Continental J.

Agricultural Economics 4: 1 - 8, 2010 ISSN: 2141 – 4130

© Wilolud Journals, 2010 http://www.wiloludjournal.com

ANALYSIS OF RETURNS TO SOCIAL CAPITAL AMONG TIMBER MARKETERS IN ONDO STATE.

Awoyemi, T. T1 and Ogunyinka, A. I.2

1
Department of Agricultural Economics, University of Ibadan, Ibadan, Oyo State, Nigeria.
2
Department of Agricultural Extension and Management, Federal College of Agriculture, Akure, Ondo State.
Nigeria.

ABSTRACT
This study examines the returns to social capital among timber marketers in Ondo State.
Purposive sampling was used in the data collection as four sawmills was identified and one
hundred and twenty respondents were randomly selected from the sawmills. Questionnaire was
used to obtain information from the marketers. Results show that over 75% of the members
attend meetings regularly with an index of between 20 and 50 percent of the highest time
allocated to meeting attendance. The decision-making index of the respondents’ shows that
members with the highest decision making index have high social capital than those with low
or intermediate index and are most committed to the course of the association. Result shows
that marketers with high income from the business tends to be more involved in local
association activities as a result of social capital accumulated. Social capital dimension shows
that index of participation and cash contribution was significant at 10 percent showing that as
respondents participate in local association activities more social capital was accumulated.

KEY WORDS: Social capital, gross margin, marketing, local association

INTRODUCTION
Social capital has become a topic of interest in a large number of policy areas. Definitions vary but it is often
understood to be a social resource which is created through formal and informal relationships between people within
a community. It describes the social environment that people live in, and is the collective resources to which
individuals, families, neighbourhoods and communities have access. The World Bank (1999) defines social capital
as the institutions, relationship and norms that shape the quality and quantity of a society interaction. Increasing
evidence show that social cohesion is critical for societies to prosper economically and for development to be
sustainable.

Social capital has been found to have great impact on the income and welfare of the poor, by improving the outcome
of activities that affects them. Rural people coming together to achieve a common goal through social capital, will
improve the efficiency of rural development programs by increasing agricultural productivity, facilitation, the
management of common resources making rural trading more profitable and improve access of people or household
to water, sanitation, credit and education in rural and urban areas (Grootaert and Bastelaer, 2001). This is why
social capital refers to connections among “individuals” and the “social networks” of reciprocity that arises from
them.

Social capital is one among several factors of production, along with human capital, financial capital, physical and
natural resources (Crudeli, 2005; Grootaert and Narayan, 1999; Serageldin 1996). Thus, there is a growing
recognition (Grootaert, 2005, Okunmadewa et al, 2004) that difference in economic outcomes, whether at the level
of the individual or household or at the level of the state, cannot be explained fully by difference in the “traditional”
inputs such as labour, land and physical capital. The role of social capital plays in affecting the well being of
household and the level of development of communities and nations are been documented (Serageldin 1996 and
Grootaert, 1999), these scholars argued that social capital is an input in a household’s or a nation’s productions and
has major implications for development policy and project design. This suggests that acquisition of human capital
and establishment of physical infrastructure needs to be complemented by institutional development in order to reap
the full benefits of the investments (Grootaert, 1999, Svendsen, 2000; Knack 1999). Social capital describes
activities familiar in everyday life in rural and pre-industrial societies around the world, cooperation between
individuals within their household and outside it to meet their everyday needs (Halpern, 2001). Yet social capital
has not been easily accounted for in the money terms (Woolcock, 2001), its significance has tended to be overlooked

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 Awoyemi, T. T and Ogunyinka, A. I: Continental J. Agricultural Economics 4: 1 - 8, 2010

(Lorenz, 1988). However, it ought to be of major importance in developing countries like Nigeria where so much
economic activity is not yet fully monetized and extended family ties are primary (Okunmadewa et al, 2004).
Certainly, the case for massive investment in social capital has be made, investing in social capital, although, there
are number of time-tested approaches in investing in social capital that are available such as building schools,
training teachers, developing appropriate curricula and so forth. Equivalent which have proven fruitful but
documentation in investing in social capital have not yet emerged (Grootaert and Bestelaer, 2001).

Consequently, this study is designed to assess returns to social capital among timber marketers in Ondo State,
specifically; the study developed a social capital index and the index was used to categories social capital formation
available to marketers in the study area, evaluate the effect of social capital index on gross margin, asses the degree
of linkage between social capital and income of timber marketers.

METHODOLOGY
Area of Study
This study was conducted in Ondo State of Nigeria (2009). Ondo State is situated in the south western geo-political
region of Nigeria, which comprises of 18 Local Government Areas. The state has a land area of 14,973 square
kilometer and projected population of 5,691,843 (NPC, 1991). It is bounded in the North by Ekiti and Kogi State, in
the East by Edo and Delta States, in the West by Osun and Ogun State and in the south by the Atlantic Ocean. Ondo
State falls within the tropical forest with total rainfall of about 1,250mm-1,500mm annually and it has a bio-modal
distribution between April-August and August-November. The maximum temperature ranges between 12oC-23oC,
while humidity is relatively high.

Agriculture is the main occupation of the people of Ondo State. Majority of the people in the area are producers
who produce and market some agricultural produce like maize, rice, yam, plantain, tomato e. t. c. including livestock
production. The people are predominantly farmers. The farming population is scattered all over the villages in the
Local Government Areas.

Sources of Data
The data for this study were obtained mainly from primary sources. Information was collected on the socio-
economic/demographic characteristics of food marketers, costs and returns of each timber marketer, social capital
indices such as level of trust, Heterogeneity index, Density of membership, meeting attendance and active
participation index.

Sampling Procedure
The study covers Akure South Local Government Area of Ondo State. Since timber marketing is a lucrative
business in Ondo State, four sawmills were chosen from the Local Government, they are at Ogbese, Oba-ile, Ilara-
makin and Awule. From each of the sawmill, thirty marketers was randomly selected to make a sample size of 120
respondents.

