ECONOMIC ANALYSIS OF GARDEN EGG PRODUCTION IN ISALA-NGWA SOUTH LOCAL GOVERNMENT AREA OF ABIA STATE, NIGERIA.

ECONOMIC ANALYSIS OF GARDEN EGG PRODUCTION IN ISALA-NGWA SOUTH LOCAL GOVERNMENT AREA OF ABIA STATE, NIGERIA. CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF STUDY Nigeria is blessed with dynamic sectors which contributes immensely to her growth and development. One of these sectors is the agricultural sector which is broadly divided into four sectors in Nigeria; crop production, fishing, livestock and forestry. Crop production remains the largest segment and it accounts for about 87.6% of the sector’s total output. Agriculture is the bedrock of economic growth, development and poverty eradication in the developing countries. Agriculture has also regarded as the engine and panacea to economic prosperity (Kamil et al., 2017). According to Tonuchi and Onyebuchi (2019), agriculture remains the largest sector in Nigeria contributing an average of 24% to the nation's GDP over the past seven years (2013 – 2019). In addition, the sector employs more than 36% of the country's labour force, a feat which ranks the sector as the largest employer of labour in the country. The crop production sector involves production of arable and permanent crop such as oil palm, pepper, garden egg, maize, tomato, cassava, cocoa, okra, melon etcc. Garden egg (Solanum melongena) is an important fruity/leafy vegetable which is very rich in vitamins and other nutrients essential for healthy living (Abayomi et al. 2017). According to Naeem and Ugur (2019) garden egg which is most often eaten raw is a good source of dietary fibre, potassium, manganese, copper, vitamin B, magnesium. The fruits may be pear-shaped, round, long or cylindrical depending on the variety. The plant with the scientific name Solanum spp. is a vegetable with the increasing popularity in the world. It is an economic flowering plant belonging to the family Solanaceae and genus Solanum. It exists in about 1,400 species found around the world most especially in the temperate and tropical regions (Adeleye, 2015). The genus Solanum comprises over 1,000 species with at least 100 indigenous African species (Chidambaram et al., 2022). Production of garden egg is highly concentrated with 85% of the output coming from five (5) countries of which China is the world largest producer (56% of garden egg output), followed by India (26%), Egypt, Turkey and Indonesia (FAO, 2020). The eggplant is a warm season crop which prefers relatively high temperatures for optimum growth and development. It requires optimum day temperature of 25- 350C and optimum night temperature of 20-27oC (Caruso et al., 2017). High soil temperatures are injurious to the root system and can be reduced by mulching. The garden egg requires well-drained soil with good moisture retaining properties. The root system is sensitive to excess water, and deep cultivation prior to planting is required Soil rich in organic matter and pH ranging from 5.5- 6.5 is suitable for its production (Maghirang iet al., 2016). According to Ikeh and Akpan (2018), garden egg is an economically important crop and one of the leading fruit and leafy vegetables in the farming systems of southern Nigeria. Nutritionally, garden egg contains 92.7% moisture, 1.4% protein, 1.3% fibre, 0.3% fat, 0.3% minerals, carbohydrates (6%), vitamins B, niacin and magnesium (Oreoritse, 2022). Onu et al. (2022) also argue that some medicinal properties are attributed to the roots, fruits and leaves as they are used to treat colic and blood pressure etcetera. In Southeastern Nigeria, the leaves and fruits are used in the preparation of different local or indigenous delicacies such as the local Igbo salad made of oil bean slices (Ugba in Igbo) and tapioca or abacha (processed cassava slices). The fruits can also be eaten raw accompanied by groundnut paste. Garden egg is probably the third most consumed fruity vegetable in Nigeria and Ghana, after pepper and tomatoes (Mangan et al. 2017). Virtually every Nigerian and most especially Abia State indigenes consume both the fruits and leaves, making it as popular as tomatoes and peppers in Nigerian diets. Hence garden egg, especially the fruit, is well cherished and sought for in the Southern Nigeria. 