ABSTRACT
The study analyzed the determinants of farmland value and productivity of food crop farmers in Imo State, Nigeria. The specific objectives were to examine the socio-economic characteristics of the food crop farmers, examine the methods of land acquisitions, determine the productivity of farmland and determinants of productivity of food crops, and evaluate the factors influencing farmland value and the value of farmland. Primary data were collected using a set of structured questionnaires from 250 respondents who were selected through purposive and random sampling techniques. Data were analyzed using descriptive statistics, productivity ratio and econometric tools. The results of the socio- economic characteristics of the farmers revealed a mean age of 40.22 years, an average of 9.07 years of formal education, a mean of 10.4 years of farming experience, an average of 6 persons per household. The mean farm size was 1.028 hectare and inheritance as the method of land acquisition. The results further showed that productivity of farmland was 3.09 and productivity of food crop farmers was 3.48. The results of the Ordinary Least Square multiple regression model for productivity of food crop farmers further showed that depreciated fixed input and cost of soil improvement were significant at (p< 0.01), type of soil, quantity of fertilizer, agrochemical, household size and farm experience were significant factors at (P<0.05) for productivity of food crops in Imo State. The result further showed that the average farmland value was N53,975.91. The results of the Ordinary Least Squares multiple regression model for factors influencing farmland value showed that location and purpose of use were significant at(P< 0.05), access to road and returns on land were significant at (p<0.1) and distance, community levy and duration of tenancy were significant factors for farmland value at (P<0.01). Reduction in the annual rental value of farmland through the removal of community levy, communal allocation of farmland to individual farmers and access to credit were recommended for rural farmers to increase the size of their farmland and to increase their productivity in the study area.
