ABSTRACT
The study was conducted to examine the choice of logistics and energy use by poultry enterprises in Abia State, Nigeria. Multi-stage random sampling technique was adopted in this study while data were collected with the use of structured questionnaire. Simple descriptive statistics such as means and percentages as well as econometric tools such as the multinomial logistic regression model, farm budgeting analysis tools, ordinary least square regression and Z-test statistics were used for data analysis. The results obtained from the descriptive statistics showed that poultry business in the study area was dominated by males who were still strong, agile, and active. Majority of the respondents combined both private and public means of logistics and energy sources in their poultry business enterprises. The multinomial results showed that gender, age, years of education, number of employees, business scale, income, business location, marital status and energy cost were the factors that affected choice of energy source. Gender, age, years of business experience, years of education, business scale, start-up capital, income, business location, market distance, marital status and logistics/transportation cost were the factors that affected choice of logistics (transport) means in the study area. All the performance indicators confirmed that poultry is a viable and profitable business in the study area. For instance; the average total revenue realized from sales was ₦2,105,424 for the current production season. The Net Income was ₦663,363.7 with a Gross Profit Margin of 67%. This implies that poultry entrepreneurs earned 67% profit on the average for every naira sales before other business expenses are paid. Operating ratio of 33% implies that poultry enterprises are able to minimized operating expenses in their operations as it accounted for only 33% of the total expenditure for the production season. The Return on Investment showed that the entrepreneurs obtained on the average ₦1.46 return on a naira investment. The RRFC showed that the enterprise gained on the average ₦ 1.89 for every naira invested in fixed costs. Rate of return on variable cost also indicated that the enterprise gained on the average ₦1.94 for each naira invested in the variable cost of operation. The OLS results of the factors that affected the profit performance of poultry enterprise showed that gender, age, years of education, distance to market, capital, business location and energy cost were negatively related to performance while number of employees and business scale were positively related to performance. The result of the Z-test indicated that Poultry enterprise that used the private source of energy had more profits (N 212,074.9) than those that used the public energy source (N 157,803.9) and those that used both sources together (N 38,759.23) respectively. On the other hand, the enterprise that used both public and private mode of logistics/transportation together had more profit (N 193, 70.4) than those who used public mode (N186,194.2) and private mode (N117,621.1) respectively. It is also essential to improve the quality of transportation services especially in terms of regularity of arrival and departure times so as to meet customers’ needs. Since transport is one of the various elemental factors in rural development and it is necessary to understand its role in rural development and particularly how it interacts alongside other factors of development, to produce the resulting structure of the rural economy and society. The government and policy makers are therefore advised to give adequate attention to improving power generation and supply especially to the industrial sector.
TABLE
OF CONTENT
Tittle
page i
Declaration ii
Certification iii
Dedication iv
Acknowledgement v
Table
of content vi
List
of table vii
Abstract viii
CHAPTER 1
1.0 INTRODUCTION 1
1.1 Background
of the study 1
1.2
Statement of the Problem 3
1.3
Objective of the Study 6
1.4 Hypothesis
of the Study 7
1.5
Significance of the Study 7
CHAPTER 2
2.0 LITERATURE REVIEW 8
2.1.0 Conceptual Framework 8
2.1.1 Concept of poultry enterprise 8
2.1.2 Profit
performance of poultry enterprises 10
2.1.3 The
role of poultry to human diet 11
2.1.4 Challenges
confronting poultry industry in Nigeria 13
2.1.5 Prospects
for poultry industry in Nigeria 14
2.2.0
Concept of energy/power supply 18
2.2.1
The energy/power supply and poultry
enterprises in Nigeria 19
2.3
Concept of logistics/transportation 22
2.3.1 logistics/transportation and poultry