Analytical Techniques
The analytical framework for this study includes descriptive, gross margin and regression analyses. The descriptive
analysis encompasses frequency distribution, mean, median and mode as well as coefficient of variation. In addition,
different social capital dimension indices are constructed. The regression analysis attempts to model the Social
Capital Index through identifying and listing of all social capital dimensions attaching scores and weight
respectively. Social capital index (SCI), Human Capital (HC) and Socio-economic variables (SEV) of the marketers
were measured against their Gross margin/Total sales.

The Gross margin analysis is used to determine the profitability of the business. It is the difference between the
Total Revenue and the Total variable cost.

Gross margin = Total Revenue – Total variable Cost

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 Awoyemi, T. T and Ogunyinka, A. I: Continental J. Agricultural Economics 4: 1 - 8, 2010

The regression analysis is further elaborated upon in the subsequent paragraphs.

The implicit form of the model is given by
Q= f (SCI, HC, SEV)

Where Q= Gross Margin/Total sale as dependent variable

SCI= Social capital index
HU= Human Capital
SEV= Socio-economic variables

Variables Definition
(A) The social capital variables that were used in the regression analysis include:
The indices used are density of membership, heterogeneity index, meeting attendance index, cash contribution,
labour contribution and decision making index. The measurement of these six social capital indices is as explained
below. This follows the approach used by Grootaert, et al (2002). The measurement of each is as described below.

1. Density of membership: this is captured by the summation of the total number of associations to which each
household belongs. In other words, the membership of associations by individuals in the household is summed up.

2. Heterogeneity index: this is an aggregation of the responses of each household to the questions on the diversity of
members of the most important institutions to the households.

3. Meeting attendance index: this is obtained by summing up the attendance of household members at meetings and
relating it to the number of scheduled meetings by the associations they belong to.

4. Cash contribution: This was obtained by the summation of the total cash contributed to the various associations
which the household belong.

5. Labour contribution: this is the number of days that household members belonging to institutions claimed to have
worked for their institutions.

6. Decision making index: this was calculated by summation of the subjective responses of households on their
rating in the participation in the decision making of the three most important institutions to them.

Aggregate social capital index: this is obtained by the multiplication of density of membership, heterogeneity index
and decision making index (Grootaert, 1999). The resultant index is renormalized to maximum value of 100.

(B) The human capital variable was measured by the average years of formal education of the head of the
household.

(C) The household characteristics used are:

(i) Marital status of household head (1 if married, 0 if otherwise)
(ii) Household size (actual number of people in the household)
(iii) Gender of household head (D=l if male, 0 if otherwise)
(iv) Age of household head in years

RESULTS AND DISCUSSION

Selected Household Characteristics and Dimensions of Social Capital.
Selected Household Characteristics of Respondents: Table 1 presents the selected socio-economic characteristics of
the sampled respondents. Most of the marketers selected are male (79.2%) while 20.8% of the marketers are female;
the competing demand for production and reproduction may be responsible for low involvement (Adekoya, 2007).
Age-wise, most of the respondents are in their economic active age. Most of the marketers are in the middle age
falling between 36-55years (60%). This implies that risk element could be potent in the enterprise, in that is assumed
that the older the marketers the more risk averse he becomes. Table 1 also shows that the marketers have household

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 Awoyemi, T. T and Ogunyinka, A. I: Continental J. Agricultural Economics 4: 1 - 8, 2010

size of between 5-10 members this implies that the respondents have a relatively large family. This may be as a
result of the need to have more helping hands with the business.

The level of educational attainment shows that majority of the respondents had access to formal education, 88.4%
had one form of formal education or the other, the recorded level of education might influence marketer’s level of
exposure and be more involved in social activities.

Table 1 also shows that majority of the marketers had between 1-10 years of experience in the business (59.9%),
while 25.8% have been into timber marketing for over 10years. The result implies that more experience people are
involved in the business and this enables them to relate more with each other and build a strong trust among
themselves.

Table 1: Selected Household Characteristics of Respondents

Variable Frequency Percentage (%)
Gender
Male 95 79.2
Female 25 20.8
Age:
26-36yrs 9 7.5
36-45yrs 45 37.5
46-55yrs 27 22.5
Above 55yrs 39 32.5
Household size
Less than 5 25 20.8
5-10 83 70.7
Above 10 10 8.5
Level of Education
No formal education 14 11.6
Primary 35 29.1
Secondary 45 37.4
Tertiary 20 16.6
Others specify 6 5.0
Years of Experience
1-10yrs 72 59.9
11-20yrs 31 25.8
21-30yrs 17 14.2
Total 120 100.0
Source: Field Survey, 2009

Social Capital index

Table 2 shows the social capital index, the result shows that majority of the marketers belong to at least one
association in the study area. While 16.6% belong to 2-3 association in the area. This shows that the marketers
belong to least one local association where they interact. On the cash contribution of the marketers, the results
shows that about 79.8% contribute less than 4 percents of total cash contribution, while 20% contribute more than 4
percent of the highest cash contribution within the study area. The labour contribution index shows that 70% of the
marketers gave less than 20 percent of the highest time allocated to any local association in the study area, while
30% gave more than 20 percent of the highest time allocated to any association within the study area. The
Heterogeneity index involve using socio-economic factors such as religion, age, level of education, gender to
construct heterogeneity index, this depicts the internal homogeneity of the group. The result shows that about 21.6%
of the marketers have an heterogeneity index of less than 20 in their local associations and about 28.2% have an
heterogeneity index of between 20 and 50 while 50.% of the marketers were on heterogeneity index that is greater
than 50. A high degree of heterogeneity in an association usually has negative implication, because it makes it more
difficult for members to trust each other, since it implies lesser degree of homogeneity. In term of meeting

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 Awoyemi, T. T and Ogunyinka, A. I: Continental J. Agricultural Economics 4: 1 - 8, 2010

attendance, it seem that meetings are most frequent in the study area occurring on the average, every ten days, the
table shows that the higher the meeting attendance index by members, the more the participation in the association’s
activities. The result shows that over 75% of the members attend meetings more regularly with an index of between
20 and 50 percent of the highest time allocated to meeting attendance. The decision-making index of the
respondents’ shows that members with the highest decision making index have high social capital than those with
low or intermediate index. This may be so because those with high decision making index are likely to be most
committed to the course of the association and those with very low value of decision making index, they seem not to
be committed to the activities of the associations and hence lower social capital. The result shows that 82.5% of the
marketers have above 20 percent decision making index.

