Abstract:
This study is a comparative analysis of the production efficiency of
insured and un-insured small-scale farms in Edo and Delta States. The
study covered six local government areas randomly selected from each of
the two States. Primary and secondary data were used for the analysis.
While the secondary data were obtained from the Agricultural
Development Projects (ADPs), Ministry of Agriculture and the State
office of the Nigerian Agricultural Insurance Corporation (NAIC) in each
of the two States, the primary data were obtained through the use of a
questionnaire, copies of which were administered on two categories of
small-scale farmers in the two states; namely: participants in the
agricultural insurance scheme (who operated the insured farms) and nonparticipants
(who operated the un-insured farms), all of whom were crop
farmers. Three analytical approaches were adopted in the study. They
were descriptive statistics, production function analysis and the
estimation of costs and returns using gross margin analysis. Three (3)
hypotheses were tested at the 0.05 and/ or 0.01 levels of significance.
Results of the production function analyses and production elasticities
indicate that land and labour were over-utilized, while planting materials
were under-util ized by both categories of farmers in both states. Results
from the gross margin analyses indicate that Delta State farmers had
higher and significant returns (at the 95 per cent confidence limit) per respondent and per hectare basis, both for the insured farms operators and
un-insured farms categories, than their Edo State counterparts. However,
the variable costs items were not significantly different from each other at
the 95 per cent confidence limit. The expenditure profiles of the farmers
(insured farms operators and un-insured farms operators) indicate that
capital items accounted for less than 4 per cent of total cost of production ..
The major recommendations emanating from the study include, among
others, the need to strengthen agricultural information apparatus to
effectively motivate the farmers to voluntarily enter into insurance
contract/policy, the need for corporate organizations/multi-national
companies to have keen interest in the food security of the nation to
enhance their profitability by engaging in farm input supplies, provision
of insurance cover to farms and farming households, as part of their
social responsibility to society; and the need for the Nigerian Agricultural
Insurance Corporation to effectively monitor all participants loans.
