ECONOMICS OF CATFISH (Clarias gariepinus) PRODUCTION IN BAYELSA STATE, NIGERIA

ABSTRACT

The study investigated the economics of catfish (Clarias gariepinus) production in Bayelsa State, Nigeria. The broad objective of the study was to examine the economics of Catfish production in Bayelsa State, Nigeria. The specific objectives were to: (i) describe the socio-economic characteristics of catfish farming; (ii) determine the technical efficiency of catfish farming; (iii) identify factors that influence technical efficiency of catfish farming; (iv) analyze the costs and returns associated with catfish farming; and (v) examine the problems associated with catfish farming. A multi-stage sampling technique was used to select three (3) Local Government Areas (Yenagoa, Ogbia and Kolokuma-Opokuma) purposively based on their predominance in commercial catfish farming and randomly five (5) communities each from the 3 LGAs. Furthermore nine (9) catfish farmers in each community were randomly selected making a total number of one hundred and thirty five (135) catfish farmers. One hundred and twenty (120) copies questionnaires were retrieved out of one hundred and thirty five (135) copies and used for the analysis. Structured questionnaire was used to elicit the required information from the selected respondents. The result indicates that 75.0% of the respondents fall between age ranged of 31-50 with the mean age of 42 years. Majority of the catfish farmers were married (79.2%), males (83.3%) dominated catfish production in the study area, 91.7% had family size of 1-10 people in their households with the mean of 7 people, 92.5% had one form of education or the other. The result further shows that 87.5% had 1-10 years of farming experience, 83.3% were part-time farmers, 43.4% had farm size of 1-1.5 hectares, 66.7% used family labour while 58.3% had one month contact with extension agent. Feeds, capital, labour and pond size have significant relationship with catfish production at various probability levels. The mean technical efficiency was 0.92 with minimum and maximum efficiencies of 0.68 and 0.99. The inefficiency model revealed that farming experience, sex, pond type and number of ponds were the variables that increased the technical efficiency of the respondents. Total Fixed Cost (TFC) was ₦881,500.00 while Total Variable Cost (TVC) was ₦3,956,025.01with Net Farm Income (NFI) of ₦3,113,183.32 during production period of six months. Return on investment was ₦0.64 which implies profitability of catfish production in the study area. The study also identified high cost of feed, inadequate finance, inadequate seed supply, lack of land, lack of organized market, high cost of transportation, lack of modern technologies, and high cost of labour were the major problems faced by catfish farmers. It is therefore recommended that farmers need for government and non –government support in terms of improves feed research that will help to reduce the cost of catfish feeds without reducing the efficacy of the feeds.Furthermore, there is need to be given proper orientation and/or basic training in major farm management techniques most especially participation in programmes that address efficient allocation of production resources. This will help increase their level of profitability, hence, be more efficient.

TABLE OF CONTENTS

Pages

Title page                                                                                                 i

Certification                                                                                  ii

Dedication                                                                                                           iii

Acknowledgement                                                                                            iv

Abstract                                                                                                      vi

Table of content                                                                                                 vii

List of table                                                                                          x

List of figure                                                                                                   xi

CHAPTER ONE: INTRODUCTION

1. Background of the study                                                    1

1.2       Problem of the statement                                           4

1.3       Objectives of the study                                                  6

1.4       Hypotheses of the study                                        6

1. Justification of the study                                    6

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1       Concept of fish farming                                                8

2.2       General background of Nigerian fisheries                                9

•       Productive efficiencies and their determinants                       12

2.4       Efficiency                                                                                                    14

