Journal of Rural Res. & Information (Vol.6; No.

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RESOURCE-USE EFFICIENCY AND PROFITABILITY OF OFADA RICE FARMING IN OGUN STATE, NIGERIA. O.F. ASHAOLU Department of Agricultural Economics and Farm Management University of Agriculture,PMB 2240, Abeokuta, Nigeria E-mail: oluashaolu2000@gmail.com Mobile: +2348034306676 ABSTRACT This study focused on the resource-use efficiency and profitability of ofada rice farming in Ogun State, Nigeria, Primary data were collected from a cross-section of 240 farm households involved in ofada rice production. A multi-stage sampling technique using a combination of purposive and simple random sampling method was adopted to select the respondents for interview using a well-structured, pre-tested and modified questionnaire. Tools of analysis include descriptive, cost and returns, gross margin and regression analyses. It was observed that literacy level was low among the farmers and majority of them were youths (73%). Most of them (59%) utilized their personal savings for farm operations. Also, about 79% of the farmers operated less than 2 hectares of farmland, and the mean farm size was 1.52 hectares. Average number of parcels operated however decreased as farm size increased. The mean yield of rice increased as farm size increased. Average costs on variable resources constituted about 59% of the total cost of production. The Average Return on Investment (AROI) was estimated at 9.84 while the Rate of Return on Investment (RORI) was 884 per cent, thus suggesting that ofada rice production in the study area is quite profitable. AROI and RORI were higher on sole-cropped rice farms than on rice farms inter-cropped with maize. An average of 66%, 47% and 36% of farmers were technically, allocatively and economically efficient, respectively, in the study area. In other words, a significant allocative and economic inefficiencies exist in ofada rice production in the study area (p 0.05 ). This suggests considerable room for productivity gains for the farms through better use of available resources, given the state of technology. The inefficient small scale farmers (about 79 percent) still dominate in the production of food for the teeming population. Significant structural changes must be made in the process of modernization & getting agriculture moving. To carry out successfully such structural changes major policy variables are needed to formalize & tinker with current laissez faire operations. From the foregoing, there is need for the various governments to gradually deemphasize the fact that the inefficient small farmers should be the center piece of food production in the state and in Nigeria in general. Adequate land should be made available to farmers, majority of who do not own the farmland. They should be encouraged and empowered by enhancing their status on land being cultivated; this could be by contractual arrangement whereby government, rather than individual land owners provide the land. Keywords: Resource-use, efficiency, profitability, ofada rice, Ogun State.

INTRODUCTION
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Rice Production Trends in Nigeria Rice, (Oryza spp.), is the most important staple food for about half of the human race. After wheat, it is the most widely cultivated cereal in the world. It is also the most rapidly growing food source in Nigeria and it has a major influence on human nutrition and food security all over the world. As well banning rice imports in Nigeria, other government policies since 1974 were aimed at encouraging and boosting local rice production. In spite of these programmes, local rice production has not kept up with the domestic consumption demands of the Nigerian populace and, consequently, rice is still imported. The production increase has not been enough to meet the consumption demand of the rapidly growing urban population, who has a great preference for parboiled rice (Singh et al, 1997). This situation led to acute demand for parboiled rice in the 1990s, which contrasted with Nigerias self sufficiency in rice during the 1960s. However, rice production is limited by many constraints. The low turn out and instability in rice output, and a consequent rise in its importation to meet the skyrocketing demand, created a serious drain on Nigerias foreign exchange reserve, which stood at US$407.5 million in the 1960s but dropped to US$58 million in the 1990s (IRRI, 1991). The local rice, called ofada (OS6 variety), whose consumption has long been abandoned by the elites for imported rice brands, is now widely preferred by many guests at parties, restaurants and so on. The local rice was relied upon by the down-trodden, poor citizens, looking for where the next meal would come from. However, output of local rice in Ogun State with respect to national output, has not been encouraging over the years (Table 2).

Table 2: Percentage Contribution of Ogun State to Nigerian Rice Output, 1996-2005.

