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Markatied Agrcuturl Technology Tansfer and Commerctalzaton Project Rural Sector Enhancement Program Needs Assessment Study for Market-driven Agricultural Technology Transfer and Commerc

Markatied Agrcuturl Technology Tansfer and Commerctalzaton Project Rural Sector Enhancement Program

Needs Assessment Study for Market-driven Agricultural Technology Transfer and

Commercialization in Adamawa State, Nigeria P.M Kormawa, 0.0 Oyebanji,

B.O Ogunbameru, and C.C Mololewu

To Headquarters from outside Nigeria:

do Lambourn (UK) Lid,, Carolyn House, 26 Dingwall Road

Croydon CR9 3EE, UK

Printed in Nigeria by IITA

ISBN 978 131 204 1

Needs Assessment Study for Market-driven

Agricultural Technology Transfer and

Commercialization in Adamawa State, Nigeria

P.M Kormawa, L Ega, J.O Olukosi,

and | Adamu PMB 5320, Ibadan, Nigeria

November 2002

Funded by the United States Agency for International Development ‘Abuja, Nigeria

thie one

Acknowledgments

‘The authors are grateful to USAID for providing the funds for the execution of this study

We are especially grateful to Dr Patrick Kormawa, Coordinator of RUSEP and all the RUSEP staff at ITTA Tbadan, Drs Jonas Chianu, K Makinde, and Wale Adekunle and Mrs

‘Yemi Nwoke for their logistic and technical support We also thank the Director of RCMD

De D Keatinge for his accommodation and support ‘We benefited immensely from the cooperation and assistance of Project Manager

‘Adamawa State ADP and all his staff, especially Dr Louis Mandama, Director of Exten- sion Our thanks also go to Dr Ingawa, head of Unit, PCU Sheda Abuja

‘We sincerely hope thar the contents of this document will be useful towards achieving

a market-driven agricultural technology transfer and commercialization in Adamawa State and Nigeria in general

Contents

2._Priority main crops of interest 4

3._Factors influencing che effective implementation of market-driven cultural technology transfer and commercialization

“Technology of production (research and extension support) "

5 Crop budget for maize in Adamava State 25

6 Crop budget for rice in Adamawa State 26

7 Crop budget for groundnut in Adamawa State 7

8, Trends in the prices of different crops in Adamawa State, 1999 and 2 28

6 Value added in processing a tonne of maize, rice and groundnut

‘commodity of interest, and mode of

Acronyms and abbreviations

‘Accelerated dissemination of improved agricultural technology in Nigeria Agricultural Development Project

‘Agro-Industrial Development Unit block extension agent

benefit-cost ratio break-even factor cooking banana

‘community-based organizations

‘Cocoa Research Institute of Nigeria Economic Community of West African States

‘extension agent Federal Instiute of Industrial Research, Oshodi Forestry Research Institute of Nigeria,

International Crops Research Institute forthe Semi-aid Tropics Intemational Fund for Agricultural Development

International Institute of Tropical Agriculture Intemational Livestock Research Institute local government area

Market-driven Agricultural Technology Transfer and Commercalization

‘market information system [National Food and Drugs Administration and Control [Nigerian Agricultural and Rural Development Bank National Center for Agricultural Mechanization [National Cereals Reseach Institute

‘nongovernmental organization [National Root Crops Research Institute National Seed Service

‘Organization of Afican Unity Project Coordinating Unie Project Monitoring and Evaluation Projects Development Agency Postharvest Technology Department research-extension—farmet-inpur-linkage system Rural Institutions Department

Root and Tuber Expansion Program Rubber Research Instiute of Nigeria Semiarid Food Grain Research and Development Project

‘otal revenue minus tral cost total revenue minus total variable cost United States Agency for International Development West Africa Rice Development Association

‘Women in Agriculture

Executive summary

‘The Needs Assessment Study for RUSEP in Adamawa State, Nigeria, is focused on the problem of identifying candidate crops and technologies to be promoted to cause visible positive changes in the income and quality of life of the rural populace within a short petiod The team visited areas with high agricultural production potential, che Ministry of

