ABSTRACT
The study analyzed
agribusiness households’ meat demand, consumption and poverty status in South
East Nigeria. Multi-stage and simple
random techniques were employed to select 255 respondents.
Primary data were collected with the use of a well-structured questionnaire
through the aid of enumerators. Frequencies, percentages, means, standard
deviation, correlation, LA/AIDS model, ordinary least square, multinomial logit
and probit regression models were used for data analysis. The findings showed that beef (38.11%) was most preferred meat type, as taste of the
meat (28%), price (23.11%) and their income level (16%) as major reasons for
their choice. The
‘Z’ (3.566)
result showed that there was a statistically significant difference in per
capita expenditure between the urban and rural agribusiness
households.
Ordinary Least Square
regression analysis on factors
influencing demand for beef, pork, chevron and chicken, revealed income, price of beef, age, household size and years spent in school as factors influencing
demand for beef; also income, household size, age
of household head, years spent
in school and total expenditure on food were factors influencing demand for pork; household head,
livestock farming and total expenditure on food were factors influencing demand for chevron while income, price of substitute, livestock farming, total expenditure on food were factors influencing demand for chicken
in the study area. Almost
Ideal Demand System (AIDS) Model revealed that the
percentage change in
prices of beef, chevon and
chicken resulted to -0.8036, -0.5036 and - 0.6976
reduction in the quantity demanded
respectively. Furthermore, coefficient of household size,
income and age were significant variables influencing household preference/
choice for beef, pork, chevon and chicken in south East Nigeria. Result further
showed that about 36% of the agribusiness
household
were considered being core poor. Furthermore,
probit regression model shows that marital status, level of Education, value of output and access to credit were the
significant variables influencing poverty status of agribusiness household in the area. It is therefore recommended that there should also be policy measures that
will ensure increase in purchasing power of the agribusiness household heads which will invariably
contribute positively to the improvement of nutritional and welfare status of
the agribusiness households in
South East Nigeria.
TABLE
OF CONTENTS
Title Page i
Declaration ii
Certification iii
Dedication iv
Acknowledgements v
Table of Contents vii
List of Tables xi
Lists of Figure xii
Abstract xiii
CHAPTER 1: INTRODUCTION 1
1.1 Background Information 1
1.2 Problem Statement 5
1.3 Objectives of the Study 8
1.4 Hypotheses
of the Study 8
1.5 Justification of the Study 9
CHAPTER 2: LITERATURE REVIEW 11
2.1 Conceptual Literature 11
2.1.1 Demand and related concepts 11
2.1.1.1 Concept of elasticity
of demand 13
2.1.1.2
Demand function 15
2.1.2 Trends
in food demand: under consumption and overconsumption 16
2.1.3 Factors
affecting demand and consumption. 18
2.1.3.1 Factors affecting demand 18
2.1.3.2 Factors influencing consumption 20
2.1.4 Livestock production, meat quality and
consumer preference 25
2.1.5. Concept of poverty 28
2.1.5.1 The poverty profile 29
2.1.5.2 Determinants of poverty 30
2.1.5.3 Poverty alleviation:
concept and strategies 31
2.1.5.4 Appraisal of the
poverty alleviation programs (1999 – 2018) 33
2.2 Theoretical
Framework 39
2.2.1 Vicious
circle of poverty and the unbalanced growth theories 39
2.2.2 Theoretical framework on demand 39
2.3 Review
of Empirical Studies 45
2.3.1 Review of empirical studies on demand 45
2.3.2 Review
of empirical studies on poverty 57
2.4 Analytical
Framework 62
2.4.1 Comparison of the
mean variation between two population samples 62
2.4.2 Regression
analysis 62
2.4.3
Almost ideal demand system (AIDS) model
65
2.4.4 Linear
approximate almost ideal demand system (LA/AIDS) model 66
2.4.5
Poverty
line, poverty incidence (Head Count Ratio) and poverty gap 70
2.4.6 Construction of the poverty line 71
2.4.7 Modeling binary response 72
2.4.7.1
Logit model 73
2.4.8 Multinomial
logit regression 74
2.4.9 Correlation coefficient. 75
CHAPTER 3: METHODOLOGY 76
3.1 Study Area 76
3.2 Data Collection and Sampling Techniques 77
3.3 Method of data analysis and model specification 78
3.3.1 Own price elasticity(εii) 83
3.3.2 Compensated cross-price elasticity (εj) 83
3.3.3 Expenditure elasticity (ηi) 84
3.3.4 Correlation coefficient 87
CHAPTER 4: RESULTS AND DISCUSSION 89
4.1 Agribusiness Households Socioeconomic Characteristics 91
4.1.1 Sex of the respondents 91
4.1.2 Age of the respondents 91
