(Fugs) Through Agro-Processing and Market Accessibility in Adamawa State, Nigeria

Full Length Research Paper

Role of Fadama III in improving the income of Fadama User Groups (FUGs) through agro-processing and market accessibility in Adamawa State, Nigeria

M. R. Ja’afar-Furo 1*, M. K. Bello 2, S. I. Mshelia 2 and D. M. Hammanyaji 2

1Department of Agricultural Economics and Extension, Adamawa State University, PMB 25, Mubi, Yola, Adamawa State, Nigeria. 2Adamawa State Fadama Co-ordination Office (ADSFCO), C/o Adamawa Agricultural Development Programme, P. O. Box 780, Yola, Adamawa State, Nigeria.

Accepted 4 December, 2012

This study was conducted to evaluate the income status of Fadama III beneficiaries in Adamawa State, Nigeria, with the ultimate aim of determining the effects of the project on Fadama User Groups (FUGs) in the month of June, 2011. A total of six (6) Local Government Areas (Fufore, Girei, Demsa, Mayobelwa, Maiha and Madagali) believed to have established FUGs with functional agro-processing enterprises were purposely selected from the three (3) senatorial districts, SE, (two from each SE) of the State. Data were collected from the FUGs by the use of questionnaire, in addition to oral interviews and group discussions. Results indicated that a larger proportion of the projects participating in adding value to agricultural commodities were concentrated in Madagali LGA, with male membership accounting for the majority in the FUGs. Gender wise, age group of 18 to 39 years recorded the highest in both sexes. The most popular choice of economic venture among the FUGs was maize/corn/rice processing machines. While collectively, the FUGs recorded 10.54% increase in income from the sales/service rendered in terms of value addition on agricultural commodities, about 15.00% were said to have access to market information using modern methods. Of the constraints identified, inadequacy of funds for purchase of inputs, minimal markets linkages and intra-group conflict of interest accounted for the most worrisome among the FUGs. The study recommends massive enlightenments of the FUGs on appropriate measures for conflict resolutions, rational utilization of projects’ resources and accountability, and diverse avenues for sourcing markets for their products, among others.

Key words: Adamawa, agro-processing, Fadama, Fadama User Groups (FUGs), projects, value-addition.

INTRODUCTION

Agriculture products processing (Agro-processing) is a of value addition and marketing of farm outputs. In line facet in the agriculture value chain that entails addition of with this development, Ja’afar-Furo et al. (2011) stressed value to agricultural commodities with the ultimate that developing countries that intend to rapidly transform intention of increasing the economic value. Various their agriculture would have to massively embark on governments of developing economies now adopt pro- holistic food system which involves processing and grammes which are formulated, taking much cognisance clearly defined channels of appropriate marketing in order

**Corresponding author: E-mail: [email protected], [email protected] 130 J. Dev. Agric. Econ.

to provide sustainable avenues for income generation for unit of the entire Fadama project composed of beneficiary members the rural farmers. In Nigeria, several programmes have of a community that is well organized in order to draw some counterpart fund with the ultimate purpose of empowering them. been fielded by the federal government in the past with Fadama III specifically encourages formation of associations which the perfect hope that, specifically, the rural farmers and serve as fund disbursing unit in order to minimize leakages and the poor would immensely benefit from such laudable misappropriation of such moneys given to user groups. intentions in terms of income generation. However, these could not yield much desired results. For instance, Ugoh and Ukpere (2009) appropriately appraised the trend of Method of data analyses policies on poverty alleviation programmes in Nigeria, highlighting both the successes and weaknesses. The The data were analysed using descriptive statistics which include authors mentioned poor targeting mechanisms, failure to the application of percentages and frequency distribution, and gross focus on the poor, programme inconsistencies, poor margin analysis. The latter is reported to be appropriate in determining of profit of enterprises with minimal fixed cost. And as implementation and corruption as the major lapses, and most of the projects had barely commenced operations, this tool concluded that the entire programmes were unable to was found to be suitable. involve the beneficiaries in their planning stages and implementations. From the Nigeria’s independence to date, the names are endless. These include, Operation RESULTS AND DISCUSSION Feed the Nation (OFN), Green Revolution, War Against Indiscipline (WAI), Directorate of Food Roads and Rural Distribution of registered FUGs and those contacted Infrastructure (DFFRI) to Nigerian Agricultural Land in the study area Development Authority (NALDA) and presently,Fadama

