A Comparative Analysis of Soil Nutrient Status in an Oil Palm Plantation of Varying Ages and a Mature Forest in Rivers State

A Comparative Analysis of Soil Nutrient Status in an Oil Palm Plantation of Varying Ages and a Mature Forest in Rivers State

Chapter One

Objectives of the Study

The broad objective of the study is to examine the economics of small-scale production of oil palm in Rivers State. The specific objectives are to:

identify the techniques being used in the production of oil palm products in the area;
determine factors affecting the resource use efficiency by oil palm farmers in the area;
determine the optimum replacement age of oil palm;
determine the costs and returns of oil palm production; v determine the effect of price on product output; and
identify and describe the constraints of oil palm production.

CHAPTER TWO

LITERATURE REVIEW

The literature for the study will be reviewed under the following subheadings:

The small-scale
Origin and distribution of oil
Oil palm development in
Social and economic value of oil
Methods of oil palm production in
Resource use in oil palm
Oil palm processing in
Funding
Costs and returns in oil palm
The importance of oil palm in Nigerian
Uses of oil palm
Conceptual.
Theoretical
Analytical
Empirical

The Small-Scale Farms

Nigeria, it may be said, is a nation of small farmers. The validity of this statement becomes evident when it is realized that over 90% of Nigeria’s total food production comes from these small farms (Olayemi, 1980). Small-farms, he noted, may look insignificant individually, they collectively form an important foundation on which the nation’s economy rests.

Olayide (1980) classified small-scale farms as those that range from 0.10 hectare holdings to 5.99 hectare holdings and this class he noted, constitute 80.78% of all farm holdings in the country in 1973/74. Upton (1997), classified small-scale farms as those who use hand tools in production. In other words, all family farming by hand is regarded as “small-scale”. “Large scale” production is taken to mean some form of commercial mechanized system. The difference is not really one of scale, since factor proportions differ between the two systems, large farms using more capital per person employed.

In oil palm production, land size may not be a good measure of size or scale. This is because 0.10 hectare for example can only accommodate 14 oil palm plant stands. It therefore becomes reasonable to specify number of stand. Saliu et al (2006), classified small-scale oil palm farm as those having 50 to 100 stands of oil palm plants. This is more meaningful. Those having less than 50 as micro-farms, those having up 500 stands as medium farms and those having above 500 stands as large-scale farms. However, in this study, those having up to 200 stands but using hand tools are regarded as small-scale farms. Technology involved in the production is a measure of scale.

Origin and Distribution of Oil Palm

The cultivated oil palm (Elaeis guineensis Jacq) is believed to have originated in the humid lowland tropics of Africa. The evidence for this is partly geological, partly historical and partly linguistic; fossilized pollen has been found in soils of the Miocene era from the Niger Delta; the tree was mentioned by the first European explorer of the West African coast in the fifteenth century; and unlike coconut palm, the common names for oil palm make no reference to the plant having been introduced from elsewhere (Zeven, 1965; Opeke, 1992; Uguru, 1996; CTA, 2000).

The oil palm is found growing in wild clusters in groves or cultivated in the tropics between latitudes 15^o north and south of the equator. From the centre of origin the oil palm has spread to other developing regions with similar climates. In Africa, it is found in Liberia, throughout tropical West and Central Africa, from coastal Senegal to the area around Luanda in Angola. Oil palm is found sporadically in East Africa.

The African oil palm was introduced to Latin America, at Bahia in Brazil. It has since spread to Honduras and Ecuador, Colombia, Costa Rica, Panama, Venezuela, Suriname and Peru. Today, plantations in Latin America cover some 300,000 ha The story of the oil palm in South-East Asia began in the botanical gardens of Bogor in Java, where four trees, two from either Reunion or Mauritius and two unknown origin arrived via Amsterdam in 1848. From these trees, the Dutch government established demonstration plots in Java and at Deli in Sumatra during the 1850s. Hence the name Deli palm given to their progeny. The region’s first industrial plantations based on Deli trees were founded in Sumatra in 1911 where 32,000 ha were planted. This then spread to Malaysia where 3,400ha were planted. After the Second World War, the areas planted were increased to 92,000ha and 29,000ha at Sumatra and Malaysia respectively (CTA, 2000).

The favourable agro-ecology stimulated keen interest on the part of investors, who have ensured the rapid development of production. Also, the favourable climate enjoyed by South-East Asia, Papua New Guinea followed and became main producer of oil palm in the region (CTA, 2000).

CHAPTER THREE

RESEARCH METHODOLOGY

The Study Area

Rivers State of Nigeria is chosen as the study area. The area is chosen because it has oil palm production as one of its major industries and has participated in oil palm product trade in the 1960s and up to now, oil palm production is still being carried out (Agboola, 1979; Idachaba, 2005). Rivers State was created out of Benue and Kwara States on 27^th August, 1991 by the then Military regime of President Ibrahim B. Babangida. The area is located in the heart of Nigeria and it has two great rivers, Rivers Niger and Benue forming a confluence in the State. Specifically, it is located between Latitudes 6⁰30^I North and 8⁰48^I North and Longitudes 5⁰23^I East and 7⁰48^I East. It is bounded to the north by Niger State, Federal Capital Territory and Nasarawa State, to the South by Delta, Edo and Ondo States, to the West by Ekiti and Kwara States and to the East by Benue, Enugu and Anambra States (Shell Petroleum Development Company of Nigeria Limited, Diary, 2006).