1.2 STATEMENT OF PROBLEM Garden-egg production can be a profitable venture but it also involves risks, which farmers regards as problem militating against its massive production. Most farmers do not regard garden- egg production as profitable due to the risk involved therefore cannot readily sacrifice their scarce resources in its production on a large scale. There are other production problems faced by garden egg farmers which discourages them from consistently investing in this enterprise, these constraints include lack of storage facilities, inadequate finance, high cost of chemical fertilizers; and high level of post-harvest losses, poor soil fertility, pests and diseases attacks (Onu et al., 2016). Many researchers including (Onu et al., 2016; Abayomi et al., 2017; Mangan et al., 2017; Poor livelihood Low yield Low income Oreoritse, 2022; Ibe et al., 2022) have explored various topics on garden egg production in different geographical locations. However, there is a dearth of information on the economics of garden egg production in Isala-Ngwa South LGA, Abia State of Nigeria, which equally prompted the need for this research. It is against this backdrop that this study seeks to address the following research questions; 1. What are the socio-economic characteristics of garden egg farmers in the study area? 2. What are the cost and return as well as the profitability of garden egg production in the study area? 3. What are the determinants of profitability of garden egg production in the study area? 4. What is the productivity of garden egg production in the study area? 5. What are the constraints militating against garden egg production in the study area? 1.3 THE OBJECTIVE OF THE STUDY The broad objective of this study is to analyze the economics of garden egg production in Isala- Ngwa North LGA, Abia State, Nigeria. The specific objectives are to; 1. describe the socio-economic characteristics of garden egg farmers in the study area; 2. estimate the cost and return and profitability of garden egg production in the study area; 3. examine the determinants of profitability of garden egg production in the study area; 4. determine the productivity of garden egg production in the study area; 5. identify constraints militating against garden egg production in the study area. 1.4 HYPOTHESIS OF THE STUDY Ho: Socio-economic characteristics of garden egg producers in Isala-Ngwa South LGA, Abia State do not significantly affect the quantity produced. 1.5 JUSTIFICATION OF THE STUDY The result of the study would be of great benefits to garden egg farmers, researchers, policy makers, governmental and non-governmental organizations. Garden egg farmers would benefit from the study considering the efforts the research sets out to make by identifying their production problems and factors affecting their profitability. The study seeks to unveil the major problems in garden egg production which would enhance improved production, having identified that significant constraints garden egg farmers encounter in the course of their production. The result would also serve as a diagnostic tool for garden egg farmers in terms of making prompt production decisions as regards various issues concerning productivity and profitability. The outcome of the study can also be used as a reference for potential producers and investors to make investment decisions on garden egg production. The study will contribute to existing literature on profitability of garden egg production by providing adequate information on profitability of garden egg production in Isala-Ngwa South LGA, Abia State, Nigeria. The study would also aide in formulating appropriate agricultural policies that would support garden egg farmers by addressing the various problems these farmers face during production. CHAPTER TWO LITERATURE REVIEW 2.1 CONCEPTUAL FRAMEWORK 2.1.1 Garden Egg According to Queen et al. (2021), garden egg is a common traditional vegetable in tropical Africa, grown mainly for its leaves and fruits. The fruits and leaves are mostly eaten or used in its fresh state. It could also be steamed, juiced, pickled, boiled or used in preparing stews with other vegetables or meats, while its leaves are mostly used in soups and also in combination with other vegetables or juiced. The leaves of this garden egg are characterized by its small roundish nature, green in color and have a bitter-sweet taste. The leaves of some species of garden egg are eaten as a leaf vegetable and are actually more nutritious than the fruit and just like other vegetables contains essential nutrients such as vitamins and minerals in a good quantity which play an important role in human health improvement (Ogidi et al., 2021). The highly variable fruit of the plant is eaten both raw and cooked and is becoming more popular as a cultivated crop. These fruits are usually harvested while still green, before the skin becomes thick. The bitterness depends on the levels of saponin it contains, some with a sweet flavor and others very bitter. When the berries mature, they turn bright red because of high carotene content. In Nigeria, Igbo people use it as a substitute for kolanut, especially for those who do not want to chew kolanut, in which case it is used to welcome guests at home or before resumption of a traditional ceremony. Garden egg, as it is commonly known in Nigeria, is sometimes used to make a tomato-based sauce which can be used to eat yam. 2.1.2 Types of Garden Egg African eggplant is also known as garden eggs and mock tomato. The crop thrives in the warm, dry environments found in the savannah belt of West and East Africa. Optimal temperature ranges for the crop are 23–35 °C (day) and 18–25 °C (night) and it grow on a wide range of well- drained soils with an optimal soil pH range between 5.5 and 6.8. Major types of African eggplants include Solanum aethiopicum, Solanum anguivi, Solanum macrocarpon. 