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Output for Ogun State(MT) 1996 16,706 1997 15,940 1998 17,290 1999 13,801 2000 12,372 2001 10,500 2002 7,855 2003 7,932 2004 9,250 2005 13,413 Sources: Computed from Data in: (i) CBN, (2005) (ii) OGADEP, CAYS 1996-2005 Report Source: OGADEP STATISTICS, 2005

Year

% of National Output 0.54 0.49 0.53 0.42 0.38 0.38 0.25 0.24 0.26 0.38

The erstwhile lowly priced ofada rice is now a status symbol among the privileged class. The elites change to ofada rice brand has some implications on the poor masses of this country. The ofada price is now spiraling beyond the reach of the common man.The rising import bills of imported rice brands necessitated the Federal Governments ban on them and also with the need to encourage local production. With various surveys done on the scope of consumption of ofada rice, yet there has not been adequate arrangement for sufficient planting and harvest of the local substitute to supposedly banned imported rice brands. A study into the production of ofada rice as well as steps to boost local production and yield of this rice variety becomes important. The study will facilitate insight into the economic and technical efficiencies of key productive inputs in order to know areas of possible adjustments to augment farm incomes.In view of this scenario, issues and questions relating to the existing production status and economic prospects of the expansion of ofada rice production in terms of income generation, resource allocation, production techniques and profitability, were raised and addressed. The study therefore examines the existing farm-size patterns and fragmentation levels; determines the technical, allocative, and economic efficiency of input use; and assessing the costs and returns structure, hence, economic viability of ofada rice farming.

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Research Hypotheses The null hypotheses for the study are that (i) there is no significant difference in the mean of technical efficiency between the smallest and the largest farm-size groups (ii) there is no significant difference in the absolute values of returns-to-management between the smallest and the largest farm-size groups. (iii) all the key productive inputs are economically inefficient. RESEARCH METHODOLOGY The Study Area The study area was Ogun State. The State is located within the rain forest belt of the tropical region (situated between Latitude 6.2oN and 7.8oN and Longitude 3.0oE and 5.0oE). It covers an estimated land area of 16,409.29 sq. km, seventy (70) percent of which is suitable for arable crop production (FGN, 2009). The state shares boundaries with Oyo and Osun states to the North, Lagos state and Atlantic Ocean to the South, Republic of Benin to the west and Ondo State to the East. The annual rainfall ranges between 1,000mm to 2,000mm, having bimodal pattern with the peaks at May/June and September/October. The temperature range is between 20oC and 30oC, highest in March and lowest in July. The major rice-producing areas of the State were mapped out for the study. Agriculture remains the mainstay of the economy of the State. It has a fertile soil that supports the growth of rice, cowpeas, yams, cassava, oil palm, citrus, vegetables and many other food and cash crops. In addition, a number of farmers in the state engage in livestock production such as poultry, cattle, goat and sheep. Data Collection and Sampling Techniques The study utilized primary data obtained from a cross-sectional survey of 240 farm households involved in ofada rice production in the rice producing areas of Ogun State for the 2006 farming season. A multi-stage sampling technique using a combination of purposive and simple random sampling method was adopted to select 240 respondents for interview using a well-structured, pretested and modified questionnaire. Smallholder rice farmers selected from ten (10) villages of Ikenne zone of the Ogun State Agricultural Development Project (OGADEP) agricultural zones were interviewed. The villages chosen
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were Mokoloki, Obafemi, Someke, Orile-Imo, Itori Oke, Efuro, Isiun, Ayiwere, Oluwo Oke, and the popular Ofada village. Farmers were categorized into three (3) groups based on farm sizes cultivated. The farm size groups designed for the study are as follows : Group IRelatively farms under 0.10 to 1.99 hectares Group II...Relatively medium farms from 2.00 to 3.99 hectares Group III..Relatively large farms 4.00 hectares Analytical Framework. To achieve the study objectives, the analytical tools used include descriptive, cost and returns (gross margin) and regression analyses. Cost and Returns Structure Analysis: The gross margin approach for the economic viability objective is expressed as Gross Margin (GM) = Total Rev Total Variable Cost(1) where: Total Rev = rice output/ha x Market price = P x Q(2) GM = TR TVC GM = P.Q TVC ...(3) TR = Total Revenue TVC = Total Variable Cost = Pixi = P1x1 P2x2 .. Pnxn..(4) P = Price / kg of rice (N) Q = Quantity of rice (kg) Cost Structure Analysis Cost structure = Cost of variable inputs of interest x 100% (5) Total Cost TVC x 100% TC Cost structure = Fixed cost of interest x 100% (6) Total cost = TFC x 100% TC Where TVC = Total variable cost TFC = Total Fixed cost TC = Total cost Regression Analysis (Stochastic Production Frontier): Following Battese and Coelli (1992) and Chavas et al (2005) in a two stage estimation approach, the specification of the