‘Agriculture, Adamawa Agricultural Development Project (ADP), Federal Office of Sta- tistics, and leading input distributors, and collected information on land use, agricultural production, processing, and marketing, The team aso interacted with farmers, processors,

‘marketing agents, and input dealers and conducted a rapid rural appraisal study in selected locations

“Thee candidate erops were shortlisted maize, rice and groundnut ‘The selected loca- tions forthe intervention were Mallam Hore village in Ganye LGA for maize, Gurin village

in Fufore LGA for rice, and Hong village in Hong LGA for groundnut The technologies identified for promotion include manual shelling for maize, processing paddy rice into grain before sale, and decortication and extraction of oil from groundnus seed The study indicated that processing one tonne of maize before sale is associated with an added value

of 810380 Processing of one tonne of paddy rice to grain before sale yields an added value of 4103313, and the extraction ofl from one tonne of groundnut is associated with

an added value of M1538 ‘The major constraints militating against market-driven production and processing,

of maize, rice, and groundnut are lack of credit to meet production requirements, lack of access to improved varieties, fertilizers, and agrochemicals, and nonavalabilty

of cottage level processing equipment at affordable prices Farmers’ associations, community-based organizations (CBOs), and women's groups have not achieved much

in the development and transfer of market-driven technologies to farmers They need to mobilize farmers into groups, and link the groups to those agencies chat provide formal credit for agricultural purposes and those that distribute improved seeds, fertilizers, and agrochemicals and also to agencies that provide cortage level processing technologies The private sector involvement in the input supply and output market is not well coordinated or organized and lacks desired efficiency Farmers should be organized into groups as retailers and be linked directly co inpuc dealers

‘There isno deliberate government policy to promote market information system (MIS)

‘The prevailing prices are discovered through bargaining and haggling Enumerators from the ADP should collect both ourput and input prices during surveys ofthe major markets and disseminate the information through radio and television broadeass in local languages and English every fortnight throughout the tate and aso via the PCU~ADP intranet The PCU-ADP intranet will be of immense advantage as MIS data from other states could be

‘browsed Bulletins, pamphlets, and other publications in local languages and English should bemadcevery three months dealing availabe research results, extension messages, structure

of input and output markets, and location of processors and industries using maize, rice, and groundnut In dealing with the farmers, the AADP should also provide them with the

current information on esearch, extension, trends and forecasts of input and ouput prices, location and charges ofthe processors and industries using maize ice, and groundnut

‘The AADP should train a) certified see producers on production technology and the application of diagnostic skills in the needs asessments of farmers, (b) processors on the postharvest processing techniques forthe ke crops and the simple maintenance of machines, and (6) traders on storage, packaging, and handling techniques Furthermore, the AADP should facilitate che training by representatives ofthe agrochemical companies of suppliers and marketers on the handling and application of fertilizers and agrochemicals and also locate experts on the technology of pesticide application to train contrat sprayers Finally the AADP should tain the supporting taffof RUSEP on the concepr of agricultural projec, technology transfer, and commercalization, aswell as the specific technology requirements

‘of maize, rice, and groundnut The Project Monitoring and Evaluation subprogram of the [AADP should be crained on methodologies and application of effective MIS

4

Introduction

‘Adamawa state has a land area of 39 742.12 sq km, which is abour 4.49% ofthe land area

in Nigeria The stae lies between latitudes 8 and 11 degrees North and longitudes 11.5 and 13.75 degrees East In the 1991 population census, the state had a population of

2 146 066 This was projected to be 2.510 418 by 1997, giving a density of 63 people per sq km (Federal Office of Statistics 1997) About 80% of the population reside in rural areas and are engaged in agricultural production activities

“The sate has about 4.2 million ha ofland out of which 2.9 million are arable but only 0.232 million ha (ie 8%) are under cultivation annually The mean farm size per Farming household in 2001 is 0.73 has however, chere are afew medium and large-scale farmers with farm holdings exceeding 5 ha The annual rainfall recorded in 1999 was 1055 mm and

