ABSTRACT
The study compared the effects of crude oil pollution on food-crop production and household welfare in Bayelsa State. Multistage sampling technique was used to select 160 food-crop farmers for the study. Data were collected with structured questionnaire; objectives were analyzed using descriptive statistics, Stochastic Frontier Production Function, Total Factor Productivity (TFP), Chow’s test, and the ordinary least square multiple regression analysis. The results showed that corrosion of oil facilities which accounted for 92% of oil spillages is the major cause of oil pollution in the study area. Results of the production function showed that the generalized log likelihood function was -91.229 and -77.692 and -118.053 for farmers in all categories. This result implies that inefficiency exist in the data set. The value of gamma (γ) was estimated to be 92.8%, 95.2% and 93.5% for the different categories of farmers and highly significant at 1% meaning that 92.8%, 95.2% and 93.5% of random variation in the yield of farmers were due to the farmers inefficiency in their respective sites. Farmers in polluted and non-polluted areas had mean technical efficiencies of 0.57 and 0.53 which means that farmers in polluted areas were more efficient. In polluted areas, the coefficients of age (-1.946), education (-2.157), household size (-2.257) and credit (-2.593), were significant and negatively signed while farm size (2.003), experience (2.327), fertilizer (2.607), and adoption of adaptive strategies (2.899) were significant and positively related to technical efficiency of the farmers. In non-polluted areas, age (-3.926), household size (-5.899) were negative and significant while education (2.065), farm size (2.031), experience (2.162), fertilizer (3.200) and credit (2.432) were significant and positively related to farmers efficiency. Productivity levels for farmers in polluted was 1.5102 and 2.1083 for non-polluted areas which implies that farmers in non-polluted areas were more productive. Results of chow’s test showed that crude oil pollution affects productivity of food-crop farmers negatively. Results on the factors influencing productivity in polluted areas showed that age (-3.745), education (-1.900), household size (-2.497), cost of adaptive strategies (-4.181), credit (-2.362) were significant and negatively related to productivity. Whereas experience, extension contact and farm size were significant and positively signed. In non-polluted areas, age (-2.977), household size (-2.172), and capital inputs (-4.544) were negative and significant, while education, experience and extension contact were positive and significant. Factors influencing farmers welfare showed that education, household income, farm size and value of physical assets were positive and significant while household size, dependency ratio and cost of adaptive strategy were significant and negatively related to welfare of farmers in polluted areas. Some adaptive strategies used by farmers include rent of unaffected lands, use of organic fertilizer/tillage and liming etc. This research therefore concludes that oil pollution had negative effects on crop production and farmers welfare. But, there are still huge potentials for increase in crop production; to achieve this, oil companies are advised to invest heavily in adequate technology, security and manpower. These investments are intended to prevent incessant oil spillages through better and improved ways of doing things.
TABLE OF CONTENTS
Cover
Page
i
Title
Page ii
Declaration iii
Certification iv
Dedication v
Acknowledgements vi
Table
of Contents vii
List
of Tables viii
List
of Figures
ix
Abstract
x
CHAPTER 1: INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of the Research Problem
4
1.3 Objectives of the Study
6
1.4 Research Hypotheses 7
1.4 Justification of the Study
8
CHAPTER 2: LITERATURE REVIEW
2.1 Conceptual Framework
10
2.1.1 The
Origin and discovery of crude oil in Nigeria
10
2.1.2 Crude oil exploration
in Nigeria 11
2.1.4 Pollution
13
2.1.5
Crude oil pollution 14
2.1.6 Productivity
14
2.1.7 Production
function and technical efficiency 15
2.1.8 The concept
of welfare
16
2.2 Causes of Crude oil Pollution
17
2.2.1
Factors that
determine the extent of oil pollution 20
2.3 Crude oil pollution, Issues and
Consequences in the
Niger Delta Region and
Bayelsa State 22
2.4 Impact of Crude oil
Pollution on Crop Production 26