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linearized double-logarithmic form of the stochastic production frontier equation adopted for technical efficiency is expressed as: In Yi = 0 + 1 lnX1 + 2 lnX2 + 3 lnX3 + 4 lnX4 + 5 lnX5 + 6 lnX6 + 7 lnX7 + 8 lnX8 +U1 V1 (7) Where i = refers to the ith farm in the sample. Y = rice output in kg X1 = Farm size in ha X2 = hired labour in mandays X3 = family labour in mandays X4 = quantity of fertilizer used in kg X5 = cost of other intermediate materials including herbicides insecticides etc. (N). X6 = No. of extension visits/contacts. X7 = seed variety, dummy variable: 1 if improved variety, 0 if local variety. X8 = quantity of seeds used in kg. 2 vi = random variables which are assumed to be iid. N(0, v ) and cannot be influenced by the farmer. ui = non-negative random variables which are assumed to account for technical inefficiency 2 in production and are often assumed to be iid /N (0, u ). = vector of production function parameters to be estimated. i = 1, 2, 3.........................................n farms. This equation was estimated using frontier 4.1. econometric software which also provides estimates of the technical (TE) efficiency for each farmer. The allocative and economic efficiency estimates were obtained for each farmer and expressed as AEi = (P x Yi / R*) .(8) TEi Where i = 1, 2, 3 n farm P = price of rice /Kg. Y = output of the ith farming household kg/ha TE = estimate of technical efficiency of the ith farmer R* = highest revenue recorded per hectare among farmer in the sample. The overall economic efficiency was obtained as EE = TE x AE ..(9) Where EE = Economic efficiency TE = technical efficiency AE = allocative efficiency. Also, the effect of socio-economic variables on production efficiency was analyzed via the inefficiency equation stated as U = f(0 + 1Z1+ 2Z2+ 3Z3 + 4Z4 + 5Z5 + 6Z6 + 7Z7 + Z8Z8 + 9Z9 + 10Z10+ 11Z11+ ei) (10) Where
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U = estimate of overall economic efficiency of the farmers Z1 = Age (years) Z2 = Gender (male = 0, female 1) Z3 = Educational background (years of formal education) Z4 = Farm size in hectares Z5 = Household size Z6 = Cropping pattern Z7 = availability of improved seeds, 0 if available, 1 if not available Z8 = Tenancy status Z9 = availability of fertilizer 0 if available, 1 otherwise Z10 = Credit measured in N Fragmentation/Simpson index Simpson index is defined as SIM = 1 - ( iAi2/A2) ( Blarel et al., 1992). (11) where, Ai = area of the ith parcel; A = iAi, is the total farm area. The index ranges between 0 and 1. A value of zero indicates complete land consolidation (one parcel only), while the value of one is approached by farms of numerous parcels of equal size. Test of Hypothesis In testing hypotheses (i) and (ii), a method of the 'difference between two means' of the independent populations was used. The null hypothesis, Ho, is stated as: Ho: L = s, or L - s = 0 .................................................................................(12) and the alternative hypothesis, Ha is, Ha : L - s 0, or L s,...........................................................................................(13) The test statistic is, (xL-xS) - (L-s) tc = 2L + 2S nL ns ....................................................................(14) where xL xs = sample mean of large farms (Grp I) = sample mean of small farms (Grp III) 2 L =variance of sample of large farms 2 s = variance of sample of small farms nL = sample size of large farms ns = sample size of small farms tc = computed value of t- statistic The decision rule is, accept Ho if /tc /<tT , where tT is t-tabulated of the student's tdistribution with V degree of freedom . In testing hypothesis (iii), the signs of the farm size regression coefficients were observed, and appropriate tests carried out. Here a test of significance approach was used to verify the truth or falsity of the stated Ho. The test criterion is stated thus: Ho:i = 0 .......................................................................................................... (15)
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Ha: i 0 .................................................................................................... (16) The test statistic tc = i -0

S. E ( )

i = i)- ........................................................................... (17) where i = estimated farm size regression parameter.

