.2 percent of the country's total export earnings in 1363. By 1972, it accounted for 4.7 percent of the country's industrial labour force and Chapter 6 uses non-parametric statistical technique to assess the factors limiting expansion and economic performance of the industry. The major limiting factors are lack of capital and inadequacy of raw materials. Labour is not a limiting factor although the industry i9 short of skilled and managerial personnel. A financial analysis for the industry and the estimation of a profit function for rubber processing industry were the major highlights of chapter seven. The financial analysis shows some weak points in financial management positions of some firms while the profit function shows that volume of sales, and selling expenses are the two major factors affecting profits in the processing industry. Some policy recommendations were advanced and these include the need for individual processors to strive to make use of their under-utilized capacity instead of plant expansion. Also, each processor must upgrade his management capability. The rubber commodity board should (i) appoint a committee to look into the present state of affairs of the rubber industry, establish rubber lumps marketing centres and make provisions for price incentives to producers of natural rubber at all levels.Collection