enterprises’ Performance in Nigeria 23
2.3.2 Logistics,
energy power supply, and poultry enterprise performance in Nigeria 26
2.4 Empirical
Framework 27
2.5 Theoretical
Framework 30
2.6 Analytical
Framework 31
2.6.1 Comparison
of the mean variation between two population samples 31
2.6.2
Regression Analysis 31
2.6.3 Multinomial Logistic Regression analysis 32
CHAPTER 3
3.0 METHODOLOGY 34
3.1 Study
Area 34
3.2
Sampling Procedure and Sample Size 34
3.3 Method
of Data Collection 35
3.4 Method of Data Analysis 35
3.5 Model Specification 35
CHAPTER 4
4.0
RESULTS AND DISCUSSION 42
4.1
SOCIO-ECONOMIC CHARACTERISTICS OF
THE POULTRY FARMERS 42
4.1.1 Gender 42
4.1.2 Age 43
4.1.3 Location 44
4.1.4 Poultry Entrepreneurs Experience 45
4.1.5 Marital Status 46
4.1.6 Household Size 47
4.1.7 Level of Education 48
4.1.8 Cooperative
Membership 48
4.2 Use of Energy and Road logistics/transportation
Utilities 49
4.2.1 Logistics/transportation means 48
4.2.2 Energy/power sources 49
4.3 Factors Affecting Enterprises’ Choice of
Energy Sources and logistics 51
4.3.1 Energy Sources 51
4.3.2 Mean of logistics 55
4.4 Performance of the Poultry Enterprises 59
4.5 Factors
Affecting the Profit of Poultry Enterprises 61
4.6 Difference
in Profit of Poultry Enterprises by Energy sources
and logistics 64
CHAPTER 5
5.0
SUMMARY, CONCLUSION AND RECOMMENDATIONS 66
5.1 Summary 66
5.2 Conclusion 68
5.3 Recommendations 69
LIST
OF TABLES
Table 4.1: Distribution of respondents according
to gender 42
Table
4.2: Frequency distribution of respondents according to Age 43
Table 4.3:
Distribution of respondents according to location 44
Table
4.4: Distribution of respondents according to experience 45
Table 4.5: Distribution of respondents
according to marital statues 46
Table 4.6: Distribution of respondents
according to household size 47
Table 4.7: Distribution of respondents
according to educational qualifications 48
Table
4.8: Distribution of respondents according to membership of cooperative 48
Table 4.9: Distribution of respondents
according to logistic/transportation use 49
Table
4.10: Distribution of respondents according to energy use 50
Table
4.11: MNL estimates of factors affecting the choice of the source of energy use 51
Table
4.12: MNL result of factors affecting respondents’ choice of logistic/transport 55
Table 4.13: Farm budgeting analysis result
of the of the poultry enterprises 59
Table 4.14: OLS result of factors
affecting the profit of poultry entrepreneurs. 61
Table 4.15: Paired samples statistics of
profit by energy and logistic modes 65
Table 4.16: Paired differences among
combinations 65
CHAPTER
1
INTRODUCTION
1.1 BACKGROUND
TO THE STUDY
Poultry production has emerged as one of
the most effective means of achieving a speedier and more sustainable economy,
with greater rates than other livestock, the quickest budget returns, and
better living conditions for more people. In poorer countries, it is prevalent.
(Ojo, 2002)
In
Nigeria, poultry enterprise contributes about 25% to the Nation's Agricultural Gross
Domestic Product (GDP) and employs around 20 million people through direct and
indirect jobs (FAO, 2011; Bassey, 2014). It provides the best quality and cheapest
source of animal protein and manure and is widely accepted across all religions
(Ojo, 2002; David, 2010). The sector is well-known for being a powerful engine
of Nigeria's employment generation, having a very high multiplier effect in
terms of job creation, poverty alleviation as well as generation of revenue to
the government (taxes, fees, etc.) as a result of their forward and backward
connection (Wishart, 2001). A new poultry enterprise, for instance, creates
jobs and generates income not only for the entrepreneur and his family members
but also for food vendors and intermediaries in the same line of business.
There
are increasing prospects for poultry enterprises in Nigeria due to the rapid
increase in population growth, high demand for protein, the building block of
life (mainly as poultry provides the best amino acid profile known to man) and
large market size. Because of the restriction on the importation of agricultural
commodities in the country and the general acceptability of poultry products
across all races and religious groups in the country (Afolabi, 2012). A clear
trend is a wide gap between the demand and supply of chicken\eggs in Nigeria, as
they are essential and among the most affordable sources of high-quality
proteins, minerals, and vitamins to balance the human diet (USDA, 2013).
