Economic Analysis of Rice Production and Marketing in Uzo-Uwani Local Government Area of Enugu State

Abstract:

The study examined the economics of rice production and marketing in Uzo-Uwani Local Government Area. Using multi-stage random sampling technique, a total of 120 rice producers and marketers were randomly selected. The relevant data for the study were collected through a set of structured questionnaire administered to the selected respondents. The study described the systems of rice production and marketing in the study area, compared the socio-economic characteristics of rice producers and marketers, and their effects on production and marketing of rice, described the rice market and its distribution channels, compared costs and returns of rice production and marketing, identified and examined the major problems of rice production and marketing and made recommendations for enhancing rice production and marketing. The analytical tools used in this study included descriptive statistics, multiple regressions, enterprise budgeting, costs and returns, marketing and gross margin analysis. Result of the study showed that more males than females were involved in rice farming and more females than males in marketing. Majority of both producers and marketers were within the age bracket of 40-49 years. Amongst all the categories of household sizes, those with 1-10 members for both the producers and marketers had more output than others. Majority of the producers and marketers sourced their funds from personal savings. Most farms and markets were of short distances, therefore transport costs was affordable. Most marketers relative to producers were new in rice business. The major socio-economic characteristics that affected the net return from producers and marketers were number of hectares of rice cultivated for the farmers, marital status, number of household members involved in the business and distance from the house to the market for the marketers. The prevalent types of rice production systems in the area were rain fed upland and rain fed lowland. Two methods of rice processing identified were hand pounding system and small mill system. The categories of marketers identified in the area were those who buy paddy rice, store and sell later; those who buy paddy, process and sell; and those who sell both paddy and milled rice. Three main types of markets identified in the area were farm gate markets, designated markets and central markets. The mean sales revenue realized from a 2ha rice farm was calculated using enterprise budgeting to be N240, 000.00. This gave a net profit of N44, 525.00 and return per naira of investment of N1.23.00. In line with the producers output, the wholesaler buys and realized a total amount of N432, 000.00 with net-income of N18.400.00 and return on Naira of investment as N1.45.00. Comparatively, the result showed that the wholesalers made the highest profit in the rice business. Lack of developed/fertile lands, funds, inputs, pest and diseases were found to be the challenging constraints of the producers. While inefficient/high cost of transportation, ineffective storage, inefficient grading and standardization, shortage of labour/manpower are found to be major constraints in the rice marketing-enterprise. Based on the findings of the study, the following recommendations were made feeder roads should be maintained by appropriate government authorities, this will help to retain the affordable transport costs, grading and standardization should encouraged in line with national and international best practices; proper training of both farmers and marketers should be arranged by both government and farmer-associations to encourage record keeping, the financial base of both farmers and marketers should be boosted by Government and donor agencies through the facilitation of loans from financial institutions and granting of subsidies.