Table 2: Social Capital Indices

Frequency Percentage (%)
Density of Association
Less than 2 92 76.5
2-3 20 16.6
Above 3 8 6.6
Cash Contribution
Less than 4 96 79.8
4-10 15 12.5
11-20 6 5.0
Above 20 3 2.5
Labour Contribution
Less than 20 74 70.0
20-50 27 12.5
Above 50 9 7.8
Heterogeneity Index
Less than 20 26 21.6
20-50 34 28.2
Above 50 60 50.0
Meeting Attendance
Less than 20 27 22.7
20-50 90 75.0
Above 50 3 2.5
Decision Making
Less than 20 9 7.8
20-50 84 70.0
Above 50 27 12.5
Total 120 100.0
Source: Field Survey, 2009.

Gross Margin Analysis

Gross margin is used to determine the profitability of the business. It is the difference between the Total Revenue
and the Total variable cost.

Gross margin = Total Revenue – Total variable Cost

The total revenue is the amount of money collected by the timber merchants on the sale of timber. The total variable
cost is the cost incurred in the running of the business which include labour, wages, offices and administrative
expensive, fueling and vehicle maintenance, electricity dues e.t.c.

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Result of Cost and Returns Analysis

Total variable Cost N65026800
Total Revenue N287292400
Gross Margin N222265600
Gross Margin per marketer = Total Gross margin
Number of marketer
= 222265600
120
= N1852213.33

From the result, the total variable cost was N65026800 while the total revenue was N287292400, when the gross
margin per marketer was N1852213.33. The size and positive value obtained from the gross margin confirmed that
timber marketing was able to cover the operating expense therefore profitable in the study area.

Regression Analysis
Table 3 and 4 show the effect of socio-economic variables, human capital variable and social capital index variables
on respondent’s gross margin. The education variables in Table 3 was disintegrated into primary, secondary and
tertiary variables, while the aggregate social capital index was disintegrated into its components indices, which are
Heterogeneity index, decision making index, cash contribution index, labour contribution index, meeting attendance,
index of participation in Table 4.

(a) Socio-Economic variables

From Table 3, two of the five variables in the index were significant and these are years of experience (at 5percent)
and years of education (at 5percent). The interpretation of the result shows that years of experience in the business
enhance participation in social association because of the benefit derived from the association which in turns
increase the profit realized from the business. Also the result suggests that being educated and accumulating social
capital would improve the performance on the business. This is so since the higher the level of education of the
marketers the more their human capital and thus increased income.

The insignificant variables are sex, age, and family size at 5percent this is because sex does not affect participation
in local association in the study area. Age of the respondents have little effect on the social capital formation.

(b) Human Capital variable

The human capital variable considered is the years of education and result from table 3 confirm that it is an
important variable, thus impact accumulating social capital in the area. This shows that the more educated the
respondents are the more social capital they can accumulate.

(c) Social Capital Index variables

In Table 3, the social capital index does not have a significant effect on the marketers gross margin, however
variables such as index of participation, cash contribution, were significant at 10 percent level of significance. The
implication of these findings is that the proportion of participation and cash contribution of the respondents increase
in association, so will more social capital be accumulated. Also labour contribution and Heterogeneity index is
significant at 5percent.

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Table 3 Regression Analysis Result I

Variables Coefficient Standard Error t-ratio IP(/T/>t)
Parameter
Constant -254.364 222.067 -1.145 .2540
Sex 40.061 33.132 1.239 .1785
Age 6.694 8.234 .754 .4607
Family size -5.546 7.923 -.557 .450
Years of Experience 5.498 2.023 1.304 .033**
Years of Education 56.410 27.678 1.864 .543**
Social Capital index 0.0057 2.18 -1.479 .1234
Membership in 0.0825 0.432 0.581 0.543
Association
Index of Participation 1.869 5.858 0.319 0.750*
Heterogeneity index 0.427 0.736 0.580 0.563
Meeting Attendance -1.214 0.710 -1.609 0.034
Cash Contribution 0.231 1.347 0.145 0.0765*
Labour Contribution 0.979 1.157 0.787 0.392
Source: Field Survey Data 2009,* Significant at 5%, ** Significant 10%

Table 4 Regression Analysis Result II

Variables Coefficient Standard Error t-ratio IP(/T/>t)
Parameter
Constant -203.032 211.324 -.823 0.321
Sex 87.761 34.453 1.002 0.245
Age 6.354 9.342 0.761 0.423
Tertiary Education 89.91 45.34 2.120 0.035
Primary Education 26.76 42.341 0.542 0.4304
Secondary Education 41.353 45.042 0.931 0.346
Social Capital index 0.0014 0.054 2.18 0.123
Membership in 0.0741 0.321 0.831 0.435
Association
Index of Participation 1.869 5.858 0.419 0.650
Heterogeneity index 0.474 0.643 0.580 0.563
Meeting Attendance -1.134 0.510 -1.739 0.052
Cash Contribution 0.361 1.256 0.134 0.0589
Labour Contribution 0.798 1.231 0.864 0.278
Source: Field Survey Data 2009.