TABLE OF CONTENTS
Title Page i
Declaration ii
Certification iii
Acknowledgements iv
Table of Contents v
List of Tables vi
Abstract vii
CHAPTER 1: INTRODUCTION
1.1 Background Information 1
1.2 Problem Statement 5
1.3 Objectives of Study 7
1.4 Hypotheses 7
1.5 Justification for the Study 8
1.6 Limitations of the Study 9
CHAPTER 2: LITERATURE REVIEW
2.1 Concept of Farmland 11
2.1.1. Farmland and its related concepts
2.1.2 Farmland value and its determinants 11
2.1.3 Farmland utilization and determinants 12
2.1.4 Concept of resource productivity 23
2.1.5 Concept of land valuation 26
2.2 Theoretical Framework
2.2.1 Theory of production 27
2.2.2 Factors of production 28
2.3 Empirical Framework
2.3.1 Empirical studies on farmland value 32
2.3.2 Empirical studies on land use 33
2.3.3 Empirical studies on productivity 34
2.4 Framework of Analytical Tools
2.4.1 Farmland value model 36
2.4.2 Cob-douglas production frontier 39
2.4.3 Ordinary least squares regression models 41
2.4.4 Test of hypotheses 42
CHAPTER 3: METHODOLOGY
3.1 Study Area 43
3.2 Sampling Procedure 44
3.3 Data Collection 44
3.4 Methods of Data Analysis 45
CHAPTER 4: RESULTS AND DISCUSSIONS
4.1 Socio-economic Characteristics of Farmers
4.1.1 Distribution of respondents according to age 50
4.1.2 Distribution of respondents according to marital status 51
4.1.3 Distribution of respondents according to sex 52
4.1.4 Distribution of respondents according to levels of education 53
4.1.5 Distribution according to major occupation 54
4.1.6 Distribution of the respondents according to farming experience. 55
4.1.7 Distribution according to household size. 56
4.2 Methods of Land Acquisition 58
4.3 Productivity of Farmland and Determinants of Productivity of Farmland.
4.3.1 Productivity of farmland 59
4.3.2 Determinants of productivity of farmland. 60
4.4 Productivity of Food Crop Farmers and the Determinants of Productivity of Food Crop Farmers
4.4.1 Productivity of food crop farmers 63
4.4.2 Determinants of productivity of food crop farmers in the study area 64
4.5 Factors Influencing Farmland Value and Estimated Land Value
4.5.1 factors influencing farmland value 68
4.5.2 Estimated land value 72
4.6 Test for Hypotheses 73
CHAPTER 5: SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary 75
5.2 Conclusion 77
5.3 Recommendation 77
References
LIST OF TABLES
4.1 Distribution of respondents according to age 50
4.2 Distribution of respondents according to marital status 51
4.3 Distribution of respondents according to sex 52
4.4 Distribution of respondents according to levels of education 53
4.5 Distribution of the respondents according to major occupation distribution 54
4.6 Distribution of the respondents according to farming experience 55
4.7 Distribution of the respondents according to household size 56
4.8 Distribution of the respondents according to farm Size 57
4.9 shows the distribution of respondents according to methods of land acquisition 58
4.10 Productivity of farmland 59
4.11 Determinants of productivity of farmland 60
4.12 Productivity of food crop farmers 63
4.13 Determinants of productivity of food crop farmers. 64
4.13 Factors influencing farmland value 68
4.14 Estimated Land Value in Imo State Per Annum 72
4.15: Showed the test of hypotheses (H1) and (H2) 74
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND INFORMATION
Land is a factor of production and a critical input in agricultural production (Raufu, 2010). The criticality is imposed by its availability, accessibility, quality and quantity. In Nigeria, the quality factor stands out as major determinants of land productivity. Land is an important natural resources, used as an input factor in economic activities, such as agricultural, forestry, industrial and commercial uses. The economic allocation of land depends on return from these alternative uses, Salman etal. (2016). According to Koomen and Buurman(2000), land has special characteristics compared to other inputs: its supply is fixed, has a fixed location, and its use affects the use and value of surrounding parcels.
Land has been described as all forms of natural resources with which a particular country has been endowed with, which are used in production (Onyebinama, 2000). It refers to those resources over which people have the power of disposal and which may be used to yield income. Land also supports other factors of production according to (Anyanwuocha, 2011).As land is the most basic means of production in the agribusiness sector, the quality of the land has a sizeable influence on its price, several factors can be used to evaluate the influence of land quality on its price( Kostov, 2009).
Farmland value is the price of a cultivated farm land per hectare forproduction in a voluntary transaction. Land prices are differentiated on the basis of its production attributes in agriculture as well as other activities (Duvivier et al., 2005).An increase in farmland value most likely is driven by a combination of various factors to include, increase agricultural productivity, high commodity production, price, expanding trade and strong demand for non-agricultural land uses (Anderson, 2003). According to (Ehirimet al., 2017),the value of land is rarely influenced by its demand for constructions, building and urban development, hence, the potential returns of agricultural activities are converted into farmland prices, with other variables reflecting the economics returns to agriculture.
Farmland value also refers to the natural values, environmental qualities and cultural heritage that support farming which provide benefit beyond food production. Land is mostly influenced by some natural and human factors that account for its development frame work and value. The framework of land conceptualizes the economic and social features of land which leads to its increasing value (Ehirimet al., 2017).
Economists have over the years studied the structure of agricultural land values or price in other to understand potential threats posed on land development to agriculture considered to be socially undesirable land use for food crops production (Andrew et al., 2002). According to Oduwaye (2005), who examined land values in residential neighborhood in metropolitan Lagos, residential segregation exists in Nigeria between lands at different locations.His findings show that there are strong relationships between the residential land and agricultural land values such as rent, cost, and cost of a plot of land. The outcome of the study showed that infrastructural facilities and economic variables are the major determinants of residential and agricultural land values in residential neighborhood.
Price is the only factor that must be considered when purchasing land, rental price and other factors include location, timing of an expansion and the financial situation of an individual and personal goal of a land owner have room to flex land value (FCC, 2015). The capability of land for agricultural growth and development is dependent on some environmental sustainable land management practices. However, some land tenure system such as land on lease cannot be subjected to soil improvement due to size fragmentation and landlord’s authority respectively (Bassey, 2008). In the agricultural sector, before any land is purchased for utilization, the price of the land must be estimated. The determinants of farmland prices are those items that influence the amount of farmland offered to the market and the amount of farmland desired from the market. However, the farmland market is different from the markets for products such as maize, soybeans, fertilizer or even equipment (Brent et al., 2010).
Productivity is the measure of effectiveness (Fakayode, 2009). Increasing the productivity of scarce resources is a giant move to economic growth and development. Reddy et al. (2009) opined that productivity denotes the efficiency with which various inputs are converted into products. Food crop productivity is the ratio of the total value ofoutputs per hectare to the total value of inputs used in the production process (Etiosa and Agho, 2007). A low value farmland may not support increasing food crop output over the year; hence food crop output on marginal suitable farmland can hardly sustain the increasing population of farm households nor solve the food security problem of Imo State Nigeria (Ohajianyaet al., 2016).