1064 mm in 2000, covering the period April to October and reaching the peak in August with an average of 256 mm The vegetation ranges from northern Guinea savanna in the extreme southern part to sub-Sudan savanna inthe extreme north This diverse agroecology and the differing sol types are quite favorable for the production ofa wide range of erops, also for livestock, fisheries, and assorted fruit and tee crops ‘Crop production predominates and the major annual crops grown are maize, rice, sorghum, groundnut, yam, and cowpea, while livestock production includes cat, sheep, goats pigs and poultry Assorted fruit and tee crops suchas cirus, mango, guava, Pawpaw, coffe, cashew, cocoa, and oil palm are also cultivated in some locations There are more crop production activities during the rainy season (May-October), With the presence of large bodies of water dry season cultivation of crops such as vegetables, maize, and ri

is gaining widespread acceptance As a result of the absence of small and medium-scale agroinduserial processor, mos of che agricultural produce, particulary grain and ol seeds, are purchased by buying agents stationed in the rural areas as raw materials for agrobased industries located in other parts ofthe country ‘The importance of agriculture in employment generation and povery alleviation cannot

be overemphasized However, the potential of agriculture contributing to the economic growth of che sate is far from being fully realized New technologies for transforming smallholder agrculeure are available through the escarch activities ofthe 17 national agr- culrural research insciutes and four international research institutes International Institute

‘of Tropical Agriculture (IITA), West Aica Rice Development Assocation (WARDA), Incer- national Crops Research Insticute for the Semi-Arid Tropics (ICRISAT), and International Livestock Research Institute (ILRI) have, over the yeas, developed improved technologies and germplasm adapted to production conditions in Nigeria Despite the past effors in

farmers! education by the Adamawa State Agricultural Development Project (AADP), various factors have constrained the adoption ofthese technologies These include poor access to production inputs, lack of acces to credit, insufficient machinery for cultivation, harvesting, and processing, and inadequate marketing arrangements for produce Thus, the study of market-driven technology transfer and commercalization of agriculture in

‘Adamawa State is justifiable

Background of the study

‘The purpose of the Rural Sector Enhancement Program (RUSEP) is to test, atthe state- level, strategies to improve and develop market-driven agricultural production and to gen-

‘erate employment through the enhancement of creation of rural-agriculeural enterprises designated areas in Nigeria The strategy being proposed for the project isto focus on proved production and productivity of targeted commodities with well-established market opportunities and potential for employment generation through the development

‘of more market-oriented agriculture

‘As part of projec activities needs assessment study was to be conducted in select sites with a high potential for agricultural improvement with particular relevance

1 target technologies/commodices The findings of this study would be reviewed at an analytical workshop for participatory stakeholders to define a priority lst of potential

‘options for enhanced commercial production and productivity from technology transfer

‘The falling terms of reference uid the sud ‘Mdentfy the most likely areas and crops where agriculeural technology

transfer might achieve the purpose of market-driven technology transfer and + Identify the types of technology and the level of adoption in terms of

downstream activities (storage, processing, et.) as they affect the major crops of + For the identified crops and technologies, assess the profitability at farm and smarket levels + Identify the constraints militating against market-driven agriculture

(ego technology, infrastructure, inpuc supply situation, and output markets) + Examine the roles of existing functional farmer associations, CBOs including

‘women's groups, and donor agencies and proposed

development and transfer of market-driven technologies

+ Examine the levels of private sector involvement in input supply and ourput market and propose ways to encourage greater par in input and ourpue market development,

ir future roles in the

4+ Assess the present situation of market information system (MIS) and suggest ‘ways 10 develop a comprehensive MIS that can link producers, processors, and end-users of agricultural products including NGOs and other organizations within and outside Adamawa Stace

+ Ideneify taining needs for produces, procesos, eraders, entrepreneurs, ein suppor of marker-driven technology transfer and commerialzaion ìn agietuze