S.E.(

S.E. = standard error of regression The decision rule is to reject Ho if /tc/>tT , or, accept Ho if /tc/< tT If Ho is rejected, it means that i is statistically different from zero. That is, a relationship exists between the output per net cropped hectare for the total value of crop production and farm size. RESULTS AND DISCUSSION Socio-Economic Characteristics of Farmers The socio-economic and cultural characteristics affecting farmers generally in the study area have influence, not only on the magnitude of output or incomes of farmers, but also on their ability to improve on the size of cultivable farmlands. The socio-economic and cultural features considered in this study include age, household size, sex, level of education, farming experience, marital status and average farm size cultivated (Table 3). Age is an important factor influencing the productivity and innovative ability of farmers. It is believed to have an inverse relationship with productivity and innovativeness, all things being equal. Results showed that about 71 percent of farmers fell within the 3150 years age bracket and this implies that farmers belong to the economically active category of the population. The overall size of the farmers households is made up of the children, the wives, and the dependent relatives. This has implications on family labour usage and availability. Majority of the respondents (about 96 percent) had between 3 and 8 persons per household. The modal household size-range is however 5-6 persons (about 56 percent). The level of education of a farmer is assumed to influence his level of awareness and ability to adopt innovation. About 44 percent of the farmers had no former education while the rest had one form of education or the other. In this study area, the farmers count more on their experience to increase productivity than their educational attainment. Interestingly, more than 60 percent of farmers had between 11 and 30 years of farming
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experience. Majority of ofada rice farmers (about 79 percent) operated small size of farms of less than 2.0 hectares. The mean farm size was 1.52 hectares. On gender, majority (85percent) of farmers were males since women were generally not allowed to own land and as such did not have secured independent access to land except in cases when they help their husbands in the areas of harvesting and processing. Even the mode of land acquisition among the male respondents was by lease arrangement (about 63percent) while the rest either inherited (about 34percent) or purchased (about 3percent) the cultivated land. Almost all the respondents (about 76percent) did not use fertilizer for rice production. Table 3: Description of Socio-Economic Variables and Summary Statistics Characteristics Age (years) 30 31-40 41-50 51-60 >60 Total Mean Sex Male Female Total Marital Status Single Married Divorced Widowed Total Household Size 2 persons 3 1.3 1.3 14 192 4 30 240 5.8 80 1.7 12.5 100.0 5.8 85.8 87.5 100.0 204 36 240 85 15 100.0 85 100.0 3 48 123 60 6 240 46.2 1.3 20 51.3 25 2.5 100.0 1.3 21.3 72.5 97.5 100.0 Frequency Percent Cumulative %

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3-4 persons 5-6 persons 7-8 persons 9 persons Total Mean Farming exp, yrs 10 11-20 21-30 31-40 40 Total Mean Avg farm size, Ha 1.00 1.00-1.99 2.00-2.99 3.00-3.99 4.00 Total Mean Educational level No formal education Attended elem. Schl Completed elem. Schl Completed sec. schl Post secondary schl Total Source: Field Survey, 2006

33 135 63 6 240 6 54 90 54 36 6 240 20.13 117 72 41 6 4 240 1.52 105 9 117 6 3 240

