Artech Journal of Research Studies in Agricultural Sciences (AJRSAS) Volume, 2, Issue 1, 2020, Pages: 7-11 ISSN: 2523-5494

Economic Analysis of Garcinia afzelii (Bitter Kola) Marketing in Ondo State, Nigeria

1J.O. Ijigbade and 2S.O.W. Toluwase 1Department of Agricultural Technology, Rufus Giwa Polytechnic, Owo, Ondo State, Nigeria 2Department of Agricultural Economics and Extension Services, Ekiti State University, Ado-Ekiti, Ekiti State, Nigeria

Abstract: This study investigates the economic analysis of Garcinia afzelii (Bitter kola) in Ondo State, Nigeria. Data were collected from 120 respondents through a multistage sampling procedure using a structured questionnaire. Descriptive statistics, gross margin and multiple regression analyses were employed to analyse the field survey data. The Total Variable Cost (TVC) and depreciation cost on fixed inputs were 17,782.55 and x685.57, respectively per marketing cycle, average total cost of bitter kola per marketing cycle was estimated to be x18,468.12, while the average total revenue of x27,450.00 and net income of x8,981.88 with a capital turnover of 1.49 were realizable during a marketing cycle. The regression result showed that the coefficients were negative at 5% level of significance, implying that the purchasing cost, packaging cost and transportation cost of Garcinia kola have negative correlation with the revenue and profit of the product in the study area. On the other hand, marital status, household size, selling price and marketing experience were positive and statistically significant at the 5% level of significance. The study identified problem of storage facility, high cost of labour and seasonality of bitter kola as well as absence of organised market as major challenges facing the bitter kola marketers and therefore recommends policies interventions by government and non-government agencies in specific areas such as storage facilities and organised market that will improve the enterprise in order to reduce the problem of unemployment in the study area.

Key words: Garcinia afzelii, bitter kola, economic analysis, marketing cycle, unemployment

INTRODUCTION additional income through collection and marketing (Aiyelaagbe et al., 1996). Also, where there is decline in Garcinia afzelii (Bitter kola)is an economic and employment opportunities from traditional industries, highly valued nut-bearing tropical tree available in large workers seeking alternative sources of income, often turn quantity in Nigeria. It exists as a multipurpose tree crop in to the collection of the product from the nearby forest the home gardens of Southern Nigeria and produces (Adepoju and Salau, 2007). edible and medicinal seeds which are widely consumed The seeds are chewed to suppress headaches, (Aiyeloja and Ajewole, 2006). It is among the few commercial Non-Timber Forest Products (NTFPs) that laryngitis, bronchitis, malaria and gonorrhea have several uses, the most important being chewing stick (Ijomone et al., 2012). The seed extracted is used as a and medicinal (Onyekwelu et al., 2015). The trees are cure for various types of inflammation or liver cirrhosis, abundant in densely populated areas of natural and while dried ground kernels can be mixed with honey to secondary forests where the predominant land-use system prepare a traditional paste against cough (Adebisi, 2004; is tree-crop plantation farming. The major places where Aiyeloja and Ajewole, 2006). The kernels also play an the crop is found growing wild are forest reserves and free important role in traditional ceremonies, e.g., celebration areas of the rain forests or either planted or conserved on of a childbirth, marriage or chieftaincy. Offering the seeds farms of oil palm and cocoa yam plantations (Adebisi, is considered as an act of hospitality and used to welcome 2004; Pribyl et al., 2017). visitors (Iwu, 1993). Bitter kola nuts can be The species is sometimes referred to as a “wonder appreciated as a snack to be paired with beer or plant” because each of its parts can be used as medicine. palm wine (Adedokun et al., 2018). In the brewing The most valued product is the seeds, commonly chewed by both rural and urban populations to avoid and treat industry, the seeds can successfully substitute hops. gastric problems or simply for their typical astringent taste Due to the species’ dense crown, Garcinia kola is also (Babalola and Agbeja, 2010). promoted and utilized as a shade tree in cocoa In many areas, rural populations largely depended on agro-forestry systems or homegardens as well as a local forest resources such as Garcinia kola to provide windbreaker (Onyekwelu et al., 2015).

