ABSTRACT
The
study focused on the Effects of Climate on revenue from Oil Palm Production in
Southern Nigeria. The broad objective was to examine the effects of climate
change variables on Oil Palm Production. The specific objectives are to: (i)
identify farmers’ perception on climate change variables in the study area;
(ii) identify the choice of adaptation strategies and determine the factors
affecting the choice of adaptation strategies by farmers in the area; (iii)
estimate the cost and returns associated with the choice of each adaptation
strategies; (iv) determine the effect of climate change variables on oil palm
production; (v) identify the constraints encountered by farmers in adopting
climate change adaptation strategies; (vi) make recommendations on the basis of
findings. Multistage Sampling method was used to select 171 respondents, from
three states (Imo, Ondo and Delta) for the study. A set of structured
questionnaires was administered to the respondents to obtain required
information. Data were analysed using descriptive statistics (to achieve
objective 1 and 2), multinomial logit regression (to achieve part of objective
2), Partial budget (to achieve objective 3), Ricardian model (to achieve
objective 4), Exploratory factor analysis (to achieve objective 5), and ANOVA
test. Results showed that the dominant perception of farmers on climate change
variables, tend to be that sunshine hours has been increasing (or is serious)
in the study area. The adaptation strategies practiced by farmers in the study
area include use of resistant varieties, mulching, purchase of water for
irrigation (for nursery), planting trees, intercropping, crop diversification,
changing planting dates, migration for income and no adaptation. The
Multinomial logit regression model was used to capture choice probabilities
across the various options of climate change adaptation strategies. Results of
multinomial logit model highlights that farm size, household size and income
influenced adaptation positively while frequency of extension contact
influenced adaptation negatively. Results of partial budget which looked at one
adaptation strategy at a time showed that the adaptation strategies are
profitable (worthwhile) and can increase farm income. The Ricardian model was
employed to test the relative importance of climate normals (average
temperature and rainfall) in explaining the annual revenue from Southern
Nigeria’s Oil Palm agriculture. The results showed that increase in temperature
will reduce annual Revenue while annual Revenue increases with increase in
rainfall, for all farms. The identified constraints encountered by farmers in
adopting climate change adaptation strategies included production constraints,
information and training, lack of inputs and lack of technology. The findings
underscore the need for farmers' education, poverty alleviation and increased
access to technologies and more efficient inputs as potent tools for climate
change adaptation in the area. The study therefore recommended that due to
increasing investment of Nigerian government to increase oil palm production,
more research and analyses of climate change on its agriculture should be
encouraged. Annual Revenue of farmers can further increase if research and
extension, the private sector, NGOs encourage and ensure increase in farmer
training, availability and accessibility of inputs.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND INFORMATION
The oil palm (Elaeis guineensis)
is indigenous to West Africa. The main oil palm growing area in Nigeria is the
south especially the south-Eastern and mid western regions ecologically
conforming to the tropical rain forest and derived savannah portion of Nigeria.
Annual rainfall in these regions ranges from 1500mm in the derived savannah to
3000mm in the tropical rainforest. The primary products of commerce of the oil
palm tree are palm and kernel oil and kernel cake. Global production of palm
oil has doubled over the last decade. Around the world, vegetable oil
production totals approximately 150 million metric tons per year, of which
approximately one-third is palm oil (Food and Agriculture Organization, 2013).
In Africa, the oil palm has been
cultivated for its oil, and its range of cultivation extends from the probable
origin in Guinea to the west and central Africa. The notable growing areas
include Nigeria, Coted’voire, Cameroon, Liberia, Zaire, Ghana, Sierra Leone,
Togo, Benin, Congo and Angola. (Raw Materials Research and Development Council,
2004).
It is a source of food stuffs and
medicines, its sap is used to make palm wine and its fibres are also used for
various purposes. However, the large scale monoculture oil palm plantations
being promoted today are geared towards two main objectives. Their primary
purpose until now has been the extraction of palm oil ( from fresh oil palm
fruit) and palm kernel oil (from its kernel or seed) for the production of
edible and industrial oils. More recently a second major objective has emerged,
the production of biodiesel from crude palm oil. Domestic annual production of
palm oil stands at about 785,000MT from the 2.5million hectares of wild groove,
small holdings and large estate planting. However, the current annual demand is
in excess of one (1) million metric tons of palm oil (RMRDC, 2004). There is
thus a clear deficit. The supply gap, high returns on investment and bright
external trade opportunities in the oil palm business makes investment in the
oil palm sector a safe and profitable venture (RMRDC, 2004).
Nigeria’s production system is
mostly based on semi-natural groves. The medium and smallholder plantations and
the large estate plantations represent a very small share of the
Indeed,
yields from wild harvest are about 1.5 tonnes of fresh fruit bunches (FFB) per
hectare, while they are 5 hectares on average in the plantations (PIND, 2011).
Wild trees correspond to the Dura variety. Pisifera and Tenera are the other
two varieties available in Nigeria. Oil palm farmers prefer Tenera, a
crossbreed between Dura and Pisifera, because it can yield 30% more oil than
the equivalent fruit weight of Dura (PIND, 2011). Seeds are produced and
provided by the Nigerian Institute for Oil Palm Research (NIFOR).
Palm oil is the main vegetable oil
consumed in the country and it is consumed in all regions. It accounts for 25%,
on average, of total fat supply in the country between 1990 and 2009 (FAOSTAT,
2012). Although the global fat supply in Nigeria increased during the 1990-2009
period, the share corresponding to palm oil slightly decreased. Demand is
concentrated in the South almost of the industries are located in this area.
(Gourichon, 2013).
Oil
palm produce (especially palm oil and palm kernel ) had been the bedrock of
Nigeria’s foreign exchange earnings in the years before the oil boom of the
1970’s.Rural women often engage in agro-based food processing and preservation
activities on a small scale basis such as garri making, maize processing, fish
smoking and palm oil extraction (Okorji,1991).
.Nevertheless, palm oil will
continue to play a positive role in global supply and demand equation of the
oils and fats industry. The global demand and consumption of palm oil is
increasing fast and is expected to grow more given the exponential growth in
population, income and myriads of emerging uses. Thus increasing production of
oil palm and subsequently its products is an imperative across the globe particularly
Nigeria. (Dimelu and Anyaiwe,2011).
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