Effects Of Share Cropping On Cocoa Production Economics Essay

The survey investigated the effects of share-cropping on chocolate production in Ondo State Nigeria utilizing covariance analysis ; the cross sectional sample of share-cropper and non-share sharecrop farmers showed that there were significantly differences in the production engineerings of the intercepts of the production maps. The trial for the inclines besides indicated differences in the estimated maps while the homogeneousness trial proves the equations were non homogenous. Hence, the two groups can non be pooled into one production map. The consequences tend to connote that the establishment of share-cropping accounted for the difference. The fringy and mean productiveness and the input snap of production steps showed productiveness derived functions between the groups in favor of the sharecrop farmer. These derived functions are adduced to the establishment of sharecropping in the country of survey. It is therefore recommended that the establishment be encouraged and regulated by the authorities in order to achieve equity in its operation.

Keywords: Sharecropping sharecrop farmers, non-sharers, chocolate.

Ondo State, Nigeria.

Introduction

Sharecropping agreements are widely observed in developing states ( Sadoulet et Al, 1994 Reiersen 2001 ) . Research workers are seeking to place causes of their prevalence and permanency ( Sadoulet et Al, 1994 ) . They have besides been occupied with inquiry of how this contractual agreement affects resource allotment and efficiency in agribusiness ( Reiersen, 2001 ) .

In malice of a batch of theoretical and empirical plants in recent old ages, there has been small convergence in sentiments of economic experts on the establishment. The divergency has been particularly great in the apprehension of how resource allotment and production efficiency are affected by it, though, a big figure of sharecropping theoretical accounts exist: the literature has followed fundamentally two attacks to patterning such contracts ( Hayami and Otsuka ( 1993 ) .

The Marshallian analysis portrays the establishment as inefficient. The Cheungian attack argues that such a contract will non merely qualify the renter ‘s portion of the end product but besides the labor inputs to be applied on the land. Hence, productive efficiency prevails. A big figure of empirical surveies have non settled the issue as the consequence produced assorted consequences. ( Hayami and Otsuka, 1993 ) . Reiersen ( 2001 ) asserted that the two attacks could be viewed as particular instances of a more general theoretical account depending on the premises made about the landlord and renters ( parties ) involved.

Sharecropping as an economic establishment has therefore been a fruitful beginning of economic contentions ( Quibria and Rashid. 1984 ) . Conventional wisdom in the literature has assorted replies to what the kernel of the establishment is ( Chew, 1993 ) . Some bookmans identified this to be its hazard distribution features. Others view it in footings of its positive inducement consequence because of its end product sharing belongings. Yet still others consider its minimum monitoring cost ( Chew, 1993 ) .

Harmonizing to Van lair Brink ( 1995 ) , the widespread phenomenon of husbandmans leasing their cowss to nomads under a discrepancy of the sharecropping contract is a good illustration of an economic exchange based on the comparative advantages of the two production system. The nomad herds the husbandman ‘s cowss in exchange for a portion of the end products, normally specified in footings of calves and/or milk. Informational and incentive jobs are reduced under such sharecropping contracts. Another type of catching is that under which a husbandman allows the nomad to crop cowss on the harvest chaffs left after the crop when the animate beings can no longer damage the harvests, in exchange for the benefits of carnal manure ( Wade, 1992 ) .

An of import features of recent Hagiographas, on sharecropping, has been to continue a plurality of positions sing is virtuousnesss. Many strands of recent theoretical analysis have been brought to bear on the analysis of these jobs ( Otsuka and Hayami 1988. Chew, 1991 ) . In the visible radiation of the assorted contentions environing the establishment, it is just to reason that recent sophisticated theoretical accounts have been rather enlightening and hold promises for farther penetration in future. The current survey in the cocoa-belt of Nigeria is situated within the sphere of these issues.

Problem Statement

In the chocolate belt of Nigeria, the direction and cultivation of chocolate in the yesteryear was a household matter. It involved the farmer-owner devising determination about production. The beginnings of labor included the household labour pool, hired labor and exchange labor. However, the nature of agribusiness as an employer of residuary labor, the job of underemployment and unemployment in agribusiness led to alterations in the operational and cultural patterns of labour use on chocolate farms. This resulted into the debut of contractual agreement in chocolate production in the belt due to labour deficit and absentee proprietors.

Labour inaccessibility, both in quality and measure, now constitutes a major restriction in the production of chocolate in this country. More than 70 per centum of all bing chocolate farms are now in the custodies of second-generation proprietors. These inherited the farms. These new proprietors are largely absentee husbandmans ( Adegeye, 2000 ) . The consequence is that outputs are 250kg per hectare in Nigeria as compared with 400kg per hectare and 600kg per hectare in Cote vitamin D ‘ Ivoire.