Soil infertility and farmland degradation has been considered as some of the major constrain facing agricultural productivity in Southeastern Nigeria. In an effort to meet the food need of increasing population in the area, agricultural farmlands have been subjected to overuse such as continuous cultivation, bush burning and other anthropogenic activities (Onwudike, 2010).
A study conducted by Onwudikeet al. (2015), in AhiazuMbaise reinstated that high population density has resulted to over utilization of farmland with different cropping systems in order to meet the food requirement of the population.
With rapid population growth and enforcement of land tenure systems, fragmentation of land becomes rampant, which reduces agricultural productivity (Ezeet. al., 2003). A suitable farmland is put under pressure of continuous cropping while marginal suitable and unsuitable farmlands have continued to lose their fertility (Ehirimet al., 2006). Productivity assessment in the agricultural sector is very important to improvement of the economic well-being of the entire country (Alabi, 2005). The predominant decline in agricultural productivity has translated into gross deficit of the sector to meet the increasing food demand and by extension led to perennial food shortages, soaring food prices and massive importation (Imodu, 2005; Onyenweaku and Nwaru, 2005). Tanko et al. (2006) affirmed that Nigeria’s food deficient situation has been worsened by declining farm productivity owing to inefficient production techniques, poor resource base and declining soil fertility and natural disasters are having a more dramatic effect on the productivity level of food crop farmers. Continuous use of crude and obsolete farm tools that induce drudgery and reduce productivity and traditional farming methods also resulted in low yield (Amaza et al., 2001).
The loss of most agricultural land to housing estates and hotels have been an enduring policy issues because of concerns that a reduction in domestic capacity to produce food could threaten national security and because of losses of open space and other environmental amenities in rapidly increasing urban areas. In areas where current prices are found to be high are largely a result of capitalized rents from future land development, market intervention may be warranted to prevent losses of agricultural land and its associated public benefits (Andrew et al, 2002).
The pattern of political changes, shift in economy, and an increase in population has resulted in an increase urban area. This pattern of urban expansion affects the valuation of agricultural farmlands and limit the potential of farming area (Saleh et al., 2014).Agriculture has been the principal activity since time immemorial. The issues of land utilization system (i.e. ownership and management of resources and production factors, especially land water, and pasture) have always been a main concern.
Hence the need for this study, as it has the potentials of addressing the major issues of determining the farmland value and productivity of food crop farmers. The farmland value for this study refers to the rental price of the farmland.
1.2 PROBLEM STATEMENT
Over the past years, agriculture has been characterized by productivity increases but until very recently crop prices have been on the rise, hence total returns have not witnessed any significant increase that will explain the sudden rise in farmland value. The returns from lands have depreciated due to unsustainable land practices used by farmers overtime (Osuji, 2017).Unequal distribution of land at different values and insecure land tenure have affected value of farmland and have also had the most profound effect on the livelihood of food crops farmers as a result of their inability to pay for the allotted size of farmland they desired. However, some land tenure system such as land lease cannot be subjected to improvement during utilization and this eventually affects the values of the farmland.
Moreover, the forces of demand and supply of farmland for building and construction are factors affecting the incessant rise in the values of farmlands. Many farmers have lost farmlands due to high rental or purchasing prices of farmland for agricultural activities. Farmland price depends upon the supply offered to the market (Johnson, 2010). The loss of agricultural land could reduce the domestic food production and could threaten national food security in future (Salman et.al., 2016).
Scholars like Okere, (2013) and Ohajianya et al. (2016) among others, have averred that productivity of farmland declines with decline in farmland quality. Cultivation of unsuitable farmland and marginally suitable farmlands by food crop farmers may lead to increase in farm household poverty. If corrective measures are not put in place, this has posed a serious concern to agricultural research scientists and policy makers in addressing the issue of farmland value in Imo State, Nigeria. It may also pose a challenge to the country’s goal of achieving self-sufficiency especially in basic staples (Ohajianya et al., 2016).
Rapid urbanization have led to the loss of cultivated farmland. The continue increase in the construction of the hospitality industries and the establishment of new estates and market places have increasingly affected adversely the value of farmland and the productivity of food crop farmers in Imo State. Many individual farmers who have leased and rented farm lands, and those who have temporary ownership of farmland for food crop production have suffered diverse losses as the owners of these lands have without prior information cleared the land and converted them to hotels and residential buildings. This also possess a threat to agricultural production in the area.