For
poultry enterprises to sustain their impressive performances, sustainable and
adequate energy supply and good logistics are critical infrastructures
(Adeyemi, 2013). Logistics (transportation) is an essential factor in
agricultural development worldwide; it is the most important and the cheapest
means of moving agricultural produce from farms to marketplaces and then to
diverse homes and urban communities (Tunde and Adeniyi, 2012). Logistics
(transportation) is also critical for entrepreneurs/businesses to create
markets for their products (Dominic, 2014). It is the quickest, most
convenient, and flexible for the door–to–door collection and delivery of farm
inputs\ outputs (Stella, 2012). It is also critical in stabilizing prices and
creating time and utility for agricultural produce (Tunde and Adeniyi, 2012). Excellent road
transportation helps to open up rural areas, making them more accessible and intensifying
business development (Ahukannah, Ndinaechi and Arukwu 2003). It reduces the
expenditure on inputs and reduces the time of moving goods and services to needy
people. Road transport remains the dominant means of transportation in the
country as 90% of roads are used for all internal movement of commodities and
people (Muktar, 2011)
cited in Edith and Adebayo (2013).
On
the other hand, affordable and sustainable energy supply is equally a critical
infrastructure because the economic growth of any country depends on the long-term
availability of energy from affordable and environmentally friendly sources
(Bassey, 2014; Onwumere, Itohowo, and Idu, 2017). In poultry, an affordable and
reliable source of energy is essential for lighting, heating of pens, and
powering equipment and appliance like a refrigerator for adequate storage of
vaccine, egg, and processed meat and creating an ideal environment to keep
chickens healthy (Ewa, 2016).
To
this end, dependable and economical energy and good logistical planning (good
transport network) are critical infrastructures and prerequisites for
industrialization and sustainable economic growth (Adeyemi, 2013). There are
critical drivers of business efficiency and cost reduction. Conversely, lack of
its results in business inefficiency, high cost of operation and can lead to
economic decline (Okafor, 2008; Adeyemo, 2012). Hence, a good road
transportation network for proper logistics and reliable energy should be
available and affordable to enable enterprises to minimize cost, maximize
profit and stay in business.
Over the years, the Nigerian government
has implemented some energy sector changes in order to reach the country's
minimum acceptable international level of energy supply, including the
establishment of the electricity corporation of Nigeria (ECN), the Niger Dam
Authority of Nigeria (NDA), etc. (Sunday, 2012; Rai, 2004). Others are the 215
MW Kaduna power, 40 MW Kashimbilla power (Hydro), 40 MW Gurara 1 power (Hydro),
240 MW Afam power project (Gas), etc. (Ezeh and Kenneth, 2016). In addition,
the Federal Government has equally initiated some federal roads' rehabilitation
to ease transportation (logistics) and encourage economic activities across the
country; these include Port Harcourt-Aba road, Ikot ekpene road, Aba road, etc.
(Fashiola, 2016). In addition, the state governments have also implemented some
transportation and energy/power infrastructure projects to complement the preliminary
effort of the Federal Government in promoting business and industrial
activities (Umuochama road, old express Road, Umora Road, Fulks Road, Oma
power, Alanji power plant etc.) (Aba, 2016), and has equally call on the
federal government to declare state of emergency on infrastructure especially
federal roads in Abia State (Ikpeazu, 2016).
1.2 STATEMENT OF THE PROBLEM
The menace of poor road networks (for
logistical outreach), unreliable and unaffordable energy sources have
negatively impacted Nigeria's growth (Okafor, 2008). Despite increased
government spending on travel and energy in the following years, as well as
increased tolls, road workers forecast high registration payments (driving
license, plate number, stickers, emblems, etc.), and the day to day hike in the
transport fare by the transport service providers, the transportation and
energy infrastructures in the country are primarily outdated, dilapidated and
malfunctioning in most cases (Nebo and Alike, 2013; Alaribe, 2016). These disrupt
agro-industrial, agribusiness, and entrepreneurial activities, and general
economic growth.
For the past decade, Nigeria has been
unable to provide reliable, reasonable, and low-cost electricity to the rest of
the nation (Ekpo, 2009). For instance, Alaribe (2016) observed that the country
generates less than 4000 Megawatt of electricity for about a 150million people.
In contrast, South Africa generates 40,000 Megawatt of electricity for about a
50million people, and the United Kingdom generates 83,000 Megawatt of
electricity for about a 62million people. Moreover, the country remains one of the
significant standby purchasers of electricity generators globally (Braimoh and
Okedeyi, 2000), as cited in Bassey (2014).
In
a similar observation, about 47% of the federal roads and 70% of state roads in
Nigeria are deplorable (Ahon, 2016; Isibor, 2016). In addition, Nigeria is
currently ranked the second highest in traffic and road accidents among the
world's countries (Alaribe, 2016); this hampers industrial and commercial
activities across the country.