4.1.3 Marital status of the respondents 91
4.1.4 Household size of the respondents 92
4.1.5 Educational level of the respondents 92
4.1.6 Primary occupation of respondents 93
4.1.7 Experience in Agribusiness 93
4.2 Sources of Meat Consumed and Preferences 94
4.3 Per Capita Expenditure on Meat Among the Consumers 95
4.4 Demand
for Beef, Pork, Chevon and Chicken 97
4.4.1 Determinants
of demand for beef 97
4.4.2 Determinants
of demand for pork 100
4.4.3 Determinants
of demand for chevon 103
4.4.4 Determinants
of demand for chicken 105
4.5 Own
Price, Cross Price and Expenditure Elasticity for Beef, Pork, Chevon
and
Chicken 107
4.5.1 Test
of homogeneity 107
4.5.2 Own price, cross price and expenditure elasticity
for meat in Southeast,
Nigeria 107
4.6 Factors
Influencing Household Preference/ Choice for Beef, Pork, Chevon
and Chicken 112
4.6.1 Household
size 112
4.6.2 Income 112
4.6.3 Age 112
4.7 Poverty Level and Relationship
Between Poverty (Poverty Line, Incidence,
Depth
and Severity) and
Meat Demand/Consumption. 113
4.7.1 Estimation of poverty line 113
4.7.2 Poverty status 114
4.7.3 Incidence, depth and severity of poverty in
the study area 115
4.7.4 Relationship between poverty and meat
demand/consumption 116
4.8 Determinants of Poverty Status
of Agribusiness Households 118
CHAPTER 5:
SUMMARY,
CONCLUSION AND RECOMMENDATIONS 118
5.1 Summary 118
5.2 Conclusion 120
5.3 Recommendations 121
References
LIST OF TABLES
4.1: Distribution
of respondents according to socio-economic profile 90
4.2a: Types of
meat consumed 94
4.2b: Factor responsible for consumers
preference 94
4.3a: Maximum, minimum, mean & standard deviation of mean per
capita
expenditure on meat 95
4.3b: Results to compare
the amount per capita expenditure on meat
demand among agribusiness household. 96
4.4: Multiple regression result on demand
function for beef in the study
area 97
4.5: Multiple regression result on demand
function for pork
100
4.6: Multiple regression result of the
determinants of demand for chevon 103
4.7: Multiple regression result of the
determinants of demand for chicken 105
4.8: Test of homogeneity 108
4.9: Own price, cross price and expenditure elasticity for meat in
southwest,
Nigeria 109
4.10: Results
of the MNL model on factors affecting household
preference
for meat. 111
4.11: Mean
per capita monthly expenditure of agribusiness households 113
4.12: Estimated
poverty line 114
4.13: Poverty
status of the respondents 115
4.14: Poverty
incidence, depth and severity of the respondents 116
4.15: Correlation estimate of the relationship
between poverty and meat
demand 117
4.16: Estimated
determinants of poverty status of the agribusiness
households
115
LIST OF FIGURE
1:
Map of South East, Nigeria. 77
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND INFORMATION
Global demand for dietary animal protein
is rapidly increasing, largely due to increased prosperity and urban population
growth in developing and transition economies. Demand has been described as the quantity of goods
which a consumer is willing and able to buy at a given price at a particular
period of time. World demand for meat has risen sharply during the last few
decades. The key reasons for these increases in meat demand are increasing
population, improving technology and increasing incomes (Teklebrhan, 2012). However, despite this
overall improvement in technologies and incomes, per capita consumption of meat
has lagged especially in the less-developed countries of the world because
protein is the most costly food item (Osho and Asghar, 2004). A number of
factors combine to shape consumers
demand, including traditional economic determinants such as relative prices and
consumer income, as well as non-traditional determinants such as nutrition,
diet, food safety information etc.
Meat
is generally defined as the skeletal
muscle from animals, including the connective tissues and fat that are
naturally associated with the muscle (Jeremiah, 1978) and may also include all
the edible parts of animal (Gambo, et al,
2010). Obi (2000) observed that meat demand is generally low in most African
countries at a level of 25kg and even lower
in Nigeria especially in the South-Eastern region where production of
animal protein has not been high enough to meet the demand of the rapidly
growing population. Ademosun (2000) in his contribution puts Nigerian’s total
meat production at 810,000 tonnes for a population of about 110million
resulting in a meat production index of 22g per caput per day. Regmi (2007)
observed that there has been an unprecedented population growth in the last
half of the century in the developing countries including Nigeria which has
created an additional demand for meat and food.