CONCLUSION
Social capital has been found to have great impact on the income and welfare of the poor, by improving the outcome
of activities that affects them. Rural people coming together to achieve a common goal through social capital
accumulation. As empirical findings from this study show that marketers with high income from the business tends
to be more involved in local association as a result of the social capital accumulated. Social capital dimension shows
that index of participation and cash contribution was significant at 10 percent showing that as respondents
participate in local association more social capital was accumulated. Also labour contribution and Heterogeneity
index was significant at 5percent showing that marketers are more directly involved in the activities of the local
association which will influence social capital accumulation.

The income realized shows that timber marketing is a profitable venture in the area, this influence participation in
local association as shown in the cash contribution of the marketers, income generated from one’s business activities
enable the people to participate in local association and this in turn influences social capital accumulation.

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REFERENCES
Adekoya, A. E. (2007): “Determinant of Productivity level of Commercial Grasscutter farmers in Oyo State”. In
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Crudeli, L. (2005): Social Capital and economic Opportunities. The Journal of Socio-economic
www.elsevier.com/locate/econibase.

Grootaert, C. (1999): Social capital, household welfare and poverty in Indonesia. Local Level Institutions Study,
Working Paper No. 6, Social Development Department, World Bank, Washington D.C.

Grootaert, C. (2005): Social Capital, Household welfare and Poverty in Indonesia, Local level institutions study,
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Grootaert, C. and D. Narayan (1999): “Local Institutions, Poverty and Household Welfare in Bolivia” Mimeo,
Social Development Department. Washington D. C. World Bank.

Grootaert C., Oh, G. T. and Swamy, A. (2002): Social Capital, Household Welfare and Poverty in Burkina Faso.
Journal of African Economies, 11(1): 4-38.

Grootaert, C., and T. Van Bastelaer (2001): “Understanding and measuring social capital: A synthesis of findings
and recommendations from the social capital initiative”. Washington, D. C.: World Bank.

Halpern, D. S. (2001): Moral values, social trust and inequality: can values explain crime? British Journal of
Criminology, 2001.

Knack, S. (1999): "Social Capital, Growth and Poverty: A Survey and Extensions" Social Capital Initiative Working
Paper, Social Development Department. Washington, D.C. World Bank.

Lorenz, E. H. (1988): “Neither friends nor strangers: Informal Networks of Subcontracting in French Industry” In:
Gambetta D (ed): Trust: Making and Breaking Cooperatives Relations. New York Basil Blackwell.

NPC (2006): National Population Commission Census Figure 2006.

Okunmadewa, F. Y., Yusuf. S. A. and Omonona, B. T. (2004): Social capital and Poverty Reduction in Nigeria.
Report Submitted to Africa economic Research Consortium (AERC).

Serageldin, I. (1996): “Sustainability as Opportunity and the Problem of Social Capital” Brown Journal of World
Affairs 3(2): 187-203.

Svendsen, S. (2000): Social capital, the economy and education in historical perspective in Baron S., Field J. and
Schuller T., Social capital : critical perspectives, Oxford University Press, 2000.

Woolcock, M. (2001): “The place of social capital in understanding social and economic outcomes”, Canadian
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World Bank (1999) World Development Report 1999.

Received for Publication: 14/07/2010, Accepted for Publication: 18/08/2010

Corresponding Author
Ogunyinka, A. I
Department of Agricultural Extension and Management, Federal College of Agriculture, Akure, Ondo State.
Nigeria.

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Continental J. Agricultural Economics 4: 9 - 18, 2010 ISSN: 2141 – 4130
© Wilolud Journals, 2010 http://www.wiloludjournal.com

EFFICIENCY OF VEGETABLE PRODUCTION UNDER IRRIGATION SYSTEM IN ILORIN METROPOLIS:

A CASE STUDY OF FLUTED PUMPKIN (Telferia occidentalis).

Nwauwa, Linus Onyeka Ezealaji and Omonona, Bola T . *

Department of Agricultural Economics, University of Ibadan, Ibadan, Nigeria.

ABSTRACT
The study was carried out in Ilorin metropolis of Kwara State, Nigeria. It investigated the costs
and return analysis of the respondents and the stochastic frontiers production analysis was
applied to estimate the technical, allocative and economic efficiency among fluted pumpkin
farming households in the metropolis. The result of the gross margin analysis showed that the
average gross margin per farmer was ₦21,252. The results of economic efficiency also
revealed an average of 0.904 while the mean technical and allocative efficiency were 0.978
and 0.925 respectively. Stochastic frontier production model showed that fertilizer and labour
were found to be significant factors that contributed for the technical efficiency of the farmers
while plot size and labour also were significant factors for allocative efficiency. The results
therefore concluded that only years of experience and size of plot were the significant factors
in the inefficiency sources model. On the basis of the findings, the study recommends that the
government should provide conducive environment for the establishment of modern irrigation
facilities for dry season farming, encourage more citizenry, especially the youths to practice
dry season vegetable farming in a bid to alleviate poverty status and unemployment in the state
and the country at large.

KEYWORDS: Fluted pumpkin, farming, technical, allocative and economic efficiency.

INTRODUCTION
Telfairia occidentalis otherwise called fluted pumpkin is one of the commonest, popular cut herbs grown mainly in
southeastern Nigeria and belongs to the cucurbitaceace family. The crop, which originated from West Africa, is a
perennial climber grown for its leaves and seeds, which are very nutritious (Schippers, 2000). Fluted pumpkins can
be cultivated on the flat land or on mounds. In home gardens, they are frequently grown along a fence or next to a
tree, thus allowing the fruit to hang from a branch. They are also raised along stakes of various types including
bamboo [Akoroda, 1990]. Telfairia does best at the lower altitudes and medium to high rainfall and will do well on
sandier soil provided fertilizer is applied but has a more robust growth in rich well drained soil. When planting for
leaves, the usual spacing is 50 x 50cm for a mono-crop or occasionally even closer. Some farmers plant in the
middle of a 1.20m- wide bed at 40cm interval, and others plant on a mound next to a stake.

