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VALUE CHAIN ANALYSIS OF RICE (Oryza sativa) IN KANO RIVER IRRIGATION PROJECT (KRIP) KANO STATE, NIGERIA

 

 

 

 Format: Ms Word   Chapters: 1-5

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 Jun 15, 2022 |  05:57 pm |  116


PROJECT TOPIC AND MATERIAL ON VALUE CHAIN ANALYSIS OF RICE (Oryza sativa) IN KANO RIVER IRRIGATION PROJECT (KRIP) KANO STATE, NIGERIA

CHAPTER ONE

 

1.0    INTRODUCTION

1.1         Background to the Study

Nigeria, with an estimated population of over 177 million people, is the largest black nation on earth (World Bank, 2014). It constitutes about one fifth of the total population of Sub-Saharan Africa. Nigeria is richly endowed with vast human, physical, and natural resources. The population is not only large, but vibrant, active and talented. As at 2012, Nigeria‟s adult literacy was 52 percent on average, with a higher rate for men (78 %) than for women (60 %) (UNICEF, 2013).  There are about 8 major and more than 250 ethnic groupings, each with its diverse cultural settings and unique potentials for development.  

 

Nigeria is blessed with wide range of climatic, vegetation and soil conditions suitable for rich and diverse agricultural production. It has a total land area of 923,770 square kilometers, out of which 13,000 square kilometers is water and 910,770 square kilometers land.   Forty-four percent of the land area is under permanent pasture, 33 percent under arable crop, 12 percent under forest and woodland 3 percent under permanent crop (Library of Congress, 2008). The country is endowed, not only with veritable agricultural land and natural resources, but with varied climate that is equatorial in south, tropical in the center and arid in the north. The diversity of species of plants and animals is indispensable for both domestic consumption and export.

 

However, despite the oil riches, agriculture still remains the leading sector in terms of employment in the Nigerian economy.  Agriculture constitutes about 75 percent of the rural economic activities, and contributes about 40 percent to the GDP (FMARD, 2012). Before the advent of oil discovery in Nigeria, the economy was basically agrarian. Agriculture was the springboard of Nigeria’s economic development from 1900 to 1960s. Agriculture was contributing more than 60 percent to the GDP with Nigeria as a major exporter of cotton, groundnut, cocoa, rubber and oil palm, in addition to being a major source of foreign exchange. 

 

With the emergence of oil revenue in the seventies, additional impetus was given to the development of the manufacturing sector, which grew at a very rapid rate of 15 percent per annum. Within the same period, export of petroleum has gained momentum and started to replace export-agriculture as a source of government revenue. Thus in the

1970s, three leading sectors emerged; Agriculture, Manufacturing and Petroleum. However, despite its displacement by petroleum, as a source of government fund, agriculture still remained as the most important sector in Nigeria‟s economy due to the following reasons: First, petroleum export remained the exclusive preserve of government, as its main source of income.  Secondly, the manufacturing sector contributes very little to the economy, as more than 70 percent of the proceeds, were sent abroad as factor payment (Manyong et al., 2005). 

 

Nigeria's dependence on oil export alone, made the economy vulnerable and susceptible to shocks generated by international oil prices. The collapse of oil prices of the 1980s was the beginning of Nigeria's economic problems. Revenue from oil export declined from $20 billion in 1980, to $10 billion in 1982. This led to Nigeria's inability to pay its short-term debts and purchase essential imports. The economy, which has already been weakened by corruption and mismanagement, sunk into severe recession (Alkali, 1997).

Nigeria‟s food import bill rose steadily from N24 million in the mid 1950s to N47million, N126 million, N2 billion and N7 billion in 1960s, 1970s 1980s, 1990s respectively. By the year 2011, the import bill for Wheat, Rice, Sugar and Fish put together reached N1.31trillion (FMARD, 2011). Nigeria occupied the 13th position among the 20 poorest countries in the world, despite its 5th position among the richest world oil producers and exporters. Nigeria accounts for nearly a quarter of sub-Saharan

Africa's poor (IFAD, 2009).

 

Rice is a staple crop in Nigeria, though grown everywhere, it is one of the imported crops. Nigeria„s rice consumption has increased significantly over the last decade (6.5 % per annum) and is now estimated at 6 million metric tonnes annually and the total retail market value for rice in Nigeria was estimated at $3.6bn (FMARD, 2012). Furthermore, FMARD (2012) noted that rice has become a staple food of choice in both urban and rural areas accounting for more than 20% of all meals consumed per week by a typical household. Nigeria„s growing demand for rice is forecasted to reach 36 million

tons by 2050 (FMARD, 2012) is a potential source of income and employment

generation in Nigeria given that rice can be grown in all ecologies of Nigeria. Thus it is significant to ascertain its value chain and the opportunity it can offer Nigeria in terms of employment and income generation.

 

According to Webber and Lebaste (2010), the value chain perspective provides an important means to understand business-to-business relationships that connect the chain, mechanisms for increasing efficiency, and ways to enable businesses to increase productivity and add value. It also provides a reference point for improvements in supporting services and the business environment. It can contribute to pro-poor initiatives and better linking of small businesses with the market. Increasingly, the value chain approach is being used to guide and drive high-impact and sustainable initiatives focused on improving productivity, competitiveness, entrepreneurship, and the growth of small and medium enterprises (SMEs).

1.2        Problem Statement

Poverty alleviation and curbing youth unemployment has remained an important challenge in Nigeria’s economic development efforts since the 1980s. A number of interventions were initiated and implemented, especially since Nigeria’s return to democratic rule in 1999. The cumulative effect of the interventions led to an impressive economic growth of about 6.9 percent and an agricultural growth of 8.2 percent (FMAWR, 2008), but failed to reduce poverty and youth unemployment to any appreciable level. In fact by 2010, poverty was by any measure, more severe and devastating than it was thirty years ago (NBS, 2012).  The failure of the interventions was attributed to inherent weakness in the strategy of increasing productivity of the small scale farmers, without taking cognizance of the role market on the poor. In contrast, the value chain approach is a market-oriented approach that starts by identifying and then responding to changing customer needs. It is also a strategic network of individuals, independent organizations and businesses that work together, share the associated risks and benefits, and will invest time, energy and resources to make the relationship work. This influenced the Federal Ministry of Agriculture and Rural Development to adopt the value chain approach, as the operational strategy for the implementation of the agricultural transformation agenda (ATA) of the last administration’s transformation agenda (FMARD, 2011). 

 

The adoption of the value chain approach at national level poses a problem and concern of the availability of skilled manpower with the appropriate expertise and experience to operate the approach. Adopting the value chain approach amounts to grafting a market oriented approach on to a traditional food security system settings where; the operating environment, the policies, laws and regulations, institutional framework and basic elements such as research and extension, human resource development and other support services are all designed specifically to support the food security approach. The skill, knowledge, attitude and behavior of the stakeholders are attuned to executing the food security approach. The successful implementation of the value chain approach critically depends on the ability of the stakeholders (actors, supporters and promoters) to acquire, absorb, disseminate and apply new technological, organizational and institutional innovations in a continuous manner. In addition to that, the primary focus of the value chain, being a demand driven approach, is to effectively respond to changing customer needs through co-operation, communication and coordination.  



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