2.1.2.1 Solanum aethiopicum This phenotypically diverse species is grown for its fruit and leaves. Stems and leaves can be hairy or glabrous leaves, the flowers are bisexual and mostly self-pollinate; Fruits are produced singly or in groups from trusses or short cymes, depending on subspecies and varieties. The fruits vary in color (green, white, striped, multicolored), shape (round to long, smooth, grooved or ribbed) and size, (small to very big). Taste ranges from bitter to sweet, depending on saponin content, and fruit may be consumed cooked or raw. At full maturity, fruit turn red to orange due to their carotene content 2.1.2.2 Solanum anguivi S. anguivi plants have small fruits which mainly differ in shape, color and taste although most are bitter. The pea-size bitter fruits are either collected from the wild or grown and consumed fresh or dried, mainly for medicinal purposes. 2.1.2.3 Solanum macrocarpon S. macrocarpon can easily be distinguished from S. aethiopicum by its large hairless leaves and stems and its long calyx that persists after formation of its smooth green or yellow fruits. The leafy varieties are common throughout West and Central Africa, while the fruit types are mainly restricted to the humid coastal areas of West Africa. Some varieties have both edible leaves and fruits. This species is a popular traditional vegetable in West and Central Africa and also very common in Asia and tropical America. Spiny wild forms are found throughout the humid parts of tropical Africa, and occasionally collected as vegetables. It is sometimes called the Gboma eggplant, named after a village in Liberia. 2.1.3 Utilization of Garden Egg The leaves are appreciated for their slightly bitter taste and are eaten separately or in sauces. The young leaves and fruits are cooked and consumed as a vegetable (Fraikue, 2016). In Uganda, the leaves of the Shum group are either steamed or fried in oil with onions or consumed with sauces. The pea-sized bitter fruited S. anguivi cultivars are collected from the wild or cultivated and consumed in fresh or dried form. In Ghana and Cote d’Ivoire, the big fruits of the Gilo group cultivars are boiled to thicken sauces and medium to large fruit of the Kumba group are used in Senegal and Mali as condiments just like any other vegetable in rice-based dishes. Small fruited cultivars of S. macrocarpon are consumed as leafy vegetables in Benin and the large fruits are eaten in other West African countries. According to Fraikue (2016), African eggplants are also used as ornamentals (Kumba and Aculeatum groups and S. macrocarpon) and as medicinal plants (chewed leaves are used to treat sore throat, heart disease, constipation and the roots are used to treat worms). 2.1.4 Nutritional Values of Garden Egg According to Ajayi and Awe (2022), the garden egg, also known as eggplant is a very good source of dietary fiber, potassium, manganese, copper and thiamin (vitamin B1). It is a good source of vitamin B6, folate, magnesium and niacin. Eggplant also contains phytonutrients such as nasunin and chlorogenic acid. Garden egg is a nutritional powerhouse packed with powerful antioxidants with numerous health benefits. The vegetable contains vitamins C and E, polyphenols, carotenoids, flavonoids, and anthocyanins. Incorporating garden eggs in your diet can assist in combating oxidative stress, which has been linked to several chronic diseases such as heart disease and cancer. Garden eggs, also known as eggplants, are highly nutritious vegetables packed with antioxidants that can help protect the body from free radical damage (Wakili et al., 2015). Garden eggs are a powerhouse of nutrients that can help protect our hearts and reduce cholesterol levels. Rich in vitamins A, B6, iron, magnesium, phosphorus, and potassium, garden eggs offer the body many essential nutrients that can help reduce the risk of heart disease. Studies have shown that regular consumption of garden eggs significantly lowers cholesterol levels and helps maintain a healthy heart (Ekpe et al., 2020). 