13.8 56.3 26.3 2.5 100.0

15.1 71.4 97.7 100.0

22.5 37.5 22.5 15 2.5

22.5 60 82.5 97.5 100.0

48.75 30.00 17.08 2.50 1.67 100.0

48.75 78.75 95.83 98.33 100.0

43.8 3.8 48.8 2.5 1.1 100.0

43.8 47.6 96.4 98.9 100.0

Size-wise Distribution of Sample Farms: Table 4 shows the size-wise distribution of sample farms. About 79 percent of farmers cultivated farms of less than 2 hectares and 20
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percent of them owned the land cultivated. Whereas only about 7 percent cultivated farms of 4 hectares and above and most of these farmers (about 42 percent) owned the farmland they used. Fragmentation is a common feature of the agriculture of this area and it is more prevalent on small farms than on bigger farms. An average small farmer operates about 4.68 highly dispersed parcels of land, with fragmentation (Simpson) index of 0.67, as against 3.61 and 3.14 less dispersed parcels of land being operated by farmers in size groups II and III with lower fragmentation index of 0.46 and 0.31 respectively. It should also be noted that yields of rice for both normal and improved varieties were generally lower on small farms than on bigger farms in the study location. Table 4: Size-wise Distribution of Sample Farms, Using Selected Characteristics. Characteristics Number of Farms Average Parcel Number Mean Simpson Index Owned Land (%) Average Extension Index Mean Rice Yield (Improved Variety) (Kg/ha) Mean Rice Yield (normal variety), (Kg/ha) Source: Field Survey Data, 2006. Note: (i) Figures in parentheses indicate percentage of total. Sources of Farmland for Farmers Table 5 displays the farmers methods of land acquisition in the study area. The Table shows that about 20 percent of the farmers were either freely given or inherited the land they use for rice production whereas only 3 percent purchased their land. A higher percentage of farmers (about 69 percent) got their farmland by purchase, lease or pledge and this will reflect negatively on the cost of land and hence will be part of their expenses that could also reduce farm profit.
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Size Group 1 189 (78.8) 4.68 0.67 20.0 0.45 1,270 1,120

Size Grp. II 34 (14.2) 3.61 0.46 31.1 1.3 1,790 1,300

Size Grp. III 17 (7.1) 3.14 0.31 42.0 2.2 2,220 1,780

All Farms 240 (100.00) 4.36 0.60 23.3 1.3 1,793.3 1,400

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Table 5: Farmers Methods of Land Acquisition Land Acquisition Purchase Inheritance Lease Gift Pledge Percentage 3.3 20.0 63.0 3.3 2.9

No answer 7.5 Total 100.00 Source: Field Survey, 2006 Costs and Returns Structure in Ofada Rice Production This analysis was undertaken by budgetary technique in which various components of costs and returns of an average ofada rice farm planted sole was determined on per hectare basis and compared with costs and returns when intercropped with maize as was common in the study area. The results are as given in Table 6. The study found out that an average ofada rice farmer, planting only rice, recorded a mean output of 1793.3 kg per hectare (for improved variety). Selling the improved processed rice variety at an average price of N210.00 per kg, an average farmer in the sample realised a gross value of output estimated at N376,593 per hectare. Total variable cost of production was estimated at N17,058.80 per hectare leaving a gross margin of N359,534.20 per hectare and a net income (profit) to the tune of N347,421.40 per hectare, for ofada rice planted sole during the 2006 production season. The average return on investment was estimated at 9.84 while the rate of returns on investment was 884 per cent, thus suggesting that ofada rice production in the study area is quite profitable. Table 6: Per Hectare Costs and Returns Structure (N) Description SoleIntercropping cropping Total Revenue (N / Ha) Value of rice output at harvest N376,593.00 Value of rice inter-cropped with maize 143,000.00 Value of harvests consumed at home 26,000.00 13,000.00 Less: Total variable cost 17,058.80 14,240.00 Gross Margin (N / Ha) 269,869.20 128,760.00 Less: Total fixed cost (N / Ha) 12,112.80 10,002.00 Total cost (N / Ha) 29,171.60 24,242.00
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Net farm income (NFI or net margin) (N / 347,421.40 Ha) Profitability indicators Average Return on Invt (AROI) i.e. BCR 12.91 Rate of Return on Invt (RORI) i.e. 1191 NFI/TC (%) Source: Field Survey Data (2006).

118,758.00 5.90 490

Table 7: Average Cost Structure of Ofada Rice Farmers (Sole Cropping). Cost items Variable Costs Seed cost Fertilizer Pesticide cost Fertilizer application Weeding cost Clearing cost Planting cost Bird scaring cost Harvesting cost Processing cost Total Variable Cost Fixed Costs Hoe Cutlass cost Hand trowel cost Shovel cost Axes cost Total Fixed Cost Total Cost Source: Field Survey, 2006. Amount N/ha 3984.66 2223.68 1125 439.583 1703.03 3013.68 2655.56 3131.636 1115.69 484. 285 17058.80 1346.97 8089.14 93.33 1110.35 1473.02 12112.80 29171.60 % of Total cost 13.7 7.62 3.86 1.51 5.84 10.30 9.10 1.08 3..82 1.66 58.50 4.62 27.70 0.32 3.81 5.05 41.50 100