2.5 Impact of Crude oil Pollution on
Household Welfare 28
2.5.1 Socio-economic
impact of oil pollution
30
2.5.2 Oil
royalties, compensations, government strategies and farmers welfare 34
2.6 Theoretical Framework
38
2.7 Review of Related Empirical
Literaures
41
2.7.1 Technical efficiency of
farmers 41
2.7.2 Productivity
of food-crop farmers
43
2.7.3 Household
welfare of food-crop farmers
45
2.8 Analytical Framework
48
2.8.1 Stochastic Frontier Production Function
48
2.8.2 Total Factor Productivity
50
2.8.3 Ordinary Least Squares
Multiple Regression Model 51
CHAPTER 3: METHODOLOGY
3.1 Study
Area 52
3.2
Sampling Procedure 53
3.3
Type and Sources of Data
54
3.4
Techniques of Data Analysis
54
3.5 Model Specification 54
CHAPTER 4: RESULTS AND DISCUSSION
4.1 Socioeconomic
Characteristics of Food-crop Farmers 62
4.2.1 Causes of Crude oil Pollution
72
4.2.2 Common effects of crude
oil pollution on farmlands in Bayelsa State 75
4.2.3 Common effects of crude
oil pollution on crop production in Bayelsa State 78
4.3. Determinants of Output and Technical
Efiiciency of Food-crop Farmers in
Polluted and Non-polluted areas
80
4.3.1 Level of technical
efficiency of famers
84
4.3.2 Determinants of technical
efficiency
87
4.4 Productivity of Food-crop Farmers in
Polluted and Non-polluted areas 92
4.5 Results of Chow-test for Test for Effect
of Oil Pollution on Productivity 100
4.6 Determinants of Welfare
of Food-crop Farmers in Bayelsa State 102
4.7 Adaptive Strategies Adopted
by Farmers in Oil Producing Areas 108
CHAPTER
5: SUMMARY, CONCLUSION AND
RECOMMENDATIONS
5.1
Summary
112
5.2 Conclusion
116
5.3 Recommendations 116
References 119
Appendix
135
LIST
OF TABLES
3.1
List of sampled communities 54
4.1 Distribution of
respondents by sex
62
4.2 Distribution of
respondents by age
63
4.3 Distribution of
respondents by marital status
64
4.4 Distribution
of respondents by household size 64
4.5 Distribution of respondents by level of
education 65
4.6 Distribution of
respondents by years of education 66
4.7
Distribution of respondents by years of farming experience 67
4.8 Distribution of
respondents by extension contact in last production season 68
4.9 Distribution of respondents by
cooperative membership 68
4.10
Distribution of respondents by access to credit
69
4.11
Distribution of respondents by size of holding
70
4.12
Distribution of respondents by source of land acquisition 71
4.3.1
Maximum Likelihood Estimates of output
of food-crop farmers in polluted and non-polluted areas 80
4.3.2 Pooled
Maximum Likelihood Estimates of food-crop farmers in Bayelsa 81
4.3.3 Frequency distribution of farmers by level
of technical efficiency
84
4.3.4 Determinants of
technical efficiency of food- crop farmers in both areas 87
4.3.5 Pooled Maximum Likelihood estimates of the
determinants of technical efficiency of food-crop farmers in Bayelsa State. 88
4.4.1 Level of Productivity of food-crop farmers in Bayelsa State 92
4.4.2 Determinants
of productivity of food-crop farmers in Bayelsa State 94
4.5.1 Chow-test
result for effect of pollution on productivity 100
4.6.1
Welfare determinants of food-crop farmers in
Bayelsa State 103
LIST
OF FIGURES
2.2 Old and exposed pipelines crossing
communities and farmlands in the Niger Delta 18
2.2 Old and exposed pipelines crossing
communities and farmlands in the Niger Delta 18
2.2 Sabotaged
oil facility 20
2.5 Illegal crude oil refineries in Bayelsa State 32
2.5 Illegal crudeoil refineries in Bayelsa
State 32
4.2.1 Pie chart showing causes of crude oil
pollution in Bayelsa State. 72
4.2.2 Bar
chart showing common effects of crude oil pollution on farmlands 75
4.2.3 Bar chart showing common effects of crude oil
pollution on crop production 77
7.1 Pie
chart showing adaptive strategies adopted by farmers in polluted areas 108
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
From 1914 when Nigeria was created by Lord Luggard
until colonialism ended and Nigeria gained her independence in 1960, the
country’s economy was based on agriculture (Ikein, 1990). Agriculture
was most predominant as it contributed to the country’s Gross Domestic Product
(GDP), fed the populace, provided foreign exchange earnings and was also the major
employer of labour. Nigeria was a
producer of cocoa, cotton, groundnut, oil palm, rubber, coffee, kola and other
agricultural products which were exported principally to the west and
represented the country’s major source of external revenue (Olawale et al., 2009).