Programmes. It could be observed from Table 1 that about 138 FUGs Of the three (3) phases of the Fadama Programmes, were officially registered with the Fadama programme in Fadama III was established in order to address the the entire study area at the time of this survey. Of these, inadequacies observed in Fadama I and II. The major a larger proportion (34.78%) was concentrated in Project Development Objective (PDO), among others, is Madagali LGA. This was followed by Girei LGA with to uplift the incomes of users of rural land and water 16.66%. Demsa, Maiha, Mayobelwa and Fufore LGAs resources on a sustainable basis by ensuring that about accounted for 15.22, 14.49, 13.77 and 5.08%, 75% of the Fadama User Households (FUHs) have respectively. increased their incomes by not less than 40% by 2013. Similarly, the agro-processing enterprises that were This study, The Role of Fadama III in improving the contacted and responded positively were more (25.00%) income of FUGs through agro-processing and market centered in Madagali LGA. Demsa and Mayobelwa LGAs accessibility in Adamawa State, Nigeria, is an attempt to recorded 20.00% each, with 15.00% situated in Maiha evaluate the performance of the project in line with its LGA. Fufore and Girei LGAs had 10.00% each. The laudable objective taking account of the constraints that lukewarm responsiveness of the FUGs to the researchers may serve as huddles towards attaining same. had to do with their inability to receive input support from

the Fadama project to some, at the time of this study, on

METHODOLOGY one hand, and the poor record keeping on the part of the FUGs on the other. The issue of input support was The study area suffered specifically by FUGs participating in poultry and fishery production. The result is shown in Table 1. The study covered the 20 LGAs in Adamawa State benefitting from the Fadama III Programme, out of the existing 21. These include Fufore, Girei, Gombi, Hong, Demsa, Ganye, Mubi-north, Mubi- Selected socio-economic characteristics of members south, Maiha, Michika, Madagali, Lamurde, Jada, Toungo, Guyuk, of the FUGs Yola-north, Yola-south, Shelleng, Mayobelwa and Song. In order to determine the categories of members’ participation or benefitting from the programme, some Sampling procedure and data collection socio-economic variables of the FUG members were observed. These were the age and gender. The findings Based on the senatorial zones in the State, this study area was in Table 2 show that males were the Marjory (53.52%) in divided into three (3) groups. Two (2) LGAs known to have more established Fadama Community Associations (FCAs)/FUGs were the FUGs, with females occupying about 46.48% of the purposely selected from each zone, thereby making the number of groups’ formation. Also, indicated in Table 2 are the age six (LGAs) that were involved in the State. These LGAs were groups. The age range of 18 to 39 years accounted for Fufore, Girei, Demsa, Mayobelwa, Maiha and Madagali. Data were the highest (52.20% for males and 50.00% for females) in collected by the questionnaire supplemented with oral interview and both gender, signifying that youths formed the majority in group discussions with the members. Records of transactions of projects were consulted where necessary. An FUG is the functional adopting Fadama III programmes. This is in agreement Afar-Furo et al. 131

Table 1. Distribution of registered and contacted FUGs in this study area.

LGA Actual registered projects of FUGs FUGs with Fadama contacted Demsa 21(15.22) 04(20.00) Fufore 01(5.08) 02(10.00) Girei 23(16.66) 02(10.00) Madagali 48(34.78) 05(25.00) Maiha 20(14.49) 03(15.00) Mayobelwa 19(13.77) 04(20.00) Total1 38(100) 20(100)

Values in parentheses are percentage of total. Source: Field survey (2011).