Technical Efficiency of Resource Use The results of technical efficiency were shown in Table 8. The decline in technical efficiency with reference to farm size however, contradicts a-priori expectation since it was expected that increase in farm size would reduce farm fragmentation and hence increase the efficiency of tractor use. Table 8: Technical Efficiency Estimates Variables OLS estimates Coefficients t-value Stochastic Production Frontier Constant 7.648* 14.884 In Farm size 0.555* 2.673
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MLE estimates Coefficients t-value

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In hired labour 0.244* 1.360 In family labour 0.0806 0.673 In fertilizer 0.1358* 1.236 In Cost of herbicides & insecticides -0.0342 -0.379 In No. of extension visits/contacts. 0.212 1.421 In seed variety 0.375 0.564 In quantity of seeds - 0.367* -2.134 Returns-to-Scale 0.5678 Adj. R-Square 0.635 F-ratio 3.466 Technical Efficiency Constant 0.777* Age 0.0172* Gender 0.0222 Education -1.954* Farm size 0.0516* Household size -0.078* Cropping pattern 0.2032 Seed variety 0.959* Tenancy status 0.0196 Fertilizer use 0.77* Credits 0.005 Diagnostic statistics Sigma squared (v) 0.0860 Sigma squared (u) 0.6730 Source: Computed from survey data (2006) Summation of all elasticity coefficients of significant variable inputs * indicates significant level (p 0.05)

5.54 2.06 1.22 -2.540 2.66 -2.44 0.73 2.20 0.68 2.57 0.044

The distribution of technical efficiency estimates in Table 9 suggests that about 40 percent of farms fell around the mean technical efficiency level and this is within the 0.61 0.80 technical efficiency range. About 3 percent of farms had technical efficiency of less or equal to 20 percent whereas about 26 percent of farms were operated with over 80 percent technical efficiency. Table 9: Distribution of technical efficiency estimates Level of efficiency Frequency Percentage 0.20 8 3.3 0.21 0.40 26 10.8 0.41 0.60 49 20.4 0.61 0.80 95 39.6 > 0.80 62 25.8 Total 240 100 Mean TE = 0.66; Minimum TE = 0.10; Source: Computed from survey data (2006)
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Cumulative % 3.3 14.1 34.5 74.1 100

Maximum TE = 0.96

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Table 10: Distribution of farmers by allocative and overall economic efficiency Level of Frequency Allocative Efficiency Economic Efficiency Frequency Percentage Frequency Percentage 0.20 3 1.3 96 40.0 0.21 0.40 127 52.9 118 49.2 0.41- 0.60 78 32.5 21 8.8 0.61 0.80 30 12.5 5 2.1 > 0.80 2 0.8 0 0.0 Total 240 100 240 100.0 Mean AE = 0.47 AE Range: 0.18 1.00 Source: Field Survey data, 2006 Technical Inefficiency Estimates Table 11 displays the results of the socioeconomic factors contributing to inefficiencies on ofada rice farms. The results reveal that the variance gamma (), which is the fraction of the total variance associated with technical inefficiency (=U2/(V2+U2)), is estimated to be 0.72 (p < 0.01) implying that about 72 percent of the variation in output among ofada rice farms is due to differences in technical efficiency. It is also revealed that while increase in farm size and the use of herbicides are significantly and positively associated with increase in technical inefficiency, increase in age, and of course farming experience significantly reduces technical inefficiency. Meanwhile personal communication with some extension agents in the study area and information obtained from the farmers, suggests that this inefficiency may not be unconnected with delay sometimes experienced while trying to use tractor services of Agro-service centres available in the study area. TABLE 11: Stochastic Production Frontier and technical inefficiency estimates Variable Coefficients t-value Constant -1.012 -0.83 * Age -0.029 -1.78 Gender 0.295 0.71 Education 0.006 0.24 Farm size 0.178* 2.60 Household size 0.470 1.52 Cropping pattern -0.058 -0.15 Seed variety 0.743 1.61 * Tenancy status 0.818 1.77 Fertilizer use -0.236 -0.57 * Credits 0.711 1.81 Diagnostic statistics -0.000 -1.19 Sigma squared (v) 0.149 1.48 * Sigma squared (u) 0.719 2.55 Source: Computed from survey data (2006). * indicates significant level (p 0.05)
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Mean EE = 0.36 EE Range: 0.08 0.91