Methodology

Primary daca from Adamawa Seate were collected for the study via rapid rural appraisal survey usinga structured questionnaire The survey tam visited the Ministry of Agriculture, AADP, Federal Office of Statistics, and leading input dissibutors and collected information

‘onland use, agricultural production, processing, and marketing The survey team also visited areas with high agricularal production potential, and primary and terminal markets, and imweracted with farmers, procesors, marketing agents, and input dealers Inferences were devived irom the collected daa based on the vers of reference and the esl ae presented

in the following sections

2

Priority major crops of interest

Level of production and demand

‘We shortlisted five major crops from the lst of che crops produced in the state for further consideraion based on the time series data available on the cultivated areas, output, and -market prices Time series data on che area cultivated to the crops by the rural farmers (Table 1) indicated the following ranking forthe average annual area (000 ha) commit- ted to the crops from 1998 to 2000: sorghum 148, maize 116, rice 70, cowpea 53, and roundout 44

‘The ranking ofthe average annual ourputs (0000) of the selected major crops from 1998 +0 2000 was as follows: sogghum 188; rice 148, maize 139, groundnut 65, and cowpea 5 Considering the marketing potentials, ic is evident chat the rural farmers seldom market sorghum and cowpea The cropsare mainly grown for houschold food security On eliminat- ing sorghum and cowpea, the three leading crops are maize ice, and groundnut However,

‘maize and tice compete For the frst postion The decals are presented in Table 1

Secondly, crop budgetsIha were cast forthe five shortlisted crops fr thee years (1999— 2001), and the annual average gross margins/ha were estimated The annual average gross

‘margins for maize, rie, and groundnut turned out to be higher than for the rest Conse-

‘quently, maze, rice, and groundnut were selected fo further detailed analysis The average annual gross margins for maize, rice and groundnut are presented in Table 2 and the crop

‘Table 4 Area and output of major crops in Adamawa State (1998-2000),

(Cultivated area (000 ha)

Table 2 Profitability/ha of maize, rice, and groundnut enterprises in Adamawa Stats

‘Average cot per man-day Tor abor exe 3450 szisy 14,820, 55 14.406 67 554.09

Rice

‘Average cot pet man-day “oul labor cose 25450 432 27.100 856386379755 3340 372666

budget analysesare found in Annexes 5, 6,and 7 The average gross margin and benefit-cost ratio for maize are N31 347 and 2.6; rice N300053 and 1.8; and groundnut.M26867 and 2.1, Based on these facts, it is concluded that che ranking of the crops based on market

<demand-driven potential is such that maize is leading, followed by rice and groundnut

Production location

“To select the production location for te selected crops, a sample was selected of 25 mem- bers comprising Ministry officals, AADP management staf private input vendors, traders, and farmers and asked to rank the LGAs and villages in order of priority with respect to the production ofthe selected crops More than 80% of the rankings were consistently in agreement Based on the rankings, it was concluded tha the major producing area for maize

is Ganye LGA: for rice, Fufore and Ganye LGAs: and for groundnut, Hong LGA The derails are presented in Table 3 These villages are accordingly recommended for RUSEP

Technology of production, storage, and processing

‘The national agricultural research system (NARS) over the years has developed improved and proven technologies for the production of mae, rie, and groundnut and high yield- ing varieties ofthese crops are available Effort have been made inthe past by the AADP

‘Table 3 Major producing locations for the selected crops

In Adamawa State, rural farmers do not store thei ice, maize, and groundnut for long This i because of che pressing need for cash to meet their immediate financial obligations Moreover, most of them obtained credie from middlemen to buy thir required production Inputs: they must repay this immediately after harvest ether in cash or in kind The middle

‘men are ustally buying agents of user-companies located outside the state These middlemen are always lurking around during the harvesting period in search ofthese commodities to buy and sor for some time in jute bags using storage chemicals The stored commodities are handed over to their respective parent companies as soon as adequate transportation arrangements are completed This marketing arrangement does not guarantee adequate remuneration to farmers’ production effort since the prices at which they sell are always below the ongoing market prices