Table 2. Selected socio-economic characteristics of members machines as the most (80.00%) popular among the of the FUGs. FUGs, groundnuts processing (15.00%) and vegetable processing (5.00%). Other enterprises participating in Variable Frequency Percentage (%) poultry, piggery and fisheries were either not provided Gender with inputs support by the Fadama III project or not parti- Male 205 53.52 cipating in processing their commodities but only stopped Female 178 46.48 at production stage. The results are shown in Table 3. Total 383 100.00 The limited number of agro-processing enterprises could be attributed to the skills in the operation of machines by Age (years) the members which is absolutely minimal, and also the Male limited options of enterprises fielded by the Fadama III 1-17 04 1.95 projects. Further investigations revealed that agro- processing in the areas of milk, fruits and corn (for 18-39 107 52.20 example, popcorn) were desired by the members but 40-59 88 42.92 were said not to be covered/included in the project. 60 and above 06 2.93 Total 205 100.00 Gross margin of the agro-processing enterprises Female since inception 1-17 05 2.81 18-39 89 50.00 In an effort to assess the profitability of the enterprises 40-59 67 37.64 operated by the FUGs, a gross margin analysis of the 60 and above 17 9.55 entire projects was made. A total sum of five (5) million Total 178 100.00 seven hundred and sixty six thousand one hundred and seventy six naira fifty kobo only (N5, 766,176.50) was the Source: Field Survey (2011). gross receipts accrued to the entire enterprises within the time in consideration. Of this amount, Fadama’s contribution was 48.22% whereas 24.03% was FUGs’ with Gwary et al. (2011) report in the state. counterpart funding based on the available records given. Revenue from sales of groundnut oil, maize/corn/rice bran, groundnut cake and processed vegetable had Types of agro-processing enterprises of the FUGs 12.81, 10.59, 2.76 and 1.59%, respectively. The total that were evaluated variable costs was two million fifty five thousand four hundred and twenty nine naira only ( ₦2,055,429.00) for Globally and more especially among the developing the whole enterprises. The three (3) notable items of economies, more commitment in agro-processing and costs were purchase of groundnuts as input (54.49%), marketing are being emphasized as facets of concern in diesel for the machines (16.20%) and operator agriculture value chain as a way of ensuring sustainable services/labour (10.64%). income generation among rural farmers (AusAID, 2000; The gross margin was put at one million two hundred Saio, 2009; Rau, 2009). This study attempted to and fifty nine thousand seven hundred and ninety naira document the viable enterprises among the FUGs. Three only ( ₦1,259,790.00). The percentage increase in income (3) major agro-processing enterprises were identified in as a result of agro-processing or value addition on this survey. They include maize/corn/rice processing agricultural commodities was 10.54%. Given a ceiling of 132 J. Dev. Agric. Econ.

Table 3. Types of the enterprises of the FUGs that were assessed.

Type of enterprise Frequency Percentage (%) Maize/Corn/Rice processing 16 80.00 Groundnut processing 03 15.00 Vegetable processing 0 5.00 Total 20 100.00

Source: Field Survey (2011).

Table 4. Gross margin of the enterprises since inception.

Criterion Unit value Quantity (N) Total value (N) Percentage (%) Gross receipts Fadama’s contribution 5,761,176.50 48.22 FUGs’ contribution 2,871,650.00 24.03 Sales of G/nuts oil 1,530,500.00 12.81 Sales of G/nuts cake 329,000.00 2.76 Sales of maize/rice/ corn bran 1, 265,210.00 10.59 Processed vegetable 190,500.00 1.59 Total GR (TGR) 11, 948,036.00 100.00 Variable Costs (VC) Diesel 4, 500/Jerrycan 74 333,000.00 16.20 Engine ils 1750/Gallon 56 98,000.00 4.77 Firewood 43,400.00 2.11 Water 15/Jerrycan 2444 36,660.00 1.78 Empty sacks 30/Sack 61018,300.00 0.89 G/nuts 10, 000/Bag 112 1, 120,000.00 54.49 Rent 44,700.00 2.17 Operator service/ labour 218,600.00 10.64 Repair of machines 107,060.00 5.21 Transportation 35,700.00 1.74 Total VC (TVC) 2, 055,420.00 100.00

Gross Margin (GM) = GR (iii-vi) – TVC = 3, 315,210 – 2, 055,240 = 1, 259,790

Source: Computed from field data (2011).