Prior
to the 1970’s oil boom, agriculture was the main stay of the Nigerian economy
with the livestock sub sector contributing significantly to the country’s
exports. At this time the agricultural market of the country was well
developed; however, with the advent/discovery of oil in commercial quantity in
the 1970’s, the country began to witness a decline in agricultural production
especially in the livestock and meat sub-sector (Adetunji and Rauf, 2012). The global food crisis
affects roughlty 2
billion people in the world, of which currently 850 million people face extreme
hunger and 25,000 people die each day from starvation. Of the 37 most affected
countries, 21 are in Africa. More than 95% of chronically undernourished people
live in developing countries.
According
to FAO (2016), food consumption in kcal/person/day in Nigeria increased from
2370 in 2008-2010 to 2560 in 2011-2013 and finally 2600 in 2014-2016, with
percentage of undernourished population decreasing from 15%, in 1990-1992 to
10% in 2008-2010 and finally to 9 percent in 2013-2015. In absolute terms,
though there was a decrease in undernourished population in Nigeria from 14.7
million in 2011-2013 to 10.8 million in 2014-2016. Also, according to Olarinde
and Kuponiyi (2015), households ‘consumption
of carbohydrate/starchy food is significantly higher (N3, 465.13) than of
protein and vitamins (N750.54 and N191.43) respectively per household.
Despite
years of commitments in agricultural research and development with evidences of
achievements, hunger and poverty continue to confound the countries in the
region (Damisa et al., 2011). Nigeria is one of the most
resource-endowed nations in the world. But socio-economically, Nigerians are
also among the poorest in the world (Etim et al., 2009). Hence, there is
a persisting paradox of a rich country inhabited by poor people, which has been
the subject of great concern for many years, but more especially in the last
decade (Etim and Patrick, 2010).
In
Nigeria, meat and animal products as well as fish are the fourth most commonly
consumed food group (88.9%) by households. The first, second and third are
grains and flours (97.2%), oils and fat (96.8%) and vegetables (96.7%)
respectively. However, the average
weekly household expenditure on
meat is highest (N1,359 per week) compared to the
other food groups (National Bureau of Statistics, 2006) and most households
could not afford this
average expenditure due to their poverty status.
Poverty
prevalence is one of the largest challenges of mankind in the 21st century
(Abimbola et al., 2011). However, this problem is hard to define and as
such many different meanings and definitions are resorted to in the development
field (Klugman, 2002). Poverty is
defined as the inability to attain a minimal
standard of living, measured in terms of basic consumption needs or the income
required to satisfy them. This definition considers poverty in absolute terms. Absolute
poverty occurs when human beings live in a state of deprivation due to meagre
income or lack of access to basic human needs which include food, shelter,
health, education, safe drinking water etc. (Draman, 2003). To measure poverty
in absolute terms, a poverty line has to be established. Poverty lines are
assumed to be a measure of household well-being; it shows the per-capita minimum
monetary requirements an individual needs to afford the purchase of basic goods
and services (Odeyemi and Olamide, 2013).
Vast
majority of Nigerian farmers are small-scale farmers who cultivate less than 5
hectares of land. This class of farmers has an important role to play in
combating poverty and creating widespread growth in developing countries. This
is because they constitute more than 70% of the Nation’s working population.
Poverty in Nigeria is said to be mainly a rural phenomenon where up to 80% of
the population live below the poverty line (National Bureau of Statistic, NBS,
2013). For many households in Nigeria, especially in the rural areas,
agriculture is their primary source of livelihood. Therefore, reducing poverty
among the small scale farmers will improve the well-being of a vast majority of
the Nigerian poor. The most compelling evidence of successful agriculture-led
poverty reduction comes from the Green Revolution in Asia. Under the scheme,
poverty in the region declined from 50% in the 1970s to 18% in 2004, while
hunger declined from 30% to 16% over the same period.