2.4.1    Technical efficiency                                                                15

2.4.2    Profit efficiency                                                   15

2.4.3    Cost efficiency                                                                       16

2.5       Production system of catfish in Nigeria                                                 17

2.5.1    Pond construction methods                                           17

2.6       The production cycle of catfish                                          20

2.6.1   Seed supply, hatchery production and nursery                   20

2.6.2    Feed supply                                                                        21

2.6.3    Harvesting techniques                                              22

2.6.4    Handling and processing                                                     23

2.6.5    Markets                                                                                            23

2.6.6    Production costs                                                 24

2.6.7    Diseases and control measures                                   24

2.6.8    Basic fish disease treatment                                                         25

2.7       Role of fisheries in national economy                                 26

2.8       Economic importance of fish                                                 26

2.9       Problems of fish farming                                        29

2.10     Prospect of fish farming                                       30

2.11     Theoretical framework                                                  31

2.12     Concept of profitability                                                  31

2.13     Theory of production                                                                  34

2.13.1  Production function                                             35

2.14     Analytical framework                                                             36

2.14.1  Translog stochastic frontier production model (SEPM)              36

2.14.2  Budgetary model                                                                     39

CHAPTER THREE: METHODOLOGY

3.1       The study area                                                                                  41

3.2       Sampling procedure                                                                 41

3.3       Validity and reliability of instrument                                  42

3.4       Data collection                                  42

3.5       Data analysis                                                                   42

3.5.1    The stochastic frontier production function                42

3.5.2    Inefficiency model                                                 43

3.5.3    Budgetary model                                                                              43

CHAPTER FOUR: RESULTS AND DISCUSSION

4.1       Socio-economic characteristics of catfish farmers                      45

4.2       Technical efficiency of catfish farmers                                               51

4.3       Factors that influence technical efficiency of catfish farmers  52

4.4       Costs and returns of catfish farmers                                   55

4.5       Problems associated with catfish farmers                                          56

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1       Summary                                                                   58

5.2       Conclusion                                                                                                      59

5.3       Recommendations                                                     59

REFERENCES

APPENDICES

LIST OF TABLES

Pages

Table 2.1         Comparison of cost and nutritional values of different sources of animal protein per 100g serving.                         28

Table 2.2         Fisheries and aquaculture production with estimated value chain components, costs and estimated employment.     29

Table 4.1         Distribution of farmers according to age        45

Table 4.2         Distribution of farmers according to sex                                    46

Table 4.3         Distribution of farmers according to marital status (Years)       46

Table 4.4         Distribution of farmers according to household size    47

Table 4.5         Distribution of farmers according to level of education      47

Table 4.6         Distribution of farmers according to level of farming experience 48

Table 4.7         Distribution of farmers according to farming status 49

Table 4.8         Distribution of farmers according to farm size (hectare) 49

Table 4.9         Distribution of farmers according to type of labour              50

Table 4.10       Distribution of farmers according to extension contact (Monthly)     50

Table 4.11       Technical efficiency distribution of catfish farmers       51

Table 4.12       Maximum likelihood estimation (MLE) of stochastic frontier production function for catfish farmers                                                            52

Table 4.13       Estimated costs and returns of the catfish farmers 55

Table 4.14       Distribution of respondents based on problems associated with catfish farmers                                                56

LIST OF FIGURES

Pages

Figure 2.1        Production cycle of clarias gariepinus                               20

CHAPTER ONE

INTRODUCTION

1. Background of the Study

Fish farming is the sub-set of aquaculture that focuses on rearing of fish under controlled or semi-controlled conditions for economic and social benefits. Aquaculture is the rearing of aquatic organisms under controlled or semi-controlled conditions for economic and social benefits. Aquatic organisms include fishes, molluscs, crustaceans and aquatic plants. Culture implies some forms of intervention in the rearing process to enhance production such as regular stocking, feeding, protection from predators etc Food and Agricultural Organization (FAO, 2006).

In Nigeria, the production of food has not increased at the rate that can meet the increasing population. While food production increases at a rate of 2.5%, food demand increases at a rate of more than 3.5% due to high rate of population growth of 2.83% (Ojo & Fagbenro, 2010). The apparent disparity between the rate of food production and demand for food in Nigeria has led to a food demand supply gap thus leading to a widening gap between domestic food production and total requirement, an increase resort to food importation and high rates of increase in food prices and as a result, wide spread hunger and malnutrition are evident in the country (Ugwumba & Chukwuji, 2010).

The growth of a country’s population is usually accompanied by increase in the demand for the basic necessities of life including water, food and shelter. This is the case with the unrestricted increase in the demand for protein rich food items of animal origin especially. FAO(1991), recommended that an individual takes 35 grams per caput of animal protein per day for sustainable growth and development. However, the animal protein consumption in Nigeria is less than 10 grams per person per day, which is a far cry from the FAO minimum recommendation (Onoja & Achike, 2011). The major animal protein sources in the country include cattle, goat, sheep, poultry and fish. Out of these sources fish and fish products provide more than 60% of the total protein intake in adults especially in the rural areas (Adekoya, 2004). Therefore, the importance of the fishing industry to the sustainability of animal protein supply in the country cannot be over-emphasized (Ugwumba & Chukwuji, 2010). Regrettably, the supply of food fish has been on the decline. This is due to consistent declines from the country’s major source of food fish, the artisanal fisheries, from 90% in 1990 (Tobor, 1990) down to 40% in 2006 resulting to about 300,000 metric tonnes Global Agriculture Information Network (GAIN, 2007). Because aquaculture is capital intensive and financing is generally needed to feeds and labour in the production of catfish and other aquatic species, thus available resources needed to be efficiently utilized to maximize profit. According to (Eyoh & Igben, 2002), knowledge of efficiency of resource use is vital to farmers in agricultural productivity. That, the utilization of land resources is closely guided by the concept of highest and best use for maximum agricultural productivity. Furthermore, profitability analysis could guide investors and would attract investors in committing available funds into catfish production due to its high rate of profitability shown in recent studies such as (Kainga & Adeyemo, 2013; Onoja & Achike, 2011; Ugwumba & Chukwuji, 2010; Esu, Asa & Iniedu, 2009). Currently, domestic fish production is put at 551,700 metric tonnes as against the present national demand of about 1.5 million metric tonnes estimated for 2007 (Osawe, 2007; Nwosu, & Onyeneke, 2013). An underlying premise behind most of the work of efficiency is that if farmers are not  making efficient use of existing technologies, then efforts designed to improve efficiency would be more cost effective than introducing new technologies as a means of increasing agricultural output (Effiong, 2005; Ike,  2008).