Rivers State is divided into three Senatorial districts – Eastern, Central and Western districts and four agricultural zones; and consists of 21 local government areas. It has a population of 3,278,487 inhabitants (National Population Commission, NPC, 2007). It covers a land area of 30,354.74 square kilometres (Km²). It comprises of the Igala, Ebira, Okun Yoruba, Nupe and Bassa as the main ethnic groups in the State (Zakari, 1991). Map of Rivers State is presented in fig. 3.1 below.

CHAPTER FOUR

RESULTS AND DISCUSSIONS

Socio-Economic Characteristics of Small-Scale Oil Palm

The socio-economic variables are examined to see how they affect oil palm production in Rivers State of Nigeria. They include such variables as age, marital status, household size, educational training, primary occupation, experience in oil palm production, level of investment and income.

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

Summary of Findings

The study was conducted to examine the economics of small-scale oil palm production in Rivers State of Nigeria. The study was undertaken to reawaken the production of the much neglected oil palm industry in Nigeria, Rivers State being the study area.

The study revealed that the age of oil palm producers is concentrated between the ages of 41 and 60 years. This means that there are fewer active participants and perhaps more of those who are physically least able and who show interest in long term fresh investment that are involved in oil palm production.

The study also found that substantial income (average of N69, 437.69 per year) is being earned from oil palm by oil palm producers. That is, an oil palm farmer could earn as much as 35 percent of his annual income from oil palm products. Majority of oil palm producers, up to 80 percent are full-time farmers. It was found that major planting of oil palm was done over 26 years ago. This means that most oil palm currently on the field are above their productive age. The study noted that the age of seedlings planted on the field does not determine the success rate of their survival but the management practices adopted. That is, the maintenance and care of seedlings after planting determine the rate of success. Those who engage in oil palm production do so mainly as a means of additional income. The implication is that no oil palm producer in the area has oil palm production as sole business.

The capitalization of the net income from the oil palm shows that the net present value (NPV) is positive. This shows that the oil palm production is a profitable venture. This is further confirmed by the gross margin analysis which has a margin of N2046844.00. The benefit-cost analysis shows a ratio of 1:1.56, that is, one naira invested in oil palm production will yield N1.56.

The study also found that production has not been able to keep pace with consumption demand. Although there is evidence of increased hectarage of planted oil palm on a yearly basis, this does not show a proportionate increase of output to the extent that it will meet up local demand. Rather, there is evidence of recent importation of palm oil from other countries abroad to fill up gap for the deficit.

The study found that modern cultural practices are not being used to produce oil palm in the area. The highest output recorded in research station of fresh fruit bunch (ffb) is 13.50 tonnes per hectare. This has equally contributed to the low yield of oil palm of 7.99MT/ ha/year as against the optimum yield of 9.60MT/ha/year in the area. The cost of establishing new oil palm plantation is enormous, about N260,252.70 per annum. This makes it difficult perhaps for ordinary poor farmers to venture into it. More so, as it has long gestation period, minimum of four years, before fruiting.

The study revealed that the optimum replacement age is 35 years. At this age, it is required that oil palm be cut down and replaced. This age could be increased if the product price is lowered. This is because lower commodity price is a disincentive. Oil palm production obeys the law of diminishing returns. It means that it has a peak yield after which it diminishes.

A major constraint apart from financial support is processing. Processing is being done by local processing methods. This has contributed to low yield of palm oil. The main problem has been that of inadequate financial support and other incentives to boost palm produce economy

Suggestions for Further Studies.

This study is by no means exhaustive. The study is a spring board which opens more areas for further studies.

The area of produce marketing is not covered in this study. Effective marketing strategy of oil palm produce is capable of stimulating
Oil palm processing is another area which is not covered in this study. The current processing techniques are not effective. Even the oil mills currently in use are not effective as there are huge losses still being
Another area of study is the oil mill effluents which according to Wakker (2004), is the most polluting rural industry in south – East Asia. The nature and effects of oil palm on the ecosystem needs
The ecological survey of oil palm industry in Nigeria needs to be
Oil palm tree is a multi-product plant, apart from the products covered in this study, palm oil and palm kernels, other products can be taken up in order to exploit the full potential of oil
Palm oil and palm kernel were important commodities in the International Trade in the 1950s and 1960s. A technical assessment of the needed impetus for a re-introduction of these commodities, in export, into International Trade is

Conclusion

The study has examined extensively the issues involved in the economics of small- scale oil palm production in Nigeria and Rivers State. The major constraints being that of finance and government policy direction. Oil palm production is a profitable venture which must be encouraged and at the same time it is capital intensive. The current laissez faire attitude by the three tiers of government toward oil palm production cannot lead to the desired transformation in the oil palm industry. Government must be seen to be actively involved in the procurement and distribution of essential resources such as seedlings, fertilizer and also assist the farmers financially. Non-governmental Organization (NGOs) and private individuals must be equally involved if the anticipated revolution is to be achieved in the industry.