Over
the years, most development agencies and governments at every tier in the
country were able to initiate a lot of developmental programmes and projects to
reduce poverty and enhance the quality of life of its citizens, especially
those in the rural
areas. However, despite the proliferation of such antipoverty initiatives, the
number of poor people in Nigeria has continued to be on the increase. For any
antipoverty initiative to have significant impact on its target, it must take
place in sectors where majority of the poor earn their livelihood (Odeyemi and Olamide,
2013). Similarly, all stakeholders must understand its principal underlying
causes. Such an understanding is required to responsibly design and implement
relevant, beneficial interventions that enable people to pursue meaningful and
rewarding lives and livelihoods, and thus reduce poverty in a given region
(International Fund for Agricultural Development, IFAD, 2014). In fact,
response to poverty should vary from one community to another, and between
social groups within the given communities in relation to the prevailing
socio-political conditions (Mung’ong’o and Mwamfupe, 2003).
Specifically, Nigerians
are also among the poorest in the World (Etim et al. 2009); despite the Nigerian Government efforts at poverty
reduction and the fact that it is one of the most resource – endowed nations of
the world, but, socio economically, the Human Development Index report for 2013
ranked Nigeria as the 153rd poorest out of the 186 poorest countries
in the world (UNDP 2013). This situation however, presents a persisting paradox
of a rich country inhabited by poor people. In view of these, there is a need for a
research that will study meat demand, consumption and poverty status of
agribusiness households in South East Nigeria so that agribusiness households can deploy their resources to those meat types that earn them
more income and improve their livelihood.
1.2 PROBLEM
STATEMENT
Household demand for meat products such as
chicken and pork are faced with problems which is mostly due to market prices,
consumers taste, credit availability and consumers wealth. This problem leads
to unbalanced
diet because meat contributes essential nutrients to human diet Aromolaran
(2002) and the consequence of this poor nutritional status is infection which
will eventually result in weakness, lethargy, absenteeism, poor productivity
and stress (Jamison and Leslie 2001).
Increases
in agricultural production has not matched the country’s population growth rate. In
Nigeria, a good number
of people still face pervasive poverty, gross inequalities, joblessness,
environmental degradation, disease and deprivation (FAO, 2011). While food production
increases at the rate of 2.5%, food demand increases at a rate of more than
3.5% (FAO.
2016). In addition to poor food supply,
Nigeria’s agriculture failed to supply adequate animal protein in the diets of
a large proportion of the populace (FMEDR, 2000; Ojo, 2003), this is as a
result of the poverty
situation of most households in Nigeria, which is
quite disturbing. Both the quantitative and qualitative measurements attest to
the growing incidence and depth of poverty in the country (Federal Office of
Statistics (FOS), 1999). This situation however, presents a paradox considering
the vast human and physical resources that the country is endowed with. It is
even more disturbing that despite the huge human and material resources that
have been devoted to poverty reduction by successive governments, no noticeable
success has been achieved in this direction (FOS, 1999).
In Nigeria, majority of the people are food insecure because of
high prevailing poverty level and poor performance of the agricultural system.
Thus, majority of Nigerians are poor, lack physical, social and economic access
to sufficient, safe and nutritious food to meet their dietary needs. The
isolation of the process underlying chronic and transitory poverty is
considered essential in understanding the extent to which each poverty type may
obscure the other or even distort the effects of government anti-poverty
programmes. In Nigeria,
rural poverty are relatively high. A national poverty survey carried out
indicates that the high tropic areas have moderate poverty while the northern
regions have poverty levels that are as high as 60% (NBS, 2010). The average
national poverty incidence indicates that this situation has not improved
during the last 20 years in a majority of sub-Saharan African countries, inclusive
(World Bank, 2008; Apata et al., 2010).
The problem of poverty has, for a
fairly long time, been a cause of concern to the government (Nwaobi, 2003). As
a result, the government’s efforts at combating the menace actually started
immediately after the attainment of independence in 1960 (Ovwasa, 2000;
Omotola, 2008). Nwaobi (2003) observed that the initial attention was focused
on rural development and country planning as a practical means of dealing with
the problem. Furthermore Rural poverty in Nigeria increased from 28.3% in 1980
to 69% in 2010; and 44.4% of these rural poor could not meet their food
expenses (Bolarin, 2010, Ogwumike and Akinnibosun, 2013). Per capital income in Nigeria has
reduced from US $698 (₦104,700) in 1980 to $290 (₦43,500) in 2003. The nation has
dropped in human development index, it was ranked 129
in 1990 and this dropped to 159 in 2003 out of 177 countries (Etim and Edet,
2009, World Bank, 2007). And this is an indication of poverty and its
consequences. Despite Nigeria’s abundant agricultural resources, poverty is
widely spread in the country. About 70 per cent of Nigerians live on less than
US$1.25 a day. Poverty is especially severe in the rural areas where up to
80% of the population lives below the poverty line and social services and
infrastructure are limited, in spite of the fact that the bulk of agricultural
production takes place there.