The growth and export of these
agricultural products increased rapidly decades before the discovery of crude oil
due to reliance on agriculture, use of fairly good inputs/implements, and the
availability of land and labour. This increase was fast depleted due to the
discovery of crude oil which led to severe environmental degradation and
neglect of the sector. Therefore, while agriculture was prominent, oil and gas became
more prominent and as the years went by, agriculture gradually lost its
significant position in the economy while crude oil became the major source of
income and revenue (Tumbo, 2011).
Nigeria became totally reliant on oil and as its
exploration continued in the post-colonial era, the country’s reputation as an
agricultural producer disappeared; since then, crude oil has been Nigeria’s
major foreign exchange earner contributing about 90% of its foreign exchange
earnings (Ugwuanyi et al., 2012). The
wealth from oil exploration therefore became the major determinant of the
growth and path of the Nigerian economy (Ikein1990). Ikein (1990) stated that
there was a gross decline in the agricultural sector, whose contribution to the
GDP fell from around 60% in 1960 to about 21% in 1977 and eventually to less
than 10% in 1978. Food and Agricultural Organisation (FAO, 2016) stated that
Nigeria lost $10 billion in annual export opportunity from groundnut, palm oil,
cocoa and cotton alone due to continuous decline in the production of those
commodities.
Presently,
Nigeria imports majority of her food items, thereby making food and cost of
living very expensive. It is quite interesting to note that despite the fact
that Nigeria is Africa’s leading consumer of rice, one of the largest producers
of rice yet; the country is one of the largest rice importers in the world
(FAO, 2016). Nigeria is also the world’s largest producer of cassava, yam and
cowpea – all staple foods in sub-Saharan Africa; a major producer of fish, yet,
it is a food-deficit nation and imports large amounts of grain, livestock
products and fish (Akpan, 2012). Crop growth is primarily governed by environmental
conditions of soil, climate and weather. The success or failure of farming and
quantitative improvement in crop production is intimately related to the
prevailing weather and soil conditions (Agbato, 2003). In Bayelsa State, agriculture
is the major source of livelihood and it is subsistence-oriented.
Nigeria is
Africa’s largest oil producer and fifth supplier to the United States. The
country has huge oil and gas reserves and ranks as the world's sixth largest
exporter of crude oil (Ugochukwu, 2008). The country is rated among the twelve
biggest oil producers in the Organization of Petroleum Exporting Countries (OPEC),
contributing about 2.5 million barrels per day (bpd) to the OPEC basket
(Ugochukwu, 2008). In 2005, Nigeria had a total of 173 oil blocks in operation and
606 oil fields in the Niger Delta (Central Intelligence Agency World FactBook,
2005). Bayelsa State is
located in the Niger Delta region and contributes 30% of total oil produced in
Nigeria (Omorogbe, 2001). However,
massive oil wealth has not translated into development in the State. Instead,
it has caused large-scale environmental contamination and outright desolation
through dredging, construction of access canals to create paths to
installations, oil spillages, gas flaring, oil well blowouts, improper disposal
of drilling mud, pipeline leakages and vandalization (Ojakorotu and Okeke, 2006).
The
side effects of this intervention on agriculture which includes pollution of
land/water/air, biodiversity loss, unavailability of labour, lack of finance
due to neglect of the sector, have not only relegated crop production to the
background but have also brought poverty, conflicts and underdevelopment in the
area.
Every stage of crude
oil production causes oil spillages which impacts negatively on the
environment. Due to incessant
oil spillages, the Niger Delta of which Bayelsa State is inclusive has been
rated as the most oil-impacted environment and polluted area in the world (Kia,
2009). The region was found to be the second largest flare site in the world,
after Russia (World Bank, 2008). These spillages leading to pollution is a
major factor limiting increased crop production and farmers welfare in Bayelsa
State. Ogon
(2006) stated that the
production of oil and gas by transnational corporations in collaboration with
the Nigerian government has engendered not just neglect but even denied access
of local communities to farmlands and fishing grounds as long stretches of
thriving forest and arable lands are cut open to allow for laying of pipelines
for transportation of crude soil from flow stations and rigs to export
terminals, refineries and reservoirs.