The shortfall is said to be bridged by the importation of 680,000 metric tonnes annually consuming about N50 billion in foreign exchange (Odukwe, 2007). It has been asserted by (Amaefula, Onyekweaku & Asumugha, 2010; Ugwumba & Chukwuji, 2010) that the only way of boosting fish production and thereby move the country towards self- sufficiency in fish production is by embarking on fish farming (aquaculture) especially catfish farming. Fisheries occupy a unique position in the agricultural sector of the Nigerian economy. In terms of Gross Domestic Product (GDP), the fishery sub-sector has recorded the fastest growth rate in agriculture to the GDP. The contribution of the fishery sub-sector to GDP at 2001 current factor cost rose from N76.76 billion to N162.61 billion in 2005 Central Bank of Nigeria (CBN, 2005). Fish is an important source of protein to large teaming population of Nigeria and fish contributes about 40 – 50% of protein intake of average Nigerian from animal sources (Adeniji, 1987; Ugwumba & Ugwumba, 2003). According to Adekoya (2004), fish and fish products constitute more than 60% of the total protein intake in adults especially in rural areas. Hence, the role of the fishing industries in sustaining animal protein supply in Nigeria cannot be overemphasized (Ugwumba & Chukwuji, 2010). Amiengheme (2005) enumerated the importance of fish in Human Nutrition as follows:

1. Food fish has a nutrient profile superior to all terrestrial meats (beef, pork and chicken, etc) source of high quality animal protein and highly digestible energy.
2. Fish is a good source of sulphur and essential amino acids such as lysine, leucine, valine and arginine. It is therefore suitable for supplementing diets of high carbohydrate contents.
3. Fish is also a good source of thiamine as well as an extremely rich source of Omega iii poly-saturated fatty acids, fat soluble vitamins (A, D and E) and water soluble vitamins (B complex) and minerals (Calcium, Phosphorus, Iron, Iodine and Selenium).
4. It has a high content of Polyunsaturated (Omega iii) fatty acids which are important in lowering blood cholesterol level and high blood pressure. It is able to mitigate to alleviate platelet of (cholesterol) aggregation and various arteriosclerosis conditions in adult populations.
5. It reduces the risk of sudden death from heart attacks and reduces rheumatoid arthritis.
6. Omega iii fatty acids also lower the risk of age related muscular degeneration and vision impairment.
7. It decreases the risk of bowel cancer: and reduces insulin resistance in skeletal muscles.

It is known that economics is an important concept which is the main focus of this study, because it relates to the financial feasibility of expansion, or indeed starting up of an enterprise and contains information of the efficiency of the technical and managerial process. Profitability in common usage means the ability to earn profit. The profitability of any enterprise is measured in relation to the size of the business (Kainga & Seiyabo, 2012). Different forms of business produce goods and services for sale in other to earn income. If the income earned does not exceed cost of production in turn, the firm cannot stay in business for a long time therefore the aim of any enterprise is to minimize cost and maximize output in other to maximize net revenue.

The term efficiency can be described as the use of the lowest amount of inputs to produce greatest amount of output. Thus efficiency simply means reducing the amount of wasted inputs. The modern theory of efficiency dates back to the pioneering work of  Farell (1977)  who proposed that the efficiency of a farm consists of technical and allocative component and the combination of these two components provide a measure of total economic efficiency (overall efficiency). The crucial role of efficiency in increasing agricultural output has been widely recognized by researchers and policy makers like (Nwaru, 2005; Onoja & Achike, 2011). Indeed, considerable efforts have been devoted to the analysis of farm level efficiency in developing countries. Therefore, greater improvement in catfish production can be achieved with a proper analysis that will lead to knowledge of the level of profitability of catfish farming and technical efficiency to production which constitute the basis for this study. 

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