Shelling on-farm is the only form of processing of maize caried on in the sate The AADP has, however, made efforts to improve the efficiency of maize shelling through the introduction of manual shellers to individual farmers and farmers’ groups The adoption

‘ate of this technology is high but the widespread use has been hindered because the AADP

«ould not meet the demand Tin che past, most ofthe rice paddy produced was sold ro middlemen from the southern parcof Nigeria, particularly Abakaliki, who process tis to grain However, the farmers have now the importance of value added associated with the processing of paddy, This has resulted in the emergence of rice-processing entrepreneurs at the village level Proce

ng consists of cther parboiling before milling or direct milling, Observation made during the visit to che rural marker revealed fuirly good quality processed rice The quality could

be improved through training the processors and introducing destoners

‘Groundnut decortication and ol extraction from groundnut seed are common projects among women in Adamawa State Because of improved eiciency from using the groundnut cil exractors introduced by the AADP the women have been able to generate more income where the equipment is availabe, thereby leading to an improved standard of living for

the whole family ln the past, some flour and feed mills locate in the state to take advantage of the production capacity of maize closed down forthe following major easons The Inter-State Flour Mill was technically designed for wheat and not maize; consequently, it could not rill maize wo the quality desired by local onsurners, hence about 90% ofthe output fom the mill was transported to ther states forsale Also the transportation cost of wheat and maize inputs and outputs forced the owners to relocate the mill to Lagos This isthe land- ing port for imported wheat and has more absorptive capacity (a bigher population) than Adamawa Snte, Although the Upper Benue River Basin Development Authority (UBRBDA) i located

in the save and introduced rice milling it could not obtain enough paddy to sueaio the mill Ths is because UBRBDA did not engage either in direct production of rice 0 in promoting ice production among farmers through a contract grower’ scheme

Up £0 40% of rural farmers in Adamavwa State source their seeds, especially for maize and rice, ftom the AADP and other seed companies while the test source either from theie old stock or purchase grain as seeds from the village markets, Private entrepreneurs were interviewed and indicated that the business of seed tctling is very profitable Sebore Farms, the latest entrant in seed production, has increased its land area put under maize

‘Table 4 Agencies, types of seeds, and quantity producedimarketed in Adamawa State

‘Agencieslcompanies ‘Seed markered ‘Quantity (0 markered

seed cultivation, However, the involvement of local farmers in seed production and market- ing as an enterprise has not yet developed During the planting season, certified seeds of maize and rice can be found being retailed

by private individuals all the LGA headquarters Most ofthe farmers are aware ofthe supe- Fior performance ofthe improved crop seeds, however, the major limitation to wide-scale adoption was attributed to high cost For example, 2 kg certified sced of open-potlinated (OP) maize cost abourN240.00 Also, the quantity of certified seeds could not meet an increased demand There is therefore the need to promote the development of small-scale seed encerprises among farmers’ groups and individuals This approach will make more improved seeds available in the marker at competitive prices The AADP should play a facilitating role by organizing taining for seed producers and also provide certification, including quality contol services, in collaboration with the National Seed Service

Fertilizer procurement and distribution

‘Adamawa Stae established a chemical fertilizer blending plant in 1998 This funetioned for only afew months and was closed down due to technical problems Ie was ater discovered thar the machinery used in establishing the plane was obsolete The plant could produce only 300 cof NPK in 1999 Prior tothe withdrawal of subsidies from chemical feslizers by the Federal Government in 1998, the state used to procure its fertilizers from NAFCON,

n Onne, Rivers State; Federal Superphosphate Fertilizer Company, Kaduna; Fertilizer and Chemical Led, Kaduna; and Fertilizer Blending plant, Minna, Niger State

‘The federal and state governments provided the bulk ofthe fertilizers sold in the sac

n 1999, 2000, and 2001 The fertilizers were procured by the governments and distributed {retail stores located in the 21 LGA headquarters Sales were made through a commintee cstablished by the Ministry of Agriculture (MOA) in each LGA, Members of the commit- tce were drawn from farmers, the AADP, MOA, LGA, political parties, and some security agencies The Commissioner of Agriculture heads the committee