2.1.5 Agricultural Productivity Productivity measures the quantity of output produced with a given quantity of inputs. Long term productivity growth reflects improvements in farmers' production efficiency and technological progress. Agricultural productivity is measured as the ratio of agricultural outputs to inputs (Capalbo and Antle, 2015). While individual products are usually measured by weight, which is known as crop yield, varying products make measuring overall agricultural output difficult. Therefore, agricultural productivity is usually measured as the market value of the final output. This productivity can be compared to many different types of inputs such as labour or land. Such comparisons are called partial measures of productivity (Capalbo and Antle, 2015). Agricultural productivity may also be measured by what is termed total factor productivity (TFP). This method of calculating agricultural productivity compares an index of agricultural inputs to an index of outputs. This measure of agricultural productivity was established to remedy the shortcomings of the partial measures of productivity; notably that it is often hard to identify the factors cause them to change. Changes in TFP are usually attributed to technological improvements. 2.1.6 Determinants of Agricultural Productivity Agricultural productivity change is explained by many factors. These factors include: Land and water related factors (such as farm/water course location, quality of land, sources of water, quality and quantity of water and timing of water application, etc.); Climatic factors (i.e. rainfall, temperature, sunshine, frost, etc.); Agronomic factors such as quality, quantity and timing of input application (i.e. seeds, fertilizers, herbicides, labour, etc.); Socio-economic factors (such as farmers’ health, education, experience in farming, farm size, tenancy terms, land fragmentation and availability of credit); and Farm management factors (i.e. adoption of modern production technologies, farm planning and management practices, etc.) (Capalbo and Antle, 2015). Some of these factors are interrelated and the effects of some of them may be much greater than those of others and there may be locational variations in the degree of their effects on productivity. Some of these factors may be under the direct control of all the farmers. Others may be controlled by groups of other farmers, managers at the system level and policy-makers at higher levels. Yet some of these are beyond human control (Jiménez et al., 2018). Various other studies have documented some of these factors. Other factors that abound in economic literature include technology, labour employment, education and training of farm operators, agro-environmental conditions, security of land ownership rights and funding which determines the maximal physical quantity of output that can be reached as well as the number and quantity of inputs required (Doss, 2018). 2.1.7 Measures of Agricultural Productivity 2.1.7.1 Total-Factor Productivity Total-factor productivity (TFP), also called multi-factor productivity, is usually measured as the ratio of aggregate output (e.g., GDP) to aggregate inputs (Sickles and Zelenyuk, 2019). Under some simplifying assumptions about the production technology, growth in TFP becomes the portion of growth in output not explained by growth in traditionally measured inputs of labour and capital used in production. TFP is calculated by dividing output by the weighted geometric average of labour and capital input, with the standard weighting of 0.7 for labour and 0.3 for capital (Robert, 2017). Total factor productivity is a measure of productive efficiency in that it measures how much output can be produced from a certain amount of inputs. It accounts for part of the differences in cross-country per-capita income (Capalbo and Antle, 2015). For relatively small percentage changes, the rate of TFP growth can be estimated by subtracting growth rates of labor and capital inputs from the growth rate of output. he equation below (in Cobb–Douglas form) is often used to represent total output (Y) as a function of total-factor productivity (A), capital input (K), labour input (L), and the two inputs' respective shares of output (α and β are the share of contribution for K and L respectively). As usual for equations of this form, an increase in either A, K or L will lead to an increase in output. 