There is a clear need for location- specific plant density trials. When seed supply is not a limiting factor, farmers like
to plant two (or three) seeds/hole just in case seeds fail to germinate [Odiaka, 1997]. Nitrogen is essential for
adequate vegetation and should ideally be given in the form of manure, applied before planting. The use of well-
decomposed manure is essential for fruit production and in this case it is recommended that about 1 kg manure/
plant be applied. For maximum leaf yields, it is advisable to top dress with a nitrogen fertilizer immediately after
each harvest. The maturity period for vegetative growth is between one to six months while for fruits, it is 6-8
months. Harvesting of shoots up to 50cm long can begin 1 month after germination followed by 3-4 week intervals
when new shoots are formed. Fresh shoot yields is usually about 500-1000kg/harvesting/ha, but could be more if the
crop receives adequate manure or when fertilizers are applied after each picking [Akinsami, 1975; Schippers, 2000].

The major crops grown under irrigation are vegetables, wheat and rice with initial bias for vegetables [Olugbemi,
1989]. Vegetables, which are rich sources of vitamins, minerals, carbohydrates, protein and dietary fibres are
important to the human diet. A balanced diet should contain 250-325g of vegetables and the average human
requirement for vegetable is 285g/person/day for a balanced diet [Nwachukwu, and Onyenweaku, 2007]. Over
dependence on rain-fed agriculture has led to seasonal vegetable shortage, fluctuation in vegetable prices, nutritional
inadequacy, which dry season vegetable production would have solved [Ayoade, 1988]. Outside Nigeria, where

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 Nwauwa, Linus Onyeka Ezealaji and Omonona, Bola T: Continental J. Agricultural Economics 4: 9 - 18, 2010

fluted pumpkin is frequently eaten by up to 35 million people, and apart from West Cameroon, it is far less well
known and, if so, then mainly for its immature edible seeds rather than for its shoots and leaves.

Indigenous vegetable production in Nigeria is rapidly decreasing due to water scarcity problem associated with the
cropping season. In the past, indigenous vegetables were largely grown under rain fed condition. However, pure rain
fed cultivation especially in the dry zones of Nigeria can seldom be practiced at present due to erratic nature of
rainfall. The present rainfall pattern in Nigeria creates prolonged dry season period during cropping season which
affects crop development and compel the need for crop irrigation. Irrigation method practiced currently for
vegetables is manual that consumes high labour cost as well as large amount of water (Narvaratne, 2009). Hence
farmers hesitate to grow vegetable under irrigation conditions, even though the economic value of these vegetables
is high compared to other crops. If it becomes a long term practice, it would cause disappearance of indigenous
vegetables indirectly which has high nutritional and medicinal value. As such, development of an appropriate
irrigation method which has high water use efficiency and low labour requirement has become an urgent need to
develop indigenous vegetables.

Vegetables have tremendous potentials to address poverty alleviation and nutritional security because they are
affordable and easily available, easy to grow, require minimum production inputs, rich in vitamins and minerals, and
are loaded with phytochemicals and anti-oxidants properties (Eusebio, 2009). Food security remains a challenge for
Africa and other developing countries. More than half of the population studied in Africa between 1995 and 2000
experienced food insecurity. Stunting as well as high levels of vitamins A and iron deficiencies, due to inadequate
dietary intake, is one of the major causes (Averbeke,2009). The use of Western vegetable has declined in Africa in
the last 20 years. The consumption of indigenous food plant has gone up. Many of the indigenous plants are
harvested from the wild. With increased demand, it becomes imperative to cultivate selected crops most suitable for
addressing nutrient deficiencies. Some of these crops have tremendous potentials to address food insecurity. Of
these, fluted pumpkin seems most appropriate for the African region mostly affected by food insecurity. Recent
work by Okokoh (2005), reveals that fluted pumpkin either as juice or pulse has high level medicinal value in
treatment of sexual impotence, maintenance of prostate gland, urinary and digestive disorders and acts as immuno-
stimulant and vermifuge. And according to Lithan (2005) sexual ability and general healthcare are directly related to
nutrition.

Efficiently combining inputs to yield output is the primary task of farm management. When two firms in an industry
use the same inputs and employ the same technology, yet produce different quantities of output, the implication is
that at least one firm is producing inefficiently. The technical efficiency indicates the producer’s ability to achieve
maximum output from a given quantities of input and existing technology. Most recent studies have failed to
critically examine the importance of producing fluted pumpkin during dry season under irrigation system against the
popular rain fed system with a view of ascertaining their economic efficiency. If fluted pumpkin is to play a vital
role in ensuring future food availability for food security and nutrition in the country, this sector has to develop and
expand in an economically viable and environmentally sustainable manner.

The efficient allocation of resources at the farm level has implication for investment and employment at the national
level. It is also the indicator by which success of production units are evaluated. When measured correctly, it makes
it easier to separate its effects from the effects of production units thereby enabling the enactment of sound policies
by which farm level performance could be improved (Ayanwale and Abiola, 2008). Among many other factors,
increasing efficiency of resource use and productivity at the farm level is one of the pre-requisites for sustainable
agriculture (FAO, 1997). Measuring technical efficiency at the farm level, identifying important factors associated
with the efficient production system would serve as a panacea to assessing potential for developing sustainable
vegetable production.

