ECONOMIC IMPACT ANALYSIS OF VALUE CHAIN DEVELOPMENT PROGRAMME VCDP ON FOOD SECURITY AND PRODUCTIVITY OF RICE FARMERS IN NIGER STATE
CHAPTER ONE
INTRODUCTION
1.1. BACKGROUND OF THE STUDY
The International Fund for Agricultural Development (IFAD) was established to finance agricultural development projects primarily for food
production in the developing countries with focus on alleviating poverty of the rural dwellers through investment in agricultural activities,
as agriculture is seen in the developing countries as a sector with viable potential to move the rural poor out of poverty and with the
capacity to feed the world. It is a specialized agency of the United Nations (UNs) which was established as an international financial
institution in 1977 as one of the major outcomes of the 1974 World Food Conference. In sub-Saharan Africa for instance, maximizing the
potential of agriculture would yield faster growth in reducing poverty than investment in other sectors, knowing the world population and
the increasing demand, as population rises. The sub-Saharan Africa has enormous natural, physical and human potential, compared to the
developed countries where the cost of producing food is becoming high and land is scarce. With the magnitude of untapped resources in
sub-Saharan Africa, the focus of the international community (Agricultural finance donors) has shied from food aid to developing the
capacity of the numerous smallholder farmers to increase their productivity (R.N Mgbenka & E.N Mbah, 2016). Africa has large expanse of
land and with enough resources, agriculture would set a new pace for Africa’s growth and development. The IFAD intervention maximizes
the potential of smallholder farmers by exposing them to opportunities through inputs support, market access and services that would
increase their farming yield build their human capacity and consequently increase their income. Through low-interest loans and grants,
IFAD works with governments to develop and finance programmes and projects that enable rural poor people to overcome poverty. Since
starting operations in 1978, IFAD has invested US$14.8 billion in over 900 projects and programmes that have reached some 400 million
poor rural people. The governments, project participants and other financing sources in donor countries have contributed US$12.2 billion,
and multilateral, bilateral and other donors provided approximately another US$9.6 billion in co-financing. This represents a total
investment of about US$21.8billion. The IFAD intervention in Nigeria is focused on Value Chain Development Programme (VCDP) because of
the challenges faced by smallholder farmers such as low productivity, poor access to market, poor processing technology, lack of adequate
information, high costs of farm inputs, inadequate credit system, the vicious cycle of poverty and the recent challenge which has seemed
formidable; climate change. The partnership between the International Fund for Agricultural Development and the Federal Government of
Nigeria is focused on cassava and rice smallholder farmers, knowing the potential economic value of the staple crops if every challenge is
removed from planting through harvesting to consumption. Also, to achieve Nigeria’s Agricultural Transformation Agenda which aims to
increase production, reduce food imports and provide millions of new jobs for young people; the potential of agriculture needs to be
adequately harnessed since the sector is seen as an alternative to the oil dependent economy that has not been able to deliver the country
from economic, social and other challenges be-devilling the nation. Over 80% of the total farming population in Nigeria are smallholder
farmers cultivating less than 5 hectares in the rural areas producing about 95% of the total national output, yet poverty still remains a rural
phenomenon with two-thirds of the total population considered poor. The Value Chain Development Program is a development initiative
that was contrived for Nigeria, it is an approach to tackle the challenges faced by smallholder farmers. The six-year programme is aimed at
improving cassava and rice value chains in six states in Nigeria by proering solutions to low productivity, limited access to productive
assets and inputs, paucity of opportunities for value addition, inadequate support services such as extension services and research,
inability to access rural financial services, inadequate market and rural infrastructure. The IFAD/FGN adopted the value chain approach to
enhance productivity, promote agro-processing, access to markets and opportunities to facilitate improved engagement of the private
sector and farmers’ organisations. The programme, through commodity-specific Value Chain Action Plans (VCAP) at different local
governments in the participating states engages with actors along the chain – producers, processors, marketers and their farmer
organisations as well as public and private institutions, service providers, policy and regulatory environment to deliver relevant and
sustainable activities that would lead to gradual transformation of the sector and contribute to achieving food security, expand incomegenerating activities and employment opportunities. The field research indicates that, IFAD-VCDP has contributed to the increased standard
of living of smallholder farmers in the area as they all could attest to provision of farm inputs, improved market access and linkage to
extension services, participation in trainings, increase in income e.t.c. For effective coordination and monitoring of the intervention, the
implementing state (Niger state) ensured every farmer belonged to a farmer organization and existing ones were recognized and adjusted to
suit the modus operandi of the intervention.