‘There are also middlemen engaged in che fertilizer busines They procure chemical ferilizers from various sources and sell atthe major markets in the state I is, however, evident that: () delivery of the fertilizers is not vimely, and (i) the eyes of fertilizers in demand are not available For instance, atthe beginning of the 2001 season, only urea and [NDK were delivered by the federal government The quantity of fertilizer distributed to farmersis grosly inadequate The estimated total annual requirement of chemical ferlzers

by farmers in the state fs 70410 t This is made up of NPK, 45000 «; urea, 12000 «; and SSR, 13410 «In 2001, only 10310 cor 15% ofthe required quantity were distributed in the tae The detals ae in Table 5

From the situation analysis above, it is apparent that farmers’ needs ate not met in terms of annual fertilizer requirements and this has deleterious effets on productivity at the farm level For any intervention to increase the productivity of farmers in maize, rice, and groundnut, government must ensure an adequate quantity and timely aailabifty of fertilizers to farmers

For the success of RUSER ic is suggested that (a) farmers should be organized into viable commodity-based groups for input sourcing, marketing, and processing; (b) the state government should provide an enabling environment for private sector involvement

in fertilizer procurement and distribution; and (c) the stare government should replace the obsolete blending plane and rehabilitate che abandoned selling points

Agrochemicals

‘Agrochemicals, such as herbicides, pesticides, and seed dressing chemicals, are readily avail- able in retail storesat the state capital and LGA headquarters Some ofthe rerailers also take the agrochemicals to the local matketson market days The demand for these agrochemicals islow due to exorbitant prices charged by the dealers However, the majority ofthe farmers interviewed said chey were prepared to take advantage of the pest control services provided

by ức private dealers

Tractors and animat-drawn implements

The business of leasing and hiring wactors and animal-drawn implements for agricultural purposes is not adequately developed The few actors and implements owned by the government have broken down and need rehabilitation Private owners of tractors and implements prefer to ake them acros the borders to Cameroon where they hiee them out

at more profitable prices that farmers in Adamawa State cannot afford to pay The farmers interviewed indicated thie interest in animal traction The alluvial plains are quite stable for animal traction Icishoped that this wll be a more efficient and affordable alternative ro tractors The ADP emphasized the need to step up the taining of farmer atthe Animal

‘Traction Training Center, Ngurore Farmer groups should be linked to formal nancial institutions co obtain loans to purchase work bulls and implements Table 8 Distribution of fertilizers in Adamawa State by government, 1999-2001

Industrial and domestic utilization of maize, rice,

and groundnut

Caunendly thec re no agrobased industries that utilize maize ice, and groundnut as aw raters in Adamawa State, Because production lvl of these crops could not sustain

‘medium and large-scale agrobased industries, a indicated earlier, the transportation cost,

of imported raw materials and finshed products forced the previously existing agrobased industries wo relocate to other parts ofthe country Domestic utilization of maze, rice and groundnut is limited Consumption alone could not exhaust the quantities produced in the sate,

by the ADP to women's groups The adoption level of this technology is stil very low because of the inadequate number of groundnut oil extractors available

In onder to assess the profitability of processing + and groundnut, daca were collected from some local procestors to estimate the value added in processing these crops

‘The results of the analysis are summarized in Table 6 The denis of the value-added analysis are presented in Annexes 2,3, and 4 Is evident from the analysis that favorable prospects exist for market-driven technology transfer and commercialization in respect of

‘maize, rice, and groundnut

‘Marketing opportunities for maize, rice, and groundnutabound The demand for these

‘commodities for domestic and industrial use within and outside the state is large but the market is not adequately organized,

In processing a tonne of maize, rico, and groundnut

Value of Value of Value % of value added unprocessed 1 processed 1 added to unprocessed Crop tonne (M) tonne (§) @Ð value @) Maize 13,000 29,000 10.380 80

Rice 18,500 37666 10313, 55

Groundnut 14,720 20,019 15,388 104

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