Economic efficiency is therefore derived from a cross product of the technical efficiency and allocative efficiency
(i.e. technical efficiency x allocative efficiency). The technical efficiency of an individual firm is defined as the ratio
of the observed output to the corresponding frontier output, given the available technology while allocative
efficiency reflects the ability of the producers to use inputs in optimal proportions given their respective prices
(Ajibefun and Daramola, 1999). There are four major approaches to measure and estimated efficiency (Dey et al,

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 Nwauwa, Linus Onyeka Ezealaji and Omonona, Bola T: Continental J. Agricultural Economics 4: 9 - 18, 2010

2000). These are the non-parametric programming approach , the parametric programming approach (Aigner and
Chu, 1968; Ali and Chaudhry, 1990], the deterministic statistical approach [Schmidt, 1976;] and the stochastic
frontier production function approach [Aigner et al, 1976; Aigner et al, 1977; Meeusen and Van Den Broeck, 1977].
Among these, the stochastic frontier production function and non-parametric programming, known as data
envelopment analysis (DEA), are the most popular approaches. The stochastic frontier approach is preferred for
assessing efficiency in agriculture because of the inherent stochasticity involved. [Fare et al, 1985; Kirkley et al,
1995; Coelli et al, 1998]. Economic efficiency however depends on market forces, which in turn are influenced by
the sectoral and marketing policies of the country. Empirical literature has shown that efficiency could be measured
from a production function or a profit function approaches. The profit function approach is much more helpful when
individual or sole enterprises are considered [Nwachukwu and Onyenweaku (2007)].

Apart from several studies by Nwachukwu and Onyenweaku (2007); Ayanwale and Abiola (2008) and Odiaka et al
(2008) conducted in fluted pumpkin production in the country, a stochastic production frontier has not been widely
applied to determine the production efficiency of the fluted pumpkin producers under irrigation system.

The objectives of this research are to: (1) find the socio-economic characteristics of the fluted pumpkin farmers, (2)
to estimate the technical, allocative and economic efficiency among the fluted pumpkin farmers using irrigation
system and (3) identifying the specific factors affecting fluted pumpkin enterprise in the state. Research hypotheses
will address the following:
H01 : Inefficiency sources model do not have effects in the use of resources.
H02 : Inefficiency sources model have effects in the use of resources.

METHODOLOGY
Area of the Study: The study was carried out in Ilorin, the Kwara state capital. The state serves as a ‘bridge’ state
between the Northern and South-Western Nigeria. It shares its boundaries with Ondo, Oyo, Osun, Niger and Kogi
states in Nigeria and an international border with the Republic of Benin. The state has a population of about
2.37million people (NPC, 2006). The state has two distinct seasons annually: the dry and wet seasons. It has sizeable
expanse of arable land, rich fertile soils which is good for the cultivation of a wide variety of food crops like yam,
cassava, maize, cowpea, fruits and vegetables. Fluted pumpkin, amaranthus and cochorus are significant vegetable
crops commonly grown in the area throughout the year. Dry season vegetable production is done along the coastal
areas of Asa River and other smaller streams that run across the metropolis. Cultivation and consumption of fluted
pumpkin (Telferia occidentalis) is alien to the state. T. occidentalis originated from the oriental states of Nigeria
from where it was introduced to some different parts of Nigeria. Hence majority of the correspondents used in this
study were from the Eastern part of Nigeria resident in the state involved in the production of fluted pumpkin.
Cultural diffusion and free trade across the country paved way for the production and consumption of fluted
pumpkin by majority of the citizenry. Local vegetables such as Amaranthus spp. and celosia argente etc are
gradually giving way to fluted pumpkin as a major vegetable food among the people of the state. The vegetable has
no local name hence it is still widely referred to as ‘ugu’ in the state, the original name it is called in the East.

Fluted pumpkin is mainly produced in Ilorin metropolis for pumpkin consuming population and sometimes
marketers go as far as Ibadan and Lagos to buy in order to augment local production. There is no evidence of
commercial fluted pumpkin production in the other parts of the state.

Sample Selection
The target population of this study is the households that produce fluted pumpkin under irrigation system. A two-
stage sampling procedure was used to select a representative sample for the study. The first stage was the random
selection of 10 areas along the coastline in the zone and the second stage involved the random selection of 10
household- respondents from each of the coastal areas engaged in dry season fluted pumpkin production, making a
total of 100 respondents. The data for the study were extracted from the respondents through questionnaire method
followed with personal interview by the researcher where necessary. Additional information for the study was
sourced from secondary sources such as journals and periodicals, Food and Agricultural Organisation circulars, etc.

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Theoretical Underpinning/Conceptual Framework

Following Farell’s (1957) article on efficiency measurement which led to the development of several approaches to
efficiency and productivity analysis, among these is the Data Envelopment Analysis (AEA). As noted by Coelli et
al, (1998), the stochastic frontier is considered more appropriate than DEA in agricultural applications especially in
developing countries where the data is likely to be influenced by measurement errors and effects of weather
conditions, disease etc. This equally applies to the applications of frontier techniques to agriculture, including fluted
pumpkin production. However, the modeling and estimation of frontier production function has been a subject of
considerable interest in econometrics and applied economic analysis during the last two decades. Review of frontier
production is given by Forsund, et al (1980), Bauer (1990) and Battese and Coelli (1992). The stochastic frontier
production proposed by Battese and Coelli (1992) assumed that a random sample of farms is observed over t-period
such that the production of n farms over time is a given function of input variables and random variables which
involve the traditional random error and non-negative random variable which are associated with technical
inefficiencies of production. One of the earliest empirical studies in stochastic frontier production function was an
analysis of the source of technical inefficiency in the Indonesian Wheat Industry by Pit and Lee, (1983). The study
estimated a stochastic frontier production function by the method of maximum likelihood and the prediction of
technical inefficiencies were then regressed upon size of firm, age and ownership structure of each firm. These
variables were found to have significant effect on the degree of technical inefficiency of the firms.

Battese and Coelli, (1992) also investigated factors which influenced the technical inefficiency of Indian Farmers
using a stochastic frontier production function which incorporated a model for the technical inefficiency effects,
results found out that some farmers were able to achieve maximum efficiency while others were technically
inefficient. Onu et al, (2000) similarly investigated the determinants of cotton production and economic efficiency
using a stochastic frontier production function, which incorporated a model of inefficiency effects. The results
indicated that labour and material input were the major factors associated with changes in the output of cotton.
Farmers –specific variables which comprise status of farmers, education, experience, and access to credit facilities
were found to be significant factors that accounted for the observed variation in inefficiency among the cotton
producers.