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Results of Tested Hypothesis All the null hypotheses tested were rejected (p 0.05). The results showed that there were differences in the mean of technical efficiency between the smallest and the largest farm-size groups. Technical efficiency was higher on relatively largest farm size group than the relatively smallest farm size group. In the same vein, the returns-tomanagement was larger on the relatively largest farm size group than on the relatively smallest farm size group. Also, not all the key productive inputs in ofada rice production are economically inefficient. Only the land variable i.e. farm size, showed a weak marginal value product, probably due to its uneconomic size and high fragmentation index. Majority of farmers operate an average of 1.52 hectares of land for rice cultivation. Problems Associated with Ofada Rice Production Table 12: Distribution of rice farmers by problems confronted Production constraints Frequency Percentage
*

Lack of credit facilities Lack of fertilizer Price fluctuation Transportation/poor access road Pest/disease attack High cost of labour and lack of labour saving machine High cost of tractor hiring High cost of other inputs (pesticides, herbicides) Erratic rainfall and climatic related problems Theft / Pilferage Source: Field Survey, 2006. Note * Due to multiple responses

121 104 55 30 213 97 172 73 111 45

50.5 43.2 22.9 12.5 88.8 40.51 71.77 30.26 46.2 18.6

Rankin g 3 5 8 10 1 6 2 7 4 9

CONCLUSIONS AND RECOMMENDATIONS It was observed that a generally low literacy level existed among the farmers, majority of whom were youths (73%). About 79% of them operated less than 2 hectares of farms, with an average number of parcels being 5, while the mean farm size was 1.52 hectares. Average number of parcels operated however decreased as farm size increased. The mean yield of rice increased as farm size increased. Average costs on variable resources constituted about 59% of the total cost of production. Rate of Return on Investment (RORI) and Average Return on Investment (AROI) were higher on sole-cropped rice farms than on rice farms inter-cropped with maize. Farm size, fertilizer, hired labour and seed variety showed positive and significant relationship with rice output. However, farm size, household size, cropping pattern, seed
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variety and credit use contribute positively to technical inefficiencies of input use among farmers (p 0.05). An average of 66%, 47% and 36% of farmers were technically, allocatively and economically efficient, respectively, in the study area. In other words, significant allocative and economic inefficiencies exist in ofada rice production in the study area. This suggests considerable room for productivity gains for the farms through better use of available resources, given the state of technology. Since positive relationship exists between farm-size and rice output, adequate land should be made available to farmers, majority of who do not own the farmland being cultivated. They should be encouraged and empowered by enhancing their tenancy status; this could be by contractual arrangement whereby government, rather than individual land owners provide the land. The inefficient small scale farmers (about 79 percent) still dominate in the production of food for the teeming population. The current state of traditional agric & its structural characteristics show quite clearly that a continuation of this traditional structure is incapable of meeting the future food & fibre needs of the country. Significant structural changes must be made in the process of modernization & getting agric moving. To carry out successfully such structural changes major policy variables are needed to formalize & tinker with current laissez faire operations. From the foregoing, there is need for the various governments to gradually deemphasize the fact that the inefficient small farmers should be the center piece of food production in the state and in Nigeria in general. These farmers refuse to grow whereas the population keeps growing at an alarming rate. This view was shared by Aromolaran (2008) when he said that the small farmers do not have what it takes to take any State or the nation in particular, to the promised land. We need to re-focus our efforts and scarce national resources on the recreation of a new generation of Nigerian farmers. REFERENCES Aromolaran, A.B. 2008 Removing Bottlenecks to Internal Trade and Investment in Agricultural Commodities. Invited Paper Presented at the 6th Nigerian Agricultural Summit, Hilton Hotel, and Abuja, Nigeria. December 6-7, Organized by the Nigerian Economic Summit Group (NESG). Battese, G.E. and T. Coelli. 1992. Frontier Production Function and Technical Efficiency: A Survey of Empirical Applications in Agricultural Economics. Agricultural Economics 7:185-208. Blarel, B.P., Hazell, P., Place, F. and J. Quiggin. 1992 "The Economics of FarmFragmentation: Evidence from Ghana and Rwanda" The World Bank Economic Review 6 (2): 233-234.

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