20.00% increment by the end of the programme, the should be maintained to ensure compliance by the FUGs. value obtained (10.54%) at the period of this study could The findings are indicated in Table 4. Ja’afar-Furo et al. be said to be on the appropriate track. However, for this (2011) earlier documented similar findings of profitability track record to be sustained, strict monitoring measures among small-scale enterprises participating in agro- processing in the state. parameters. Results on Table 5 show that about 75.00% of the FUGs sold their agricultural products at the immediate local market, 50.00% sold same at the projects’ sites, Location of markets and sources of markets 10.00% at the state capital. This scenario is indicative of information for the FUGs ignorance on the part of the FUGs towards market information. Also indicated in Table 5 are the sources of For the appropriate determination of the level of access to market information by the FUGs. About 90.00% marketing of agricultural products and access to market access market information through contact with information by the FUGs, data were collected on these individuals within their domain. Marketing information Afar-Furo et al. 133

Table 5. Distribution of FUGs based on location of markets and source of market information in the study area (n:20).

Percentage of total Item Frequency enterprises (%) Location of markets Products sold at local markets 15 75.00 Products sold at state capital 02 10.00 Products sold outside state 00 00.00 Products sold enterprise sites 10 50.00

Access to market information Through contact with individuals 18 90.00 Through the radio 03 15.00 Through the television 01 5.00 Through advisory services 00 00.00

Source: Field survey (2011).

through radio and television accounted for 15.00 and neces-sitating the FUGs to loan such by-products to 5.00%, respectively. No FUG received information on members. This later turn out to be bad debt. The group marketing of agricultural products through the advisory strength or formation which is supposed to be an impetus services as claimed. The implication of the above finding for cooperation, growth and development now became a is that modern methods of accessing information among source of conflict among the groups and members of the FUGs were basically minimal. This will definitely diverse interests. bring some setbacks on their revenue generation and by Other constraints reported include minimal skills for extension their income. maintenance of machines and equipment by the members (40.00%), unavailability of storage facilities (40.00%) and record keeping which was viewed as setback (40.00%). Constraints experienced by the FUGs in this study Also, experienced by the FUGs were the problem of area transport (35.00%), unavailability of spare parts for machines (20.00%) and some Fadama III projects were In spite of the marginal success recorded in terms of the conflicting with group interests (20.00%). The entire result increment in income generation by the FUGs, they still is shown in Table 6. For the effective delivery of Fadama operate amidst several constraints. Prominent among III objectives, these constraints need to be taken into those reported were the inadequacy of funds for consideration seriously. purchase of inputs (75.00%), inadequacy of market linkages (75.00%) and intra-group conflicts of interest (65.00%). There could not have been any reason for the CONCLUSIONS AND RECOMMENDATION FUGs to get starved of resources for procurement of inputs as these inputs support received were for revolving Based on findings of this survey, it could be concluded purposes. However, further investigation revealed that that the FUGs have had an appreciable increase in members take loan from these funds, moneys which income from the sales/services rendered in terms of were very difficult to be returned. Also, misappropriation value addition on agricultural commodities. However, of resources as a result of over invoicing by individuals access to market information by same had been minimal. making purchases, and collusion among members with Majority of the members of the FUGs were found to be common interest to cart away FUGs’ funds were some males within their youthful age. Also, the FUGs were reasons given as leading to the deflation of their operating amidst several constraints which need to be accounts. addressed if remarkable success is to be achieved by the Further, inability of identifying markets for products and end of the lifespan of the programme. The study by-products was commonly reported. This was more recommends as follows; pronounced among the FUGs processing corn, maize or rice for the communities. 1. Massive enlightenment seminars on group cooperation The by-products (grain bran) collected in place for and conflicts resolution among the members of the FUGs payments have no market in the rainy seasons as should be embarked upon, in order to foster peaceful co- livestock can have access to green grasses, thereby existence within the groups; 134 J. Dev. Agric. Econ.

