changing farm structure and agricultural commercialization ......inclusive growth in the...
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Changing Farm Structure and Agricultural Commercialization: Implications for Livelihood Improvements among Small-Scale
Farmers in Nigeria
Adebayo B Aromolaran, Milu Muyanga, Thomas Jayne, Saweda Liverpool-Tasie, Titus Awokuse, Elijah Obayelu , Fadlullah .O. Issa
Work Stream 1 Study
APRA Annual Research Review and Planning WorkshopUniversity of Ghana, Legon, and the
Institute of Statistical, Social and Economic Research (ISSER)Ghana – 3-8 December 2018
Funded by UK aid from the UK Government
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Introduction • In the past, national development policy strategies within
the SSA region officially regard the smallholder farming sector as the main vehicle for achieving sustainable and inclusive growth in the agricultural sector.
• However, the recent wave of rise of medium scale farms across SSA is providing an alternative pathway to food security, poverty reduction, and employment.
• These changing farm structures is expected to impact to the livelihood outcomes of the millions of smallholder farms through the growth of commercialization
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Research Questions i. What are the characteristics of the emerging medium-scale farms?
ii. Are there productivity differences between small and medium-scale farms?
iii.How do these MSFs influence the behavior and welfare of the millions of small-scale farm households around them?
iv.Are there differences in welfare of medium scale farm households compared with small scale farm households ?
v. Should Medium Scale Investor farms be promoted as a policy tool to promote agricultural commercialization and transformation?
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Map Of Nigeria showing APRA WS1 & WS3 Study Locations
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Key Findings (1)Basic Types of MSFs identified:
Stepping Up: MSFs who Transitioned from SSFs (TMSFs)
Stepping In : MSF who started off as Medium Scale Farms (CMSFs)
Stepping-up is more common ( 40%) than Stepping-in ( 24%) in past 8 years (2010 -2018)
Land Use Patterns :
Non-staple food crops are more common with MSFs relative to SSFs
Productivity Differences
Land Productivity: SSFs greater than MSFs
Labour Productivity: MSFs greater than SSFs
Productivity (both land and Labour) : CMSFs greater than TMSFs
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Key Findings (2)Degree of Commercialization: HCI: “Stepped Up” MSFs (72%) higher than Small Scale Farms (63%)HIMCI: Stepped Up” MSFs (15%) higher than Small Scale Farms(10%)Spill–Over Effects :
Providing extension services/information in terms of use of improved seeds and better planting techniques is most common form of Interaction between MSFs and SSFs
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Key Findings (3)Welfare Indicators
Income Poverty Index : Small Scale farm Households (SSFH) are poorer (IPI= 35%) than Medium Scale Farm households (MSFHs); (IPI=13 -14%)
WEI : Women in MSFHs are more empowered (63% For TSMFs and 59% for CMSFs ) than women in SSFHs (56%)
MDD_W: SSFHs ( 59%) are better than MSFHs ( 53% and 37%)
MPI : MSFHs not different from SSFHs ( 20% -22%)
Food Insecurity Experiences : MSFHs not different from SSFHs (42-44%)
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Key Findings (4)
Some Key challenges for growth of MSFs
• Security of tenure is very low among MSFs as is with SSFs
• Land acquisition through land markets is Limited due to underdeveloped land markets
• Inheritance, which is the most important source of land for expansion, is unsustainable
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Highlights i. Promoting Medium Scale farms could be an important policy tool for
enhancing agricultural commercialization and smallholder transformation in Nigeria
ii. We observe that MSFs are better off than SSFs in terms of labor productivity, degree of Commercialization, and some livelihood outcomes such as poverty reduction and women empowerment
iii. The rise of MSFs can potentially enhance the transformation of SSFs through observed spill-over effects
iv. To promote the growth of MSFs, policy will need to effectively address the issue of land tenure security and increased access to land markets by prospective investors.
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NEXT STEPS : PLAN FOR 20191. Finalize WS#1 Report and Working Paper2. Prepare at least four research papers and journal manuscripts
i. Medium-scale farming as a pathway to agricultural commercialization in Nigeria
ii. Relationship between Farm Size and Productivity: Evidence from Nigeria
iii. Spillovers between medium- and smallholder farmsiv. Do medium Scale Farm households have better livelihood
outcomes than small scale farming households: 3. Conduct qualitative data collection4. Conduct stakeholder outreach event in Nigeria
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More Detailed ResultsPresentation
11
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Characteristics of MSFs : Basic Types
The study identifies two basic categories of Medium scale farms:
i. Transition from small to medium scale farms - “Stepping up group”
ii. Emergence of investor farmers that start off as medium scale level farmers-”Stepping in group ”
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Figure 1 : Farm-types in the Commercialization Pathway
97.40%
2.60%
47.30%52.70%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
Small Scale Medium-scale
Small-scale
Medium-scale
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Identification of Pathways to Commercialization contd.
• Stepping up rate has been low : 6% stepping up in 3 decades
• Stepping up is more important mode of entry into medium scale farming witninthe past decade. 40% stepped up and 24% stepped in within 2010-2018
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Land Use Pattern Differences.
• OGUN : Staple foods( Starch & Cereals ) more popular with SSFs; Non-staple crop groups (fruits, beverage (Cocoa) , oil seeds , nuts, pulses ) more common with MSFs.
