EFFECT OF OIL PALM PROCESSING ON SOCIO ECONOMIC GROWTH OF FARMERS

ABSTRACT

The study was conducted to examine the Effect of oil palm processing on socio economic growth of farmers in Kogi State of Nigeria. The objectives of the study are to: determine the factors affecting resource use efficiency by Oil Palm Producers in the study area and determine the optimum replacement age of oil palm. The tools of analysis used are:- simple descriptive statistics, multiple regression analysis, optimum replacement model and gross margin analysis. From the estimate of oil palm in the state,40,30,20 and 30 oil palm farmers were proportionally and purposively sampled from the four (4) Agricultural Zones, A,B,C and D with their headquarters at Ayetoro-Gbede, Anyigba, Koton-Karfe and Alloma respectively, to give a sample size of 120 oil palm producers. The oil palm producers were interviewed with structured questionnaire to obtain information on oil palm production. Data for optimum replacement age were obtained from NIFOR oil palm plantation, Acharu substation. The data collected were analysed using the tools of analysis as specified. The  t-values and F-statistics are significant up to 5 percent level of significance. The oil palm currently on the fields were planted over 26 years ago, most of which are over 45 years, already having impaired productivity. The gross margin analysis shows a margin of N2,046,844.00. The benefit-cost analysis shows a ratio of 1:1.56, indicating that one naira invested in oil palm processing will yield N1.56. The production has not been able to keep pace with consumption demand, hence Nigeria has to import palm oil to fill the deficit gap. The highest output recorded in research station was 13.50tonnes of fresh fruit bunch (ffb) per hectare. The study shows that optimum replacement age of oil palm is 35 years for the production to enjoy a flow of output. The major constraint being lack of good policy direction and inadequate financial support and other incentives to boost oil palm produce economy. It is recommended that there should be conscious desire to implement research findings. The need to commission agency(ies) to undertake the establishment of oil palm farms by government and after tending it to certain age shall hand them over to private individuals on charge is imperative. There is a need for credit policy to offer credit assistance to oil palm producers. Oil palm producers should be encouraged to cut down their oil palm at the age of 35 years.

CHAPTER ONE

1.0          INTRODUCTION

1.1          Background Information

Oil palm is a monocotyledonous tree belonging to the family, palmae and the subfamily, cocoideae. The normal (diploid) chromosome number is 2n = 32. The adult plant possesses an impressive crown of 30 to 45 green leaves, each 5-9m long at the top of a trunk bearing old leaf bases arranged spirally, (Kochhar, 1976; Opeke, 1992; CTA, 2000). The stem may be 30 to 38cm in diameter, with progressive thickening towards the base. On older palms, the stem is punctuated with conspicuous and regularly arranged leaf scars and the stem terminates in a handsome growth of leaves (fronds). The palm leaf is compound and is known as the frond. The leaf is paripinnate with a prominent petiole (0.9 to 1.5m long). The petiole often broadens at the base to form a clasper round the stem. Each palm frond bears, 20 to over 150 pairs of leaflets arranged in more or less two rows along each side of the flattened rachis with the longest pinnate varying up to 120 cm. The pinnae are parallel-veined.

The plant is monoecious with separate male and female flowers (inflorescences) on the same plant. Cross-fertilization is achieved through successive cycles of male and female flower production. It produces bunches of fleshy fruits, the pulp (mesocarp) of which yields a solid, edible, orange-red oil called palm oil. The endosperm or kernel yields a clear, yellowish oil, that is also edible and solid, and is called palm kernel oil. These two products are important in world trade.

Oil palm adapts well to most textures from medium loams to clays. Extremely coarse or fine textures may not always be suitable, especially if they affect water supply to the roots. The climatic and soil requirements constitute the physical factors that are responsible for the growth of oil palm. They include availability of water supply, soil conditions in terms of fertility and topography that is suitable for the growth of oil palm. It is recommended that rainfall of 1600mm to 5000mm per year evenly distributed will enhance the growth of oil palm, (Keu, 2001; Khera, 1976). The oil palm has a wide adaptability range of soils to low pH but sensitive to high pH (above 7.5) and stagnant water. Neutral pH soils are most favoured.

The temperature requirement varies between 180C and 340C. Opeke (1992), observed that oil palm would tolerate even higher temperature provided there is adequate moisture. It requires plenty of sunshine; productivity is reduced in areas with excessive sky overcast. It thrives under conditions of high relative humidity; yields are adversely influenced when the crop is exposed to dry harmattan winds (CTA, 2000).SOCIO ECONOMIC GROWTH

Oil palm is a lowland crop although it can grow well up to altitude of 900m. It has fibrous root system and benefits from deep soils which are fertile, free from iron deposits and well-drained. SOCIO ECONOMIC GROWTH

Oil palm is affected by pests and diseases attack. The pests and diseases attack both seedlings in the nursery and mature plants on the field. Some notable pests of oil palm are snails, crickets and mammals especially rodents (rats and mice). Others include leaf-minners, weevils, caterpillars, birds and squirrels. The oil palm diseases include Anthracnose, Freckle, Blast, Ganoderma trunk rot, Vascular wilt disease, Basal rot and crown diseases. These pests and diseases pose serious problems to the production of oil palm. They attack the plants at various stages of growth and development (Uguru, 1996; CTA, 1998). SOCIO ECONOMIC GROWTH

In the 1950s and 1960s, Kogi State was a major producer and exporter of palm oil and palm kernels  (about 12,000 tons or 2.40% of national palm kernel output)(Idachaba, 2005). At that time, he noted, there were pyramids of palm kernels in John Holt Warehouses at Idah. Also, there was annual loading of palm kernels at Idah River port for export through Delta Inland port of Burutu to Europe. Until after the First World War, palm oil and kernels were supplied entirely from groves of Africa and to a much lesser degree of Brazil. It was not until after the Second World War that the West African groves were studied with thoroughness. OIL PALM PROCESSING

Hartley (1988), postulated that in areas where the palm was already part of the natural vegetation, the factors of greatest importance in the development of a grove was the growth of a dense population. The cutting down of forest areas for annual crop cultivation removed dense shade and created conditions suitable for rapid establishment of the palm.

Because of economic importance of oil palm as high yielding source of edible and technical oils, the oil palm is now grown as a plantation in most countries with high rainfall (minimum 1600mm/year) in tropical climates within 100 north and south of equator, (USDA, 2000). Raymond (1961); McCall (2003), compared the potential oil yield from various crops and placed the oil palm at the head of the list. OIL PALM PROCESSING

The extensive development of oil palm industries in many countries in the tropics has been motivated by its extremely high potential productivity. The oil palm gives the highest yield of oil per unit area compared to any other oil crop and produces two distinct oils – palm oil and palm kernel oil – both of which are important in World Trade, (USDA, 2000). Oil palm seems to be part of the traditional agriculture of Kogi State. The climatic condition and soil type of Kogi State appear favourable for the growth of oil palm. The production and development is in the hands of small-scale holders. They have all been dependent on rainfed cultivation and a large proportion of the palm produced are on wild groves. Apart from the wild groves, three economically important varieties are grown in the study area. These are the Dura, the Pisifera and the Tenera. The Tenera is a cross between Dura and Pisifera (Nigerian Institute for Oil Palm Research, NIFOR, 1985).OIL PALM PROCESSING