The inaccessibility of household labor, high costs of hired labor, an age-ing from farm population farm labor scarceness due to rural-urban impetus and an acute signifier of absenteeism have encouraged the nutriment of the establishment of portion cropping in the chocolate belt of Nigeria. In this context sharecropping patterns therefore indicate a grade of labour mrket activity ( Mochebelele, and Winter-Nelson, 2000 ) .

There exist a big organic structure of literature that attempts to place conditions under which sharecropping is superior to alternative contractual agreements in agribusiness. Very few surveies have collected sufficient informations on resources allotment, income distribution and production engineerings to let a comprehensive trial of the alternate theories. This survey is therefore designed to analyze the effects of sharecropping on chocolate production given that the sharecropping agreement has been adopted.

Aims of the Study

The chief aim of this survey is to analyze the effects of sharecropping on chocolate production in Ondo State, Nigeria. The specific aims include to:

analyze the displacement in production parametric quantities between portions and non-sharers

gauge the fringy productiveness of the resosurces used by the groups

quantify the partial productiveness of the resources used by the husbandmans

find the productiveness derived functions of these rescources for the groups

Methodology

( I ) Area of Stduy

The survey was carried out in Ile-Oluji/Oke-Igbo Local Government Areas ( LGA ) of Ondo State, Nigeria. The province has 18 LGAs. The entire land country is about 20.595km2 ( 2,059,500 hour angle ) with a population of about 2,255,723 ( Census, 1991 ) . The province is characterized by heavy rainfall being in the rain wood. The rainy season commences in April and ends in October with an one-year rainfall of about 1,634mm. The dry season starts in November and terminates in March. The province is preponderantly agricultural. Most of the dwellers, approximately 70 per centum are husbandmans ( Akinsorotan, 2001 ) . The chief business of the people is cultivation of tree harvests with chocolate as the chief harvest. This is frequently inter-cropped with kola-nut, oil thenar, citrous fruit, plantain and bananas. Food harvests like manioc, maize, yam and veggies are besides cultivated.

Ile-Oluji/Oke-Igbo LGA, has a population of about 123,397 individuals ( Census, 1991 ) . It has an estimated land country of 500km2 It portions boundaries with Ondo-West LGA at the Eastern side Ifesowapo LGA in the Southern portion and Osun State on the Western axis. The headquarter of the LGA is at Ile-Oluji.

( two ) Method of Data Collection

A multi-stage random trying technique was used to roll up the relevant information for the survey. There are about 315 small towns in the LGA. The major towns around which the small towns bunch are: Ile-Oluji, Oke-Igbo and Bamikemo. These constitute the three trying zones in the survey. Ile-Oluji has 149 small towns environing it ; Oke-Igbo has 98, Bamikemo has 68 small towns ( Agric. Department, 2005 ) .

In each zone, four chocolate bring forthing small towns were indiscriminately selected. The selected small towns are Akinye, Lalepa, Ipoti and Sama from the Ile-Oluji axis, Lipanu, Leogun, Awo and Oluwasola were selected in the Bamikemo zone. In the Oke-igbo axis, Bolorunduro, Ago-Ajebamiro. Ago-Owode and Awopeju were selected. In each of the small towns, the list of chocolate bring forthing families was obtained. Using the list, 35 families were indiscriminately selected at an interval of 5 families. The process produced a sample size of 420 observations.

The information aggregation covered information on the socio-economic features of the husbandmans, production, end product beginning, costs, and returns, output s, ownership of farm, share-croppping agreement etc. These weresupplemented with secondary informations obtained from the green goods office of the LGA.

( three ) The usage of sharecropping agreement is expected to take to important differences in end product of chocolate responses to input and their utilizations and to engineering acceptance. This outlook amounts to proving the void hypothesis that the production map for the groups are homogenous. This trial can be carried out through covariance analysis ( Johnson, 1972 ) utilizing nonnatural production maps ( Shand and Kalirajan 1991 ) .