There
is inadequate information
on the extent
of demand of
meat in the
area of study. Literature reveals
that decision-making about
food demand and choice
are not confined to
demographic and socio-economic factors
only. Riet et
al. (2011) reveals that
knowledge from psychology,
dietetic and nutritional
disciplines is equally
important in shaping consumer’s
food demand. Chadwick
et al. (2013)
argues that eating
habits are partly a
reflection of cultural
and societal factors
that are reinforced
through social interactions, community
taboos and tastes
and preferences. From the
foregoing, the following research questions will be raised
i.
What are the sources of
meat in the area for
agribusiness households?
ii.
What is the amount per
capita expenditure on meat among the respondents?
iii.
What
are the factors affecting meat demand?
iv.
What is the own price,
cross price and expenditure elasticity for beef, pork, chevon and chicken in
the study area?
v.
What are the factors
influencing agribusiness
household preference/ choice for beef, pork, chevon and chicken in South East Nigeria?
vi.
What is the relationship
between poverty (poverty line, incidence, depth and severity), meat demand and
consumption in the area.
vii.
What are the determinants of poverty status of agribusiness households.
1.3 OBJECTIVES OF THE STUDY
The broad objective of this study is
to examine the
meat demand,
consumption and poverty status among
urban and Rural households’ in South East Nigeria while
the specific objectives include to:
i.
examine the agribusiness households
socioeconomic characteristics;
ii.
classify meat consumers
according to types
of meat consumed and preferences;
iii.
estimate the demand for
meat – beef, pork, chevon and chicken in the study area;
iv.
assess
the per capita expenditure on meat among the consumers;
v.
estimate the own price,
cross price and income elasticity of demand for beef, pork, chevon and chicken in
the study area.
vi.
estimate the factors
influencing household preference/ choice for beef, pork, chevon and chicken in South
East Nigeria.
vii.
estimate the household’s poverty level and
relationship between poverty,
meat demand and consumption in the area.
viii.
estimate the determinants of poverty staus of the households in the study
area.
1.4 HYPOTHESES OF THE STUDY
The
following hypothesis were tested:
1. Own
price, cross price and
income elasticities
of demand for beef, pork, chevon and chicken is equal to zero.
2. Price of the meat product, household size, educational
level, price of close substitute (price of other meat types), age
of respondents,
livestock farming and total expenditure on food are negatively related to meat demand.
3. There is no significant relationship between poverty and meat demand/consumption in the area.
1.5 JUSTIFICATION OF THE STUDY
There
are controversies concerning the determinants of poverty among small scale
farmers; there have been few empirical studies on the dynamics of poverty in Nigeria
(Onu and Abayomi, 2016); Akerele
and Adewuyi (2011) were concerned with the incidence, depth and severity of
poverty in Ekiti state of Nigeria, Onu and Abayomi (2009) concentrated on
poverty among households living in Yola metropolis of Adamawa state of Nigeria,
The paper is motivated by the fact that relatively few works have been done at
the comparative level and in the knowledge of the researcher no such empirical
work on the study area exist in the literature. The paper fills in the
literature gap.
Moreover, the study is justified
because its findings and recommendations will benefit the following
stakeholders: researchers, policy makers, agribusiness enterprenuers,
Non-Governmental Organizations (NGOs) and extension agents. To the researchers,
it will serve as a reference point. They will benefit from the wealth of
knowledge emanating from this study and this will streghten further studies.
To the policy makers, it will serve
as a guide in formulating polices that will enhance poverty reduction. To the agribusiness households,
the study will reveal their poverty situation and consequently attract
development interventions to them. To the NGOs, the study will encourage them
to channel more aids, develop more effective development interventions and
special projects for agribusiness
households. The study will also contribute in the
design of anti-poverty initiatives and programmes in the South-Eastern states
where majority of the population remain poor (World Bank, 2013).
Despite these measures, the incidence
of poverty especially amongst the
agribusiness households seem not to have slowed
down. This then suggests that inorder to have a better understanding of meat demand/consumption and poverty
status amongst
the agribusiness households, there is a need to gain a further knowledge about their characteristics,
poverty level and status, which gave credence to this work in ascertaining the
current meat
demand/consumption and poverty situation amongst
the agribusiness
households in South Eastern Nigeria.
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