The effort and the need for land planners to consider these farmland value determinants and productivity such as accessibility, rent, and transport improvement, quality of neighborhood, infrastructural facilities, controlling natural disasters and sustainable government regulations will help to put land into optimum utilization and productivity (Olayiwola et al., 2006). In a view to addressing the challenges that lead to the variations in the farmland value and decline in the productivity of food crops, the research tends to answer the following pertinent questions:
1. What are the socio-economic characteristics of the food crop farmers in the study area?
2. What are the methods of land acquisition in the study area?
3. What are the productivity of farmland and its determinants in the study area?
4. What are the productivity of food crop farmers and its determinants in the study area?
5. What is the value of farmland in the area and what factors influence the value of farmland in the study area?
1.3 OBJECTIVES OF STUDY
The board objective of this study was to examine the determinants of farmland value and productivity of food crop farmers in Imo State Nigeria.
The specific objectives were to
(i) examine the socio-economic characteristics of the food crop farmers in the study area,
(ii) examine the methods of land acquisition in the study area,
(iii) determine the productivity of farmland and determinants of productivity of farmland in the study area.
(iv) determine the productivity of food crop farmers and the determinants of productivity of food crop farmers in the study area; and
(v) estimate the value of farm land and the factors influencing the value of farmland in the study area.
1.4 HYPOTHESES
The following hypotheses were tested.
H1: The Farmland value is positively related to farm size, location, soil type, distance, productivity, access to road, community levy, returns and purpose of use and negatively related type of crop and duration of tenancy.
H2: The productivity of food crop farmers is positively related to farm size, farm experience, quantity of fertilizer used, age of the farmer, capital assets, quality of planting materials, type of soil, yield and negatively related to access to credit, household size, age of the farmers, pests and diseases, quantity of agrochemical used.
1.5 JUSTIFICATION FOR THE STUDY
The results of the study are essential in contributing to the existing body of knowledge on rental price of farmland which is yet to be given the necessary attention. Rural farmland which is regarded as home and work place of the farmers should not attract high value, considering the level of their income status. Individuals who wants to make invest in farmland for any agricultural activities should in respect of the result of this study, have enough information that will guide them in such investment.
Land speculators with the information of this study should aware of market value by using the result of this study to analyze and understand the structure of rural farmers before fixing the farmland value in the rural communities. Farmland with high value will definitely discourage farmers who tend to acquire more farmland to increase productivity.
This study is also important for agricultural researchers in understanding the importance of determinants of farmland value and productivity. The result of this research can be used for further research work and could provide policy makers with useful information in the development of land management tools that enhance the need for agricultural land resources and economic growth and provide a basis for compensating land owners.
More so, the study will also help the government to design programs and agricultural interventions to assist the rural farmers in a view to increasing their productivity. This will make farmers food sufficient, increase their returns and increase their income. Farmers will be able to acquire more farmland and produce more food crops for household consumption and also sell to earn more income; the well-being of the farmer will improve.
For those who wants to rent or purchase a farmland for agricultural operations, the information obtained from this research will help them to know what constitute the components of agricultural farmland value. It is important for the farmers or anyone who wants to acquire a farmland should know they can and should be paying for farmland, not only what the market is indicating; therefore, the information of this research will be of help to those farmers.
1.6 LIMITATIONS OF THE STUDY
Several problems were encountered in the design and execution of this. These include:
a) Uncooperative attitude of the respondents: Many of the farmers were not cooperative, they thought that the researcher is a government agent that has come to spy on them, because of that, the farmers were very reluctant to accept the questionnaires as well as giving out detailed information that relates to their production activities, marketing of their produce, finance etc. the researcher resolved this issue by explaining to the farmers that this research is for academic purpose and hence offered them motivations.
b) Lack of standardized units of measurement: This constituted a major source of challenge faced by the researcher. The problem of measuring production variables showed in the accounting of food crop output; the difficulty arose on how to aggregate the output of different crops. This was solved by measuring output in value terms.
c) Poor record keeping by the farmers: Most farmers do not keep proper records of farm activities. Rather they rely on memory recall as the source of record forgetting the shortcomings. Researcher resolved this problem through cost route approach in primary data collection.
d) Problem of land measurement: Most farmer could not say exactly the size of their farmland because they were neither measured in hectares but plots. The researcher resolved this problem by converting plots of land to hectares and gallons to litres.
e) Finance : the researcher faced financial challenges in producing research instruments to cover the farmers in the three agricultural zones as well as travelling to collect the data.
Login To Comment