If countries like Malaysia, Indonesia and other nations could cause economic well- being of their countries through oil palm, with the nature endowment of resources in Nigeria, oil palm could become a rallying point at causing economic revolution in the rural economy. This can be achieved through little commitment by all and sundry. Oil palm has the potential capability to cause economic revolution in the Nigerian economy. Adequate sensitization of the rural populace will yield the needed impetus for this all important change in the rural economy and Nigeria will be the better for it.

Recommendations

Based on the research findings, the following recommendations are made.

In countries of the Far East, solid research and development has been undertaken backed by a conscious desire to implement research findings. Mastery of technology and rapid mechanization, together with government support to the industry as a systematic and strategic industrial development policy, facilitated private sector investment in this sector. These factors as well as many others have all played a part in the development of the Far East’s rise to prominence in the oil palm industry. This is a challenge to Nigerian government. As part of the agreement on agriculture obligation by World Trade Organization (WTO), governments are required to report the total expenditure on domestic support of agricultural production. The report should include market access measures and other types of support, such as deficiency payment. To improve transparency, efforts have been made to separate the market access measure from other support, that is, price distorting. Some countries allow other countries to bring in commodities at reduced or zero tariffs. The Agricultural Trade Policy Simulation Model (ATPSM) is a model, a deterministic, partial equilibrium, comparative static model capable of such detailed analysis of agricultural trade policy
Proper packaging and storage of the extracted oil to slow down chemical deterioration (rancidity). This need becomes relevant because improper storage has led to sales of palm oil with foul odour in the
Government could encourage transformation of oil palm industry through subsidyand other incentives such as acquisition of land and clearing for plantation production, assist oil palm farmers to use fertilizer for their production.

The need to commission agency(ies) to undertake real cultivation of oil palm by government has become imperative. This agency should be responsible for the establishment of oil palm farms and after tending it to certain age, shall hand it over to private individuals for the care of the farms on charge.
The need for credit policy to offer credit assistance to oil palm producers particularly the purchase of processing equipment for distribution to small-scale oil palm producers should be undertaken by government at all levels in Government policy should include minimum guaranteed producer price which shall be motivating and enforced by government agency through purchase of any excess that may arise as a result of the implementation of the policy. To effect this policy, a Marketing Board, should be established by government solely to fix price which is competitive and motivating, monitor and purchase the excess products that couldarise.
New planting has been low in the study area. It is, therefore, recommended that every household that has land should plant at least one hectare of oil palm. This will help to alleviate poverty of rural
The idea of relying on the naturally dispersed seed for the transformation of oil palm industry should be This can only be so, if there is conscious effort at new planting and replanting of oil palm plantations, with improved cultivars/seeds/seedlings.
Oil palm be cut down at the age of 35 years. This will give opportunity for its replacement without undue interference with the flow of output of oil palm. In other words, such would create a flow of profit in the oil palm
Fertilizer application has been found to increase yield of oil palm. In the area studied, the use of fertilizer to increase production is not being practiced; the only way by which yield can be increased is to invest in the
Oil palm is a low land tree crop which requires certain amount of rainfall, 1600mm minimum per year. This may not be achieved due to erratic rainfall pattern and distribution, therefore, the need to establish irrigation scheme for oil palm plantations becomes

References

Abdullahi, E. (2004). Tomato Marketing in Ankpa Local Government Area of Rivers State. B. Agriculture Thesis Submitted to Department of Agricultural Economics and Extension, Rivers State University, Anyigba. Pp22-26.
Adegeye, A. and J.S. Dittoh (1985). Essentials of Agricultural Economics. Impact Publishers Sobande Avenue, Oremeji Ibadan. Pp 50-62.
Adegeye, A.J. and A.O. Adegeye (2000). Technical and Economic Information in Agriculture (The Oil Palm Elaeis guineensis) in Nigerian Agricultural Development Studies 1(2): 140-155.
Agboola S.A. (1979). An Agricultural Atlas of Nigeria. Oxford University Press. Pp 115- 134
Ahmed, B. (1984). Scale Economies in Maize Production: A Case Study of Zaria Farmers. M.Sc. Research Proposal Seminar Presented to Department of Agric. Economics and Rural Sociology, Institute for Agricultural Research Ahmadu Bello Univsersity, Zaria.
Akinjide, R. (2005). Why nothing works in Nigeria. Jide Ajani (Ed). www.vanguardngr.comarticles/2002/viewpoints/vp102102005.html
Allison, P.A. (1946). Historical Records, the Palm Produce and Rubber Trade in Igala, 1942-44. A Journal of Igala Land Brian Dawtrey (Ed.). 2(2):28-31.
Audu, S.I. and I. K. Abu (1999). Profitability of Small-Scale Processing of Oil Palm Fruits in Rivers State, Nigeria. Nigeria’s Pioneer Agricultural News reporting and Trade Promotion Magazine 3(4):37-40.

Related Topics:

Other Topics