2.1.7.2 Partial Factor Productivity The ratio of output generated to the single input factor is called partial productivity. The input factors can be labour, material, capital or overheads. The types of Partial Productivity are as follows: Labour Productivity = Total Output / Labour Input Labour Productivity (in terms of hours) = Total quantity produced / Actual man hours required to produce that quantity Labour Productivity (in terms of money) = Total cost (or sales value) of output produced / Amount in terms of rupees spent on workers The productivity of labour can be increased by increasing efficiency of labour and reducing labour time. Material Productivity = Total Output / Material Input Material Productivity= No of units produced / Total Material Cost Material productivity depends upon how material is effectively utilised in its conversion into finished product. Material productivity can be increased by using skilled workers, adequate machine tools, good design of product etc. Capital Productivity= Total Output / Capital Input Capital Productivity= Total Output / Capital invested Capital productivity depends on how effectively assets are utilized. It is vital to carry out timely replacement of fixed assets. This helps increase productivity and decrease overall costs in the long run. 2.1.7.3 Multifactor Productivity Multifactor productivity is a complete measure of the efficiency of all inputs used in production. It reflects the impact of economies of scale, improvements to the organization of production and technological change. Multifactor productivity examines growth in labour productivity through its key determinants: capital intensity (or changes in the amount of capital per hour worked), investment in human capital, technological change, organizational innovation and economies of scale. Multifactor productivity measures are presented as indexes of productivity and other related elements (output, capital input, labour input and intermediate inputs) for the business sector, broad economic subsectors and their constituent industries at the national, provincial and territorial levels (Sickles and Zelenyuk, 2019). Multifactor productivity (MFP) is the economic measure of performance that compares a business’ input to output to measure productivity. This comparison identifies the efficiency of the output of a company, factory or industry and is a gauge of the state of the economy. Input is resources such as capital, staff, equipment, time and materials. Output is the number of units produced, GDP and other monetary measures, such as revenue and profits. The MFP formula indicates how efficiently an organization uses resources, time and money to produce output. The MFP formula is: MFP = Output / Combined Inputs 2.1.8 The Framework The study will be based on various impacts imposed by constraints faced by garden egg farmers during every stage of production. Garden egg farmers makes decision in every stage of production such as input combination to derive specific quantity of output and also marketing decisions. During the production process, there are several challenges which militates against smooth production process, these problems are regarded as production constraints such as lack of storage facilities, inadequate finance, high cost of chemical fertilizers; and high level of post- harvest losses, poor soil fertility, pests and diseases attacks (Onu et al., 2016). All these production constraints tend to have a negative impact on production as well as the livelihood of garden egg farmers. Garden egg farmers are prone to having low yield and low income as a result of pest and diseases attack, poor soil fertility, and inadequate finance to purchase improved seeds. Ofana et al. (2016) reported that farmers well-being are affected due to the limitations they have especially during production, the following tend to have a negative impact on their livelihood; poor agricultural pricing policies, low fertilizer use, low access to agricultural credit, land tenure insecurity, land degradation, poverty and gender issues, low and unstable investment in agricultural research, and poor market access and marketing efficiency. Fig 1 Conceptual Framework of the Study. Source: Onu et al. (2016). 2.2 THEORETICAL REVIEW 2.2.1 Production Theory This theory explains to how farm enterprise decides the quantities of outputs to produce in response to demand. The resources firms use in production are called the factors of production, and they are also known as inputs. Factors of production are the resources firms use in production. Hein (2023) posited that the theory of production gives more insight on principles by which a farm enterprise determines how much of each good it will produce (its "outputs" or "products") and how much of each type of labor, raw material, fixed capital good, etc., it will use (its "inputs" or "factors of production"). Some of the most fundamental economic ideas are included in the theory. These include the connections between the costs of producing goods and the costs (or wages or rents) of the productive factors used to do so, as well as the connections between the costs of producing goods and the quantities of those goods and productive factors that are produced or used. A farm enterprise's many decisions on its productive activities can be divided into three tiers of escalating complexity. The first layer includes decisions about methods of producing a given quantity of