The frontier production model analysis for cross sectional data can be defined by considering a stochastic production
function with a multiplicative disturbance term of the form:

Y = f(Xa β) ℮ε …………………………. (1)

Where,
Y = the quantity of the original output
Xa = a vector of input quantities
β = a vector of parameters and
ε
= error term Where ‘ε’ is a stochastic disturbance term consisting of two independent elements ‘µ’ and ‘v’
where, ε = µ + v …………………………………...(2)

The symmetric component ‘v’ accounts for random variation in output due to factors outside the farmers control
such as weather and disease. It is assumed to be independently and normally distributed with zero mean and constant
variance as N ̴ (0,σ2v). A one sided component µ < 0 reflects technical inefficiency relative to the stochastic frontier,
(f(xa,β) ℮ε). Thus, µ = 0 for a farm output which lies on the frontier and µ < 0 for one whose output is below the
frontier as [N ̴ (0,σ2u)], that is , the distribution of ‘µ’ is half normal.
The frontier of the farm is given by combining (1) and (2).

Y = f f(xa,β) ℮(u+v) …………………………………..(3)

Measures of efficiency for each farm can be calculated as:

TE = exp. [E{ µ/ε}] …………………………………….(4)

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 Nwauwa, Linus Onyeka Ezealaji and Omonona, Bola T: Continental J. Agricultural Economics 4: 9 - 18, 2010

And ‘µ’ in equation (4) is defined as :

µ = f (zb, σ) ……………………………………………..(5)

Where zb = a vector farmer specific factor.

σ = a vector of parameters.

The parameters for the stochastic production frontier model in equation (3) and those for the technical inefficiency
model in equation (5) were estimated simultaneously using the maximum-likelihood estimation (MLE) programme ,
FRONTIER 4.1 (Coelli, 1994), which gives the variance parameter of the likelihood function in terms of σ2 = σ2u +
σ2 v ,
γ = σ2u / σ2

In terms of its value and significance, γ is an important parameter in determining the existence of a stochastic
frontier: rejection of the null hypothesis. Ho1 : γ = 0 implies the existence of a stochastic production frontier.
Similarly, γ = 1 implies that all the deviation from the frontier are due mainly to technical inefficiency (Coelli, et al.,
1998).

Data Analysis
The tools employed for the analysis of this study were descriptive and stochastic frontier production function. The
descriptive statistical tool comprised frequency counts, percentages and means, which were used to analyse the
socio-economic characteristics of the fluted pumpkin producers in the state. The stochastic frontier production
function was used to estimate the efficiencies of the producers.

Analytical procedures
Descriptive statistics was used to describe the costs and return of the fluted pumpkin farming households in the
study area.

The Empirical Stochastic Frontier Production Model

Following the standard assumption that farmers maximize expected profits (Zellner et al, 1966), a single equation
Cobb-Douglas stochastic production frontier was applied to the analysis of fluted pumpkin farmers in the state
specified as follows:
Qi = f(x1, βi) exp (vi - ui) (implicit) …………………………………(5)
lnQi = β0 + β1lnx1 + β2lnx2+,…,+ βnlnxn + vi-ui (explicit) ……………………(6)

For technical efficiency specification:

Where Qi = output of the i-th farm in kilogrmme (kg)
Plot(x1) = size of plot/farm (acre)
Fert.(x2) = quantity of fertilizer used (kg)
Seed(x3) = quantity of seed for planting material
Labour(x4) = total labour used (family and hired labour) in man days
OtherMat(x5)= other materials used (quantity/month)
ln = natural logarithm.
β0 = constant
β1 = coefficient to be estimated

For allocative Efficiency Specification:

Qi = revenue from sales (output price x out of the i-th farm in (kg)
cplot(x1) = cost of plot (acre)
cFert.(x2) = cost of fertilizer used (kg)
cSeed(x3) = quantity of seed as planting material (kg)
clabour(x4) = monetary value of total labour used (family and hired labour)

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cotherMat.(x5) = cost of other materials used (quantity/month)

RESULTS AND DISCUSION

Costs and Return Analysis of fluted pumpkin farming households.
Table1 explains the objective of determining the cost and return of fluted pumpkin farming households in Ilorin
metropolis. The result showed that variable cost of production was the major cost involved in the production of
fluted pumpkin by the households. They are mainly peasant farmers who rent all the equipment used for the
production which would have constituted the fixed cost such as water pump, land and tilling implements. Labour
constituted about 38.31% of the total variable cost which indicates the low level of mechanization of the farms. The
average total revenue of the farmers was ₦ 97,709 for the period under review. The revenue was entirely from the
sales of fluted pumpkin leaves. The farmers do not undertake pod production since according to them it is not as
profitable the former.

Table 1: costs and return Analysis of an average fluted pumpkin farming household in Ilorin.
Item value (₦/season) value (₦/season)
A: Revenue (output x price)
Leaf 97,709
Pod -
B: Variable cost
Seed 24,085
Fertilizer 14,000
Rent of farm plot 8,500
Labour 30,009
Others (levies, cost of sales) 1,710
Total 78,304
C: Total Average Gross Margin (A-B) 21,252
Source: Field survey, 2009.

Relative Efficiency Indices

The estimation of economic efficiency (Table 2) shows the relative efficiency indices by age category for fluted
pumpkin farming households. The farmers operated at a high level of both average technical and allocative
efficiency of 0.90% and above for all the age categories. Though, analysis revealed that farmers operated at a high
economic efficiency level, but age group 40-49 operated at 0.87% which is far below average compared to the other
groups. The results support the assertion of Kalirajan and Shand (1989), Shapiro and Muller (1977) that given a
technology to transform physical inputs into output, some farmers are able to achieve maximum efficiency up to
100% while others are technically inefficient.