Model Specification

The theoretical account is by and large specified as:

3

Q = A?XB Exp ( ?xii + ??iDi +?PDP )

i-i i-I i-I j-I ……………………………… . ( 1 )

The natural log-linearized gauging equation is

LnQ = LnA + ?iLnX1 + ?2LnX2 ………………………… ?nlnXn

+XiXi + X2Xn ………………………………… + XnXn

+diDi +d D2 + d303 ?pDp

The map is a loanblend between the power ( Cobb-Douglas ) map and the exponential equation ( Halter et Al ; 1957 ) . It can exhibit non-constant fringy productiveness of increasing decreasing and negative fringy merchandises, singularly, in parts or all three at the same time. It is therefore utile in depicting input-output informations embracing all the three traditional phases of production ( Samkhayan, 1988 ) . The map besides permits variable snap of permutation over the scope of inputs. As specified In Q is a additive map of the natural logarithms of the degrees of inputs ( InXi ‘s ) , the original degrees of the inputs ( Xi ‘s ) and the location ( Dj ) and engagement ( Dp ) silent persons.

Model Estimation

To carry on the covariance analysis, the undermentioned production maps are to the estimated ( I ) Sharecroppers production map.

n 3

Qs = A?X-?i Exp ( ??iXi + ??iDj ………………………………… . ( 3 )

i-i J =i

( two ) Non-shares production map

n 3

Qjs = ??X-?i Exp ( ?djXj + ?djDj )

j-i jzi j=i …………………………………… ( 4 )

( three ) Pooled informations but with engagement silent person ( DP ) where Dp = I for partaker and 0 otherwise

3

Q = W?Xzi Exp ( ?giXj + ?SjDj + ?Dp )

J=1 …………………………… ( 5 )

3

Q = H?Xiyi Exp ( ?fjXj + ?KjDj )

j=1

Where, Q = chocolate end product ( kilogram ) , Xi = farm size ( hour angle ) , X2 = labor ( hours ) , X3 = agrochemicals ( N ) m X4 = Capital ( N ) , D1 = 1, if Oke-Igbo, otherwise = 0, D2 = 1 if Ile=Oluji, otherwise = 0, D3 = 1, if Bamikemo, otherwise = 0 and Dp = 1, if sharer, otherwise = 0. Note, nevertheless, that one of the location silent persons must be dropped ; for this econometric grounds Di is dropped in the subsequent analysis.

Result and Discussion

The four specified production maps were estimated by the OLS techniques. The estimations obtained were so employed in the analysis of covariance to analyze the relationship among the estimated equations.

Table 1: Equations, Sum of Squares and Mean Sum of Square

Equation Sum of Squares Degree of Freedom Mean Sum of Squares RSSS-1 2.5894 254 0.0098

RSSNS-2 3.6433 137 0.0266

RSSDP-3 7.1321 401 0.0183

RSS ( S+NS ) -4 7.3441 402 0.0178

Beginning: Data Analysis, 2006

Niobium: S = Sharecroppers, NS = Non-shares, Dp=pooled informations equation with engagement silent person, and S = NS = pooled informations equation without engagement silent person.

Table 1 contains the estimations from the estimated maps. These values are used to prove the void hypothesis that the production map for the two groups are homogenous, the parametric quantities and/or statistics for the trial are contained in Table 2.

Table 2: Analysis of Covariance Table

Item SS D.f. MSS F-ratio

S4 6.2327 391 0.0159 5.6531

S3 0.8994 10 0.0899

S2 7.1321 401 0.0178 11.9101

S1 0.2120 1 0.2120

Beginning: Data Analysis, 2006.

S4 = RSSs-1 + RSSNS-2

S3 = RSSDP-3-S4

S2 = RSSDP-3

S1 = RSS ( S+NS ) -4 – RSSDP-3

The consequences of Table 2 were used to cipher the F-statistics needed to prove differences in ( I ) . The intercepts of the maps presuming that the inclines are changeless, ( two ) . The inclines of the maps for the groups and in ( three ) . The complete relationships between/among the group i.e. homogeneousness trial. The deliberate F-statistics and tabulated F-values for the trials are presented in Table3.

Table 3: The Test Statistics for the Estimated Equations

Test F-cal D.f. F0.05

Homogeneity 5.8102 12,391 1.75

Intercept 11.9101 1,401 3.84

Slope 5.65411 2,391 3.00

Beginning: Data Analysis, 2006

From, table 3, the intercept trial, the F-cal of 11.9101 is greater than the F-tab of 3.84 at 5 % degree The void hypothesis of no important difference in the intercepts of the estimated maps is rejected. The credence of the alternate hypothesis confirms the being of a important difference in the intercepts. The trial for the inclines besides indicates that there are important differences in the inclines of the estimated maps. These consequences tend to connote that the establishment of share-cropping has altered the factor-product relationship of the partakers.

The homogeneousness trial proves that the equations are non homogenous over-all. Hence, the two groups can non be pooled into one production map. The two maps are to be considered individually.