the output in a plant of given size and equipment. It involves the problem of what is called short-run cost minimization. The second layer, including the determination of the most profitable quantities of products to produce in any given plant, deals with what is called short-run profit maximization. The third layer, concerning the determination of the most profitable size and equipment of plant, relates to what is called long-run profit maximization (Hein, 2023). Production function expresses the relationship between the quantities of factors employed and the amount of product obtained (Shephard, 2015). It states the amount of product that can be obtained from each and every combination of factors. This relationship can be written mathematically as y = f (x1, x2, . . ., xn; k1, k2, . . ., km). Here, y denotes the quantity of output. The farm enterprise is presumed to use n variable factors of production; that is, factors like hourly paid production workers and raw materials, the Garden Egg Production Constraints •••• Lack of storage facilities •••• Inadequate finance •••• High cost of inputs •••• High level of post-harvest losses •••• Poor soil fertility •••• Pests and diseases attacks quantities of which can be increased or decreased. In the formula the quantity of the first variable factor is denoted by x1 and so on. The firm is also presumed to use m fixed factors, or factors like fixed machinery, salaried staff, etc., the quantities of which cannot be varied readily or habitually. The available quantity of the first fixed factor is indicated in the formal by k1 and so on. The entire formula expresses the amount of output that results when specified quantities of factors are employed. It must be noted that though the quantities of the factors determine the quantity of output, the reverse is not true, and as a general rule there will be many combinations of productive factors that could be used to produce the same output. Finding the cheapest of these is the problem of cost minimization. The cost of production is simply the sum of the costs of all of the various factors. It can be written: Where p1 denotes the price of a unit of the first variable factor, r1 denotes the annual cost of owning and maintaining the first fixed factor. The production theory of the profit-maximizing peasant postulates that the peasant in attaining economic efficiency is aspired by dual goals: first, by attaining profit from the technical economic aspect of the farm as a business to produce the highest possible output which gives the highest net income measured either in monetary or physical terms; and second, by maximizing profit based on a behavioral content related to livelihood and the household need. This implies that the economic efficiency for a peasant farmer can be computed whether the producer is a subsistence farmer, or a fully commercial farmer (Shiferaw et al., 2022). Because it is a critical motive of a farm manager is to gain profit either in a monetary or physical unit, efficiency and profit maximization work together. 2.2.2 Profit Maximization Theory The profit maximization theory is the principle that every firm should operate in order to make a profit. According to Becker (2017), profit maximization is the short run or long run process by which a firm may determine the price, input and output levels that will lead to the highest possible total profit (or just profit in short). In neoclassical economics, which is currently the mainstream approach to microeconomics, the firm is assumed to be a "rational agent" (whether operating in a perfectly competitive market or otherwise) which wants to maximize its total profit, which is the difference between its total revenue and its total cost. Measuring the total cost and total revenue is often impractical, as the firms do not have the necessary reliable information to determine costs at all levels of production. Instead, they take a more practical approach by examining how small changes in production influence revenues and costs. According to Samuelson et al. (2021), when a firm produces an extra unit of product, the additional revenue gained from selling it is called the marginal revenue (MR), and the additional cost to produce that unit is called the marginal cost (MC). When the level of output is such that the marginal revenue is equal to the marginal cost (MR=MC), then the firm's total profit is said to be maximized. If the marginal revenue is greater than the marginal cost (MR>MC), then its total profit is not maximized, because the firm can produce additional units to earn additional profit. In other words, in this case, it is in the "rational" interest of the firm to increase its output level until its total profit is maximized. On the other hand, if the marginal revenue is less than the marginal cost (MR