Table 6. Distribution of FUGs according to constraints experienced in this study area.

Constraint Frequency Percentage (%) Intra-group conflict of interest 13 65.00 Some Fadama projects conflict with group interest 04 20.00 Record Keeping is viewed as setback 08 40.00 Inadequacy of funds for purchase inputs 15 75.00 Inadequacy of market linkages 15 75.00 Minimum skills for maintenance of machines and equipment 08 40.00 Unavailability of spare parts for machines 04 20.00 Unavailability of storage facilities 08 40.00 Problems of transportation 07 35.00

Source: Field survey (2011).

2. Henceforth, Fadama III projects should be demand- ACKNOWLEDGEMENTS driven (that is, based on community’s immediate needs) in the communities rather than by design by the The Fadama III Development Project Office, Yola, programme. In other words, the projects should be based Adamawa State, Nigeria, deserves thanks for partly upon the communities’ needs. funding this study, and commendations for the desk 3. As record keeping is being viewed as setback by the officers of the various LGAs involved for collection of FUGs instead of serving as checks and accountability, re- data. orientation workshops/seminars should be organized by the programme for the members in order to understand the significance of such aspect of the project. REFERENCES 4. The wrong perception by the members of FUGs that Australian Agency for International Development, AusAID (2000). the project’s funds are members’ share of the national Income Generation for the Rural Poor: The Australian Aid cake should seriously be addressed. This stemmed from Programmes for Rural Development Strategy. National Capital the idea of collecting loans from the projects’ purse Printers, Australia. p. 16 without repaying. Gwary MM, Kwaghe PV, Ja’afar-Furo MR, Denis A (2011). Analysis of Entrepreneurial Agricultural Activities of Youths in Michika Local 5. The essence of adding value to the agricultural Government Area of Adamawa State, Nigeria. J. Dev. Agric. Econ. commodities is to increase the economic value of the 3(3):91-97 products and by extension the income generation of the Ja’afar-Furo MR, Bello K, Sulaiman A (2011). Assessment of the FUGs. However, if appropriate marketing is deficient, Prospects of Value Addition among Small-Scale Rural Enterprises in Nigeria: Evidence from North-Eastern Adamawa State. J. Dev. Agric. then gross setback would be the outcome. In this regard, Econ. 3(3):144 -149 the FUGs need absolute education in this direction. Rau M (2009). The Role of Agriculture and Farm Household 6. For the efficient operation of the projects’ machines Diversification in the Rural Economy of Germany. Trade and and optimum functioning, few members should be Agriculture Directorate. p. 28 Saio K (2009). Value Chain Analysis for the Development of Food appropriately trained on minor or routine maintenance in System. In: Mado T. and Saio K. Value Chain Analysis for the order to ensure adequate sustainability. Development of Food Systems and Innovative Agro-Based Industry 7. FUGs should be advised to liaise with service in Africa. Published by Smartprintwerk, Valenzuela, Metro Manila, providers to ensure that locally manufactured machines Philippines. p. 1. Ugoh SC, Ukpere WI (2009). Appraising the Trend of Policy on Poverty are purchased for availability of spare parts in order to Alleviation Programmes in Nigeria with Emphasis on a National ensure continuity. Poverty Eradication Programme (NAPEP). Afr. J. Bus. Manage. 8. As several FUGs experienced inadequacy of 3(12):847-854 marketing of products, relevant storage facilities should be incorporated into inputs support for projects in order to prolong the shelf life of the unsold products. 9. Finally, in order to solve the problem of transportation experienced among FUGs, vehicles, depending on the financial strength of the projects should be part of the inputs support so that their movements could be easily facilitated to improve productivity.