Table: Consequences of the Estimated Separate Production Function for the Groups

Shares Non-sharers

Variable Parameter t-value Parameter t-value

InX1 0.7385** 2.4511 0.6124** 2.3691

( 0.2585 )

InX2 0.2107*** 3.3444 0.2365** 2.5106

( 0.0630 ) ( 0.0942 )

InX3 0.6823*** 4.1578 0.5764*** 3.6854

( 0.1564 )

InX4 0.1916** 2.2488 0.1683* 1.8373

( 0.0852 ) ( 0.0916 )

X1 -0.0372** 2.0108 -0.241* 1.9280

( 0.0185 ) ( 0.0125 )

X2 -0.0069** 2.4613 -0.0034** 2.1250

( 0.0028 ) ( 0.0016 )

X3 -0.0038*** 4.2222 -0.0022** 2.7500

( 0.0009 ) ( 0.0008 )

X4 -0.0115 1.6647 -0.0127* 1.3313

( 0.0069 ) ( 0.0076 )

D2 0.3243** 2.1364 -0.2986 1.3313

( 0.2243 )

D3 0.3068 1.0414 0.3517** 1.9924

( 0.1765 )

Constant ( K ) 5.3264 3.4382

Beginning Data Analysis, 2006

N = 265 N = 148

R-2 = 0.7047 R-2 = 0.6064

F = 64.7153 F = 23.6461

***Significant at 1 %

** Significant at 5 %

* Significant at 10 %

In the following phase, hence, the separate production maps for the groups are considered. The consequences of the equations are presented in Table 4. A comparative analysis

is carried out in footings of the important variables, their degrees of significance, the adjusted R-squared ( R2 ) , fringy and mean productiveness of the inputs, and snap of production. Table 4 tends to bespeak that the parametric quantities for the partakers are much more important than for non-sharers in most instances.

Table 5. Estimated Input Elasticity of Production for the Groups

Input Sharers Non-sharers Derived functions

Land 0.9614 0.7238 0.2374

Labour 4.2552 1.3383 29.169

Agrochem 12.1116 7.8328 4.2788

Capital 34.1701 30.2436 3.9265

Beginning: Data Analysis, 2006

Table 5 indicates that the snap of production with regard to all the inputs is higher for partakers than non-sharers. The snap of production derived functions has a scope of 0.2374 to 4.2788. A significant difference is observed in the usage of labor ( 2.9168 ) , ( 3.9265 ) and agrochemicals ( 4.2788 ) . All the snap value are greater than one except land. Their usage is therefore elastic.

Table 6: Estimated Marginal Productivity for the Inputs for the Groups

Input Sharers Non-sharers Derived functions

Land 314.4573 172.1918 142.2655

Labour 14.2285 4.5429 9.6856

Agrochem 7.6865 2.6123 5.0745

Capital 22.6671 14.0486 8.6195

Beginning: Data Analysis, 2006

Table 6: tends to demo that the fringy productiveness of the inputs is much higher partakers than non-sharers. The derived functions range between 5.0742 and 142.2645 in favor of the partakers. These differences are adduced to the establishment of sharecropping in the survey country.

Table 7: Estimated Average Productivity of the Inputs for the Groups

Input Sharers Non-sharers Derived functions

Land 327.0827 237.8997 89.1830

Labour 3.3438 3.3945 -0.0507

Agrochem 0.6346 0.3335 0.3011

Capital 0.6634 0.4645 0.1989

Beginning Data Analysis, 2006

The estimations in Table 7 follows a similar tendency as those of fringy productiveness. The partakers have a higher mean merchandise with regard to land, agrochemical and capital. However, labour has the opposite consequences in that non-sharers have a displacement border over partakers in this instance. The difference is rather little at about 0.1. It can be assumed that they have equal AP in the usage of their labor. The mean productiveness derived function has a scope of -0.0507 to 89.18330.

Decision

Overall, the production map of the partakers accounted for about 71 % of the fluctuation in end product of chocolate, while this about 61 % for non-sharers utilizing their adjusted R2 ( R2 ) .

A derived function of approximately 10 % fluctuation in end product can therefore be assumed in favor of the sharecrop farmer. It is observed that most of the coefficients of the production maps are statistically important at different degrees. Most besides have theoretically acceptable magnitudes and marks.

On the surface hence, the establishment of sharecropping tends to change the product/factor relationships in productivies for the sharecrop farmers. It can therefore be stated that it has been of benefit to the partakers every bit good as the society. Both and sharer-owners and share-tenants must hold benefited from the agreement though this facet of the strategy is non covered in this survey. There is the demand for farther research on the allotment of benefits and its quantification of the mechanism of decision-making procedure involved.