Effects Of Climate On Revenue From Oil Palm Production In Southern Nigeria

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.