• Kaduna: all categories more common for MSFs compared with SSFs
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Cropping Pattern Differences: Ogun State
0100200300400500600
Figure 9 : No of Farmers by Crop and Scale - OGUN
Small Scale Medium Scale
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Cropping Pattern Differences: Kaduna State .
0200400600800
1,0001,200
Figure 10 : No of Farmers by Crop and Scale- KADUNA
Small Scale Medium Scale
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Characteristics of Pathways: Productivity Indicators
• land and labor productivity are generally higher for MSFs who “stepped in” relative to those who “stepped up”.
• Land productivity declines with farm size, while labor productivity increases with farm size.
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Productivity Indicators
0100200300400500600700800900
Crop income per ha planted
‘000N
Crop income per adult
person ‘000N
Crop income per day spent
in the farm ‘000N
Net income per adult
equivalent ‘000N
Chart Title
CSSFTSSFTMSFCMSF
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Productivity Indicators by State (Ogun) : Net Income(Y)/adult labor use (L2)Net Income (y) /Hectare, by farm size
0.00500,000.00
1,000,000.001,500,000.002,000,000.002,500,000.003,000,000.003,500,000.004,000,000.004,500,000.00
below2ha
2-5 ha 5-10 ha 10-20 ha 20 haand over
Y1 /L2Y1/AL2/A
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Productivity Indicators by State (Kaduna): Net Income(Y)/adult labor use (L2)Net Income (y) /Hectare, by farm size
67,309.16135,029.09
251,543.63 276,793.45
1,589,853.52
0.00200,000.00400,000.00600,000.00800,000.00
1,000,000.001,200,000.001,400,000.001,600,000.001,800,000.00
below2ha
2-5 ha 5-10 ha 10-20 ha 20 haand over
Y1/L2
Y1/A
L2/A
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Characteristics of Pathways: Levels of Commercialization
Medium Scale Farms who “stepped up” (TMSF)Have attained:Higher degrees of commercialization
Compared with:Small Scale Farms who “hanged in” (CSSF) In both: Input and output markets
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Characteristics of Pathways: Levels of Commercialization
Current farm scaleSmall-scale Medium-scale
Farm scale when household started farming
Farm scale when household started farming
Small-scale(CSSF)
Medium-scale(TSSF)
Small-scale(TMSF)
Medium-scale(CMSF)
N 1065 34 476 534Household commercialization index
62.78 62.71 71.92 61.07
Household Input Market Commercialization Index ( HIMCI)
10% 18% 15% 9%
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Spillover Effects
MSFs interacts with SSFs in the following economically beneficial ways, in order of importance :
i. Provision of extension guide/services ii. Sales of farm inputs to smallholders, iii. Joint purchase of farms inputsiv. Rentals of tractor and farm machinery
services
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Spillover Effects: Services from MSFs to SSFs
0%
10%
20%
30%
40%
50%
60%
Services Formerly Small-Scale, now MS (TMSF)Services ConsistentlyMedium-Scale (CMSF)
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Extension Service Provided by MSFs : Common forms
i. Use of improved seeds (40%)
ii.Better planting techniques (16.4%)
iii.Use of tractor for land preparation (13.3%)
iv.Better timing of farming activities (11.7%).
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Extension Service Provided by MSFs : Common forms
39.5
16.413.3
11.7
19.1
Percent
Use of improved seed
Better plantingtechniquesUse of tractor for landpreparationBetter timing of farmingactivitiesOther
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Welfare Indicators i. Farms who remained as small scale were
poorer than those who stepped up to MSFs
ii. Women from households of TransitinedMSFs are more empowered relative to those from Small scale farming households
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Welfare Indicators • Preliminary Results Indicates
No Difference
• between SSFs and MSFs in terms of both:
• Minimum Dietary Diversity for Women
and
• Food Insecurity Experience of Household
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Welfare Indicators Current farm scaleSmall-scale Medium-scaleFarm scale when household started farming
Farm scale when household started farming
Small-scale(CSSF)
Medium-scale (TSCF)
Small-scale(TMSF)
Medium-scale(CMSF)
N 1065 34 476 534Income Poverty Index (Poverty Headcount)
35% 47% 13% 14%
MPI 43% 55% 44% 50%
MPI (adjusted) 20% 27% 21% 22%
MDD_W 59% 48% 53% 37%
Food Insecurity Experience Scale (FIES)
42% 48% 44% 42%
Women Empowerment Index
56% 74% 63% 59%
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Welfare Indicators
0%10%20%30%40%50%60%70%
CSSFTMSFCMSF
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Key Challenges Characterising the rise of Medium Scale Farms i. Security of tenure is very low among MSFs as
is with SSFs
ii.Land acquisition through land markets is Limited due to underdeveloped land markets
iii.Inheritance, which is the most important source of land for expansion, is unsustainable
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APRA Nigeria WS1 & 3 Data Collection Staff
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APRA Nigeria Stakeholders Meeting 2018 Collection Staff
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Visit of APRA Nigeria WS1 Leadership to The Permanent Secretary, Kaduna State Ministry of Agriculture
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Visit of APRA Nigeria WS1 Leadership to The Permanent Secretary, Ogun State Ministry of Agriculture
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APRA Nigeria WS1 Field Staff in a periodical data collection review meeting with Country and Ogun State Coordinators, at Obafemi Owode LGA, Ogun State, April 2018