Analysis of Value Chain in Rice Production Systems in Ebonyi State, Nigeria

Abstract

This study analyzed the value chain in rice production systems in Ebonyi State, Nigeria. Purposive and random sampling techniques were used in the selection of respondents for the study. The Rice value chain actors comprised rice farmers, processors and traders. Data for the study were obtained from primary sources using questionnaire. Data collected were analyzed using descriptive statistics, Functional analysis, Value Chain Map, Costs and Returns analysis, Linear Programming technique, Ordinary Least Square Regression analysis and Analysis of Variance (ANOVA). The Functional analysis showed the functions of the rice value chain actors to include; input supply, production, trade in paddy, processing and marketing. The structure of the rice value chain was depicted with a Value Chain Map and showed the different levels of the rice value chain in Ebonyi State. The analysis of the costs and returns of the rice farmers adopting the three production systems showed that Swamp production system had the highest net return of N65, 200 per hectare, followed by Lowland and Upland production systems with net returns of N46,500 and N30,000 respectively. Labour was a significant component of input cost across the three production systems. The Returns on Naira spent was 37.3%, 27.4% and 20.5% for Swamp, Lowland and Upland rice production systems respectively. The net return of the processors was N1, 980 per metric tonne of milled rice while the rice traders had a net return of N9, 890 per metric tonne. The analysis of Return on Naira spent was highest for Swamp rice production system (37.3%) followed by rice processing (33%). Rice trade had the lowest return on Naira spent of 6.4%. The analysis of cost and returns associated with the processing of a tonne of milled rice showed that the total margin accruable to traders in the value chain of rice in Ebonyi State from paddy to further processing was 40.75% of the total value. The Linear Programming results suggest that only Swamp production system with a value of 2.64 hectares qualifies for allocation of production resources, and the value of the objective function increased by 164% over the existing income. The results of analysis of the factors that affect profit earned by Upland rice farmers in Ebonyi State showed that the variables for farming experience, farm size and fertilizer were significant at 1% while equipment was significant at 5% level. Farming experience, farm size and labour significantly affected rice farmers in Lowland production system at 5% and equipment at 1%. Profit earned by rice farmers using Swamp production system in Ebonyi State were affected by farming experience at 5%, and farm size, labour and fertilizer at 1% level of significance. Rice farmers were constrained by production credit, climate change etc. Rice processors were constrained by seasonality of paddy rice supply and unavailability of affordable modern processing equipment. High transportation cost was identified as a constraint by rice traders. The ANOVA result indicated a significant mean difference in the level of profit of farmers using swamp, lowland and upland rice production systems. It was recommended that Government should provide adequate infrastructure to strengthen the rice value chain in Ebonyi State, Nigeria.

Key words: Value chain, Rice, Production system, Value chain Actors, Ebonyi State, Nigeria.