Table2: Relative Efficiency indices by age category for fluted pumpkin farmers in Ilorin: Estimation of
Economic Efficiency.
Age No. of Sum of Sum of Allo. Av. Av. Allo. Eff. Av. Ecco .Eff.
category A farmers B Tech.Eff. C Eff. D Tech.Eff E (%) (%) E x F
(C/B) F (D/B)
<40 yrs 9 8.66 8.46 0.962 0.94 0.904
40-49 23 22.43 20.7 0.975 0.90 0.878
50-59 29 28.42 27.55 0.98 0.95 0.931
>60 39 38.61 35.49 0.99 0.91 0.901
Total 100
Source: Field survey, 2009.

Stochastic Frontier Models

The results of the stochastic frontier model estimated further showed that there are significant differences in the
technical, allocative and economic efficiency of the farmers in the study area. Quantity of fertilizer used and number

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of labour (both family and hired) were found to be significant factors that were associated with technical efficiency,
while cost of plot and labour were also found to be significant under allocative efficiency (Table3). The inefficiency
sources model showed that years of experience and farm size contributed significantly to the explanation of
efficiency tables of the farmers.

Table3:Result of Maximum likelihood estimate of the Cobb-Douglas frontier production functions for technical and
allocative efficiency of the fluted pumpkin farmers.
Variable per parameter estimates Coefficient Std. error t-value
A: Technical Efficiency
Constant (β0) 0.369** 0.963 0.383
Ln plot (β1) -0.522 0.228 -0.229
Ln Fert. (β2) 0.117*** 0.684 0.171
Ln Seed (β3) -0.142 0.261 -0.543
Ln Labour(β4) 0.310* 0.743 0.417
Ln Other materials (β5) 0.241 0.421 0.445
Sigma-squared (σs2 = δu2+δv2) 0.517 0.180 0.287
Gamma (γ = δu2 / δv2 0.535 0.117 0.459
Log (likelihood) (θ0) 0.150
Mean technical Efficiency 0.978
B: Allocative Efficiency
Constant (β0) 0.250** 0.559 0.447
Ln cplot (β1) 0.500*** 0.200 0.250
Ln cFert. (β2) 0.12 -NAN -NAN
Ln cSeed(β3) -0.166 0.309 -0.537
Ln clabour(β4) 0.313* 0.367 0.851
Ln cotherMat.(β5) 0.213 0.432 0.256
Sigma-squared (σs2 = δu2+δv2) 0.103 0.140 0.312
Gamma (γ = δu2 / δv2 0.900 0.232 0.243
Log (likelihood) (θ0) 0.896
Mean Allocative Efficiency 0.925
C: Estimate of the Inefficiency sources model for the farmers.
Constant (δ0) -0.678 0.153 -0.444
Age (δ1) -0.176 0.796 -0.223
Household size (δ2) -0.182 0.156 -0.117
Level of education(δ3) -0.783 0.717 -0.109
Experience(yrs) δ5 0.965* 0.971 0.994
Farm size (δ5) 0.151** 0.924 0.163
Sigma-squared (σs2 = δu2+δv2) 0.517 0.180 0.287
Gamma (γ = δu2 / δv2 0.535 0.117 0.459
Log (likelihood) (θ0) 0.150
Mean technical Efficiency 0.978
Source: Field survey, 2009.
* Significant at 1%, ** Significant at 5%, *** Significant at 10%. Other materials (e.g. miscellaneous expenses such
as levies, cost of sales, etc).

Hypotheses
Tables 3 and 4 showed that the null hypothesis which specified that inefficiency sources model do not have effects
in the use of resources is accepted. Moreso, δ = 1, = δ =2, =…, δ = 5≠0. This implies that the entire delta (δ)
estimates are not zero. It further revealed that the delta variables estimated contributed significantly to the
inefficiency of the fluted pumpkin farmers in the study area. Also, that the χ2- calculated is less than the χ2-tabulated
(table 4) indicating the relevance of the variables in fluted pumpkin production.

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Table4: The generalized likelihood ratio test for the parameter of the inefficiency sources model.
Log(likelihood) χ2 Statistics χ2 V.095 Decision
0.150 3.08 24.62 Accept Ho
Source: Field survey, 2009.

CONCLUSION
This study focused on the analysis of economic efficiency of fluted pumpkin farming households in Ilorin, Kwara
State. The findings showed that all the farmers were operating at a high technical, allocative and economic
efficiency level of 90% or more, though not at exactly 100% level. The result agreed with the findings of Ayanwale
and Abiola (2008) who found that an average fluted pumpkin farmer in Edo State of Nigeria utilized resources
below optimum level. The research therefore concluded that it is more advisable for fluted pumpkin farmers in the
study area to adopt this technology with a view to make more profit and to be more economically efficient in their
investment decision.

The results further, concluded that year of experience was found to be statistically significant at 1 per cent. The
results of the hypotheses which showed that the beta (β) are different from zero also revealed the production
variables: plot, fertilizer, labour, seed and other materials are relevant to the technical and allocative efficiency.
More so, delta (δ) values representing the farmers specific variables (years of experience, age, household size, and
level of education of farmers) are also relevant in the production system.

The inefficiency sources model showed that only years of experience and size of plot (farm size) are significant
factors. Thus it can therefore be concluded that farming experience and size of plot influenced level of inefficiency
among the producers. On the basis of the findings, the study therefore recommends that the government should
provide a conducive environment for the establishment of modern irrigation facilities for dry season farming,
encourage more citizenry, especially the youths to practice dry season vegetable farming in a bid to alleviate poverty
status and unemployment in the state and the country at large.

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Received for Publication: 14/07/2010,

Accepted for Publication: 18/08/2010

Corresponding Author
Nwauwa, Linus Onyeka Ezealaji
Department of Agricultural Economics, University of Ibadan, Ibadan, Nigeria.
Email: linusezealaji@yahoo.com

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