Good road networks and electricity that
are both dependable and economical, which are always needed to stimulate
entrepreneurial and commercial activities, are not always available
simultaneously to businesses, especially in the rural communities (Ekpo, 2008).
For instance, while some enterprises and business people may have access to energy
supply (public, private, or both) which guarantee operational and production
efficiency and effectiveness (Abubakar, 2016), they can only do little or
nothing in accessing markets, customers and consumers for their products with
bad road networks as logistics (Ajiboye and Afolayan, 2009). Hence, producing
what they cannot sell (i.e., operating at a loss).
These situations are not different in Abia
State, especially as the State is viewed as a backward state in terms of
infrastructural (energy and transportation) development as indicated by
persistent energy outage, reliance on self-generating power (Gordi, 2015),
frequent felling down of electricity pools, gallops, and potholes causing
unnecessary vehicle breakdown and damages as well as a high rate of traffic jam
(hold up), etc. (Aba, 2016), on the major roads across the State. Poultry
entrepreneurs risk the constant decay of processed chickens due to constant
power failure. Many poultry enterprises have packed up business because of lack
of dependable and cheap energy supply and access road for proper logistics of
goods.
The poor State of the road for efficient
logistics and unreliable energy supply have weakened the efficiency and
effectiveness of poultry enterprises in processing, storage, and even marketing
(distributions) of their commodities by way of production stoppage, high
operating cost, high cost of marketing and distribution expenses (Bassey, 2014;
Adeyemo, 2012). In other words, poultry enterprises are recording an increasing
number of death on birds and damages on eggs in their effort to access the
market due to poor road networks as well as a high percentage of spoilage on
processed chickens, meats, eggs, and vaccines because of power outage (Udoh and
Etim, 2009). High cost of transportation (logistics) and unreliable energy
supply have become significant constraints in the poultry business as
enterprises/enterprisers spent about 35-percent of their revenue on logistics
and energy (Bongani and Micah, 2013). Also, there are no available records or
scholarly publications on the examination of the choice of logistics and energy
used by poultry enterprises in Abia State which could have been of help in
enlightening both the poultry entrepreneurs and the government.
It is against this background that this
study was designed to address the following questions:
(i) what are the socio-economics
characteristics of the poultry enterprises in the study area?
(ii)
what are the logistics and energy power utilities use categories (choices)
adopted by the enterprises?
(iii)
what factors affect the choice of logistics and energy usage by the respondents?
(iv)
what are the performance of the poultry enterprises in the study area?
(v) what are the factors that affect the
profit performance of poultry enterprises in the study area?
(vi)
are there any statistical differences in the profit performance of the
respondents based on logistics and
energy utilities?
1.3 OBJECTIVE OF THE STUDY
The broad objective of the study is to
examine the choice of logistics and energy used by poultry enterprises in Abia
State, Nigeria.
The specific objectives are to;
(i). describe the socio-economic characteristics
of the poultry operators/entrepreneurs in the study area.
(ii). to categorize the respondents based
on the use of logistics and energy utilities.
(iii).
investigate the factors that affect the choice of logistics and energy utilized
by the respondents.
(iv). examine the performance of the
poultry enterprises in the study area.
(v). identify the factors affecting the
profit performance of poultry enterprises in the study area
(vi). compare the difference in the profit
of the respondents based on the use of logistics and energy utilities.
1.4
HYPOTHESIS OF THE STUDY
Ho1: the performance of poultry
enterprises in the study area is not statistically significant
Ho2: the logistics and energy
use does not have a significant effect on the respondents' profit
Ho3: there is no significant
difference in the profit of the respondents based on logistics and energy
utilities
1.5
SIGNIFICANCE
OF THE STUDY
This work being in line
with the current economic realities, shall be of great benefits to the various
public of the study area, especially the government, Poultry operators and Potential entrepreneurs in poultry business in
Abia State, who are self-investors as they have been marginalized in the
policymaking.
This
work shall help enlighten the government and other relevant bodies on the
intricacies of poultry production to ensure that policies are formulated to
impact the entrepreneurs positively.
In
the light of the private-sector-led investment in the Agricultural
Transformation Agenda (ATA), it is imperative to meet poultry demands
sustained. Thus, entrepreneurs should be encouraged by projecting their
constraints in production.
Provide
caution in business planning to enable poultry entrepreneurs to plan their
production profitably.
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