Crop
production in Bayelsa State is hindered by several factors and prominent among
them is land degradation, reduction of labour and neglect of the sector all of
which are occasioned by crude oil exploration activities. Crude oil exploration
cannot be stopped in the light of developmental needs neither will oil pollution
be allowed to continue. It is worthy of note that in spite of crude oil
exploration, agriculture remains the bedrock of the Nigerian economy. This
brings us to answer the question of what should be done to reduce the impact of
oil pollution on crop production and welfare of households. This research is
therefore driven by the need to critically address the extent of damage done by
the oil industry on crop productivity, farmers production efficiency and rural
household welfare with a view to providing solutions that will bring about the
much anticipated increase in food production and improvement in the living
standard of farmers in oil producing communities and the State as a whole.
1.2 STATEMENT OF THE RESEARCH PROBLEM
Before
the discovery of crude oil, the local economy of Bayelsa State was dominated by
farming, fishing, hunting, local gin making and boat building with rudimentary
agricultural technology and techniques used by peasants (Alagoa, 1996). The
people earned their living from exploitation of the resources of land, water
and forests. After the discovery of
oil, most agricultural lands and forests were converted to oil wells, drilling
sites, flow stations, borrow pits, gas terminals, oil pipelines, and
residential areas, and as a result, the major sources of livelihood of the
people were diverted away from agriculture.
The
growth therefore of Nigeria’s oil industry, corruption, oil theft, mismanagement
of oil revenue and the lack of enforcement of environmental laws have brought
about irreparable damages to the environment on which agricultural activities
thrive. People wake up in the morning to see dead fishes on the river banks, plants
are dying, and there are sign posts everywhere from oil companies warning
against drinking water from the streams and from rain, even the air and buildings
are not safe. World Bank (2002) stated that agricultural production worldwide
depends largely on natural resources such as land, water, pasture, fish, forest
and biodiversity. In a situation where these natural resources are depleted and
degraded by crude oil exploration activities, what becomes of agriculture-the
major source of livelihood of the people?
The
damages done by the oil industry are so extensive, oil pollution has destroyed
the life-support system of the people, crops are not growing, fishes are dying,
the water is undrinkable, the air cannot be breathed, the youths are restive as
there are no more lands to farm on and feed from, there is hunger,
malnutrition, poverty, underdevelopment and conflicts everywhere. Even the
farms that are cultivable, there is low output due to high cost of inputs and
lack of labour because the youths are no longer willing and ready to farm. Oil
pollution is therefore seen as a major factor fighting against increased crop
productivity and rural household welfare in oil producing areas (Nkwocha and
Duru, (2010); Ibaba and Olumati, 2009).
Crop
production is a shadow of itself in communities where oil spills are a regular
occurrence. The use of land by the oil sector increases hardship on farmers who
depend on land for survival. Nnabueyi (2012) concluded that in the Niger Delta,
farmlands are destroyed and rivers are polluted leading to death of crops and
fishes and most farmers and fishermen are thrown into confusion and
joblessness. This study has
become very imperative due to the irreparable damages caused by innumerable oil
spills as evidenced in land degradation, low crop productivity, continuous
conflicts and lack of improvements in the welfare of farmers in the State. A
very huge empirical and theoretical gap exists on this subject matter in
Bayelsa state. This research therefore intends to investigate fully and fill
existing gaps on the effects of crude oil pollution on crop productivity, technical
efficiency and the welfare of food-crop farmers in Bayelsa state; with
the aim of proffering recommendations
that can lead to reduction
in oil pollution and land degradation. This would in turn, bring
about the much anticipated increase in crop production activities and improvement in living standard of the
people of Bayelsa State. To achieve this, the following research questions were
addressed.
1.
What
are the socio-economic characteristics of food-crop farmers in Bayelsa State?
2.
What
are the major causes of crude oil pollution and its effects on farmlands and
crop production in Bayelsa State?
3.
What
is the level of technical efficiency of food-crop farmers in polluted and
non-polluted areas?
4.
What
are the levels and determinants of productivity of food-crop farmers in polluted
and non-polluted areas?
5.
Does
crude oil pollution have significant effect on productivity of farmers?
6.
What
are the determinants of welfare of farming households in crude oil polluted and
non-polluted areas?
7.
Are
there adaptive strategies adopted by food-crop farmers to reduce the effects of
oil pollution on productivity?