1.2 STATEMENT OF PROBLEM
The value chain describes the full range of activities that firms and workers do to bring a product from its conception to its end use and
beyond (WBCSD, 2011).The three main pillars of the Value Chain Addition (VCA), namely production, processing and marketing of the
produce, are the main aspects that relate directly to the food security framework. The reason for the existence of a value chain is that goods,
services or information are passed on to the different actors. Low productivity undermines potential food production and stifles income
quality and keeps many farming families impoverished, hungry and undernourished. Inability to access capital to buy modern agriculture
inputs reduces productivity yield of smallholder farmers knowing how much we rely on farm produce for our daily consumption and the
process or efforts put into production, marketing and distribution; farmers‟ livelihood hasn’t been improved evenly and therefore, some
still leave below the poverty line. Through value addition interventions, it seems promising for their livelihood to be improved.
1.3. AIMS AND OBJECTIVES OF THE STUDY
The major aim of the study is to examine economic impact analysis of value chain development program on food security and productivity
of rice farmers in Niger state, Nigeria. Other specific objectives of the study include;
- To examine the benefits of value chain development program on farmer’s productivity and security.
- To examine the productivity level of the rice farmers through value chain development program.
To examine the economic impact of value chain development program on food security and productivity of rice farmers in Niger state. - To identify the constraints and opportunities in rice value chain and to recommend measures for improvement.
- To examine the relationship between value chain development program, food security and productivity of rice farmers in Niger state.
- To examine the importance of value chain development program to rice farmers in Niger state.
- 1.4. RESEARCH QUESTIONS
- What are the benefits of value chain development program on farmer’s productivity and security?
- What is the productivity level of the rice farmers through value chain development program?
- What is the economic impact value chain development program on food security and productivity of rice farmers in Niger state?
- What are the constraints and opportunities in rice value chain and measures for improvement?
- What is the relationship between value chain development program, food security and productivity of rice farmers in Niger state?
- What is the importance of value chain development program to rice farmers in Niger state?
1.5 RESEARCH HYPOTHESES
Hypothesis 1
H0: There is no significant economic impact of value chain development program on food security and productivity of rice farmers in Niger
state.
H1: There is a significant economic impact of value chain development program on food security and productivity of rice farmers in Niger
state.
Hypothesis 2
H0: There is no significant relationship between value chain development program, food security and productivity of rice farmers in Niger
state.
H1: There is a significant relationship between value chain development program, food security and productivity of rice farmers in Niger
state - 1.6 SIGNIFICANCE OF THE STUDY
- The study would be of benefit towards providing relevant information to value chain actors that would enhance the competitiveness of the
rice value chain. This research tends to bring to the fore the optimum rice enterprise combinations in the study area, as well as the
distribution of the gains within the value chain. This would be of immense benefit to the value chain actors, especially the farmers who are
resource constrained and lack adequate information on the right production system to adopt in other to optimize profit. The study would
also be of immense benefit to students, researchers and scholars who are interested in developing further studies on the subject matter. - 1.7. SCOPE AND LIMITATION OF THE STUDY
- The study is restricted to economic impact analysis of value chain development program on food security and productivity of rice farmers in
Niger state, Nigeria. - LIMITATION OF THE STUDY
- Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or
information and in the process of data collection (internet, questionnaire and interview)
Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on
the time devoted for the research work.
DEFINITION OF TERMS
Smallholder Farmers: Smallholder farmers are often referred to small scale farmers with less access to resources to farm. Small scale
farmers are defined as those farmers owning small-based plots of land on which they grow subsistence crops and one or two cash crops
relying almost exclusively on family labour. (DAFF, 2012)
Value Chain: Value chain development describes the full range of activities which are required to bring a product or service from
conception, through the different phases of production (involving a combination of physical transformation and the input of various
producer services), delivery to final consumers, and final disposal after use. These include activities such as design, production, marketing,
distribution, and support services up to the final consumer (and often beyond, when recycling processes are taken into account)
ECONOMIC IMPACT ANALYSIS OF VALUE CHAIN DEVELOPMENT PROGRAMME VCDP ON FOOD SECURITY AND PRODUCTIVITY OF RICE FARMERS IN NIGER STATE