1.3 OBJECTIVES OF THE STUDY
The overall purpose of this study is to analyze the effects
of crude oil pollution on food crop production and household welfare in Bayelsa
State. The specific objectives were to;
1.
identify the socio-economic
characteristics of food-crop farmers in the study area,
2. identify
the major causes of crude oil pollution and its common effects on farmlands and
crop production activities in the study area,
3. estimate
and compare the production function, level and determinants of technical
efficiency of food-crop farmers in crude oil polluted and non-polluted areas,
4. estimate
and compare the level and determinants of productivity of food-crop farmers in crude
oil polluted and non-polluted areas.
5. ascertain
the effects of crude oil pollution on productivity of food-crop farmers
6. analyze
and compare the determinants of welfare of food-crop farmers in the study area
7. identify
adaptive strategies adopted by farmers to reduce the impact of crude oil
pollution on crop production and household welfare in the study area
1.4 RESEARCH
HYPOTHESES
The following hypotheses were formulated
and tested empirically;
H1 Farmers’
output is positively related to labour, farm size, quantity of fertilizer used, quantity
of seeds planted and negatively related to depreciation
cost.
H2
Farmers’ technical efficiency is positively influenced by the level of education,
volume of fertilizer used, farming experience, extension contacts, adoption of
pollution mitigation strategies, access to credit and negatively influenced by oil
pollution, age of farmers, depreciation, and cost of adaptive strategies.
H3
Farmers’ productivity is positively influenced by the
level of education, age, farm size, extension contacts, household size, farming
experience, volume of fertilizer used and negatively influenced by oil
pollution, labour cost, depreciation and cost of adoption of adaptive strategies.
H4 Oil pollution has no significant effect on
productivity of farmers in polluted areas
H5
Farmers welfare is positively related to education of household head, value of
physical assets, farm size, credit facilities and negatively related to oil
pollution, age of household heads, dependency ratio and cost of adaptive
strategies.
1.5 JUSTIFICATION OF THE STUDY
Throughout
the centuries, crop production has been an important and a major means of
providing food for the population; its relevance in the survival and sustenance
of human race cannot be overemphasized. Land is the foremost important factor
in crop production as farm productivity depends on the quality and quantity of
land area available. Therefore, accessibility of good
agricultural lands is critical to increased farm productivity, efficiency and rural
household welfare. According
to (Inoni,
2006), productivity could be enhanced by availability of good and adequate
agricultural lands.
From
the above assertion, lands ought to be available and properly managed for crop
production to thrive. In
Bayelsa State, lands are not properly managed because in the competition for
land between agriculture and the oil industry, oil industry carries the day due
to the Land use act of 1978. As a result, sustainable land use is left in the
hands of profit driven oil companies and corrupt governments. Results from this
are oil pollution, degradation of land, depletion of natural resources and fall
in agricultural production activities. It needs not be over-emphasized that oil
spills remain a common phenomenon massively polluting farmland and water
sources in the Niger Delta (Aniekan, 2014). A report has it that between 1976 and
2001, 6,817 oil spills occurred with a loss of approximately three million
barrels of oil spilling into the environment. (United Nations Development
Program, 2006). All that oil spilled into the environment destroying farmlands,
forests, biodiversity and water bodies. Yet, more is still spilling.
Crude oil
pollution affects the productivity of land through degradation and deposition
of unwanted substances which reduces soil’s ability to support crop growth. It leads
to low crop yields leading to low farm income and a general decrease in the
living standard of farmers (Onwurah et al.,2008).
Achi (2003) stated that during
oil extraction activities, various harmful and toxic organic compounds are introduced
into the natural environment which leads to changes in the geo-chemical
composition of the soil, river and other components of the environment. This, he
said affects agriculture and leads to a drastic decline in production output in
both farming and fishing activities.
From
the on-going, several issues concerning the rural poor in the oil-rich Bayelsa
State arise; therefore dealing with the resultant effects of oil exploration on
farmlands is central to addressing the issues of low farm productivity, efficiency
and rural household welfare. Findings from this research will enable oil companies
to be properly enlightened with regards to oil pollution and its effects on crop
production and farmers’ welfare. This will help in enhancing their operational
patterns that will result in less-spill and reduced pollution. It will also
help educate individuals on the importance of peaceful co-existence amongst
host communities and companies rather than recourse to violence which has done
great harm to the country at large.
There are existing environmental policies which are
clearly inappropriate. This research will therefore help policy makers and
environmental personnel in
updating such policies and interventions aimed at reducing oil pollution.
Findings from this research will also educate farmers on several adaptive
strategies they could adopt to reduce the impact of oil pollution on
productivity and efficiency and welfare.
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