Corresponding Author: J.O. Ijigbade, Department of Agricultural Technology, Rufus Giwa Polytechnic, Owo, Ondo State, Nigeria

Citation: Ijigbade, J.O. and S.O.W. Toluwase, 2020. Economic analysis of Garcinia afzelii (Bitter kola) marketing in Ondo State, Nigeria. Artech J. Res. Stud. Agric. Sci., 2: 7-11.

© Artech Journals Artech J. Res. Stud. Agric. Sci.

Marketing of Garcinia kola starts from the point of State namely, North, Central and South while the second production. After maturation, the fruits of bitter kola is stage involved a purposive selection of two LGAs from allowed to drop and then gathered by children and each of the senatorial district and hence a total of six women. This collection was from trees growing in Local Government Areas (LGAs) comprises of Okitipupa, plantations of cocoa, kola, etc. or from trees in the wild or Odigbo, Akure South, Ifedore, Owo and Akoko growing on fallow land. The processing system of bitter Northwest LGAs were selected based on the prominence kola is very simple; the fruits are collected and the nuts of Garcinia kola in the area. The third stage involved a extracted, washed and stored for later sale. After purposive selection of 2 towns/villages in each of the 6 processing, the marketing of the nuts starts from the selected local government areas, making 12 producers (farmers or wild collectors) who sell in baskets towns/villages in all. In the final stage, 10 respondents and basins to the village merchants and wholesalers. The were randomly selected per town/village making a total of village merchants buy from the producers or collectors 120 respondents in all. and sell to the wholesalers who transport to other areas and distribute to the retailers at a given price Methods of data analysis: Data collected were subjected (Adedokun et al., 2018). to descriptive statistics, budgetary and regression analysis. Descriptive statistics such as frequency distribution, Objectives of the study: The overall aim of the study is means, charts and percentages were used to analyse the to investigate the economic analysis of Garcinia kola socio-economic characteristics of the respondents. marketing in Ondo State. The specific objectives of the Budgetary (Gross margin) analysis was used to evaluate study are to: costs and returns on Garcinia kola enterprise by the respondents. Gross margin will be mathematically C Describe the socio-economic characteristics of expressed as: Garcinia kola marketers in Ondo State C Examine the costs and returns associated with GM = TR - TVC Garcinia kola marketing in the study area Where: C Identify factors affecting Garcinia kola marketing in TR = P×Q the study area GM = Farm Gross Margin C Identify the constraints to Garcinia kola marketing in P = Market price of output per kg the study area Q = Quantity of output produced, processed or sold by ith Garcinia kola marketer per annum MATERIALS AND METHODS Cj = Unit price of the variable input j incurred by ith Garcinia kola marketer Study area: This study was carried out in Ondo State Xj = Quantity of variable inputs j used by ith Garcinia Nigeria. The State lies between latitudes 5º45' and 8º15' kola marketer north of the equator and 6º00' east of the Greenwich m = Number of variable inputs used by ith Garcinia meridian. The state lies entirely within the tropics with a kola marketer population of 3,441,024 and land area of 15,500 km2. It is bounded in the North by Ekiti State, in the East by Edo Again, multiple regression was used to determine the and Delta States, in the West by Ogun and Osun States factors affecting the profitability of Garcinia kola and in the South by Atlantic Ocean. There are three marketing in the study area. The implicit function is presented as follows: agro-climatological zones in the state, namely, the mangrove forest in the South, the rain forest in the Y = f(X , X , X , X , X , X , X , X , X , U ) central and the derived Savannah in the North. 1 2 3 4 5 6 7 8 9 i Geo-morphologically, Ondo State composed of low lands Where: and rugged hills with granites outcrops in several places. Y = Returns to Garcinia kola marketing (x) The state experience tropical climate with two distinct X1 = Purchasing cost of Garcinia kola (x) seasons which are the rainy season (April to October) and X = Cost of packaging (x) the dry season (November to March). The temperature 2 X3 = Marital status ranges between 21 and 29°C throughout the year, while X = Household size the humidity is relatively high and the annual rainfall 4 X5 = Experience (years) varies from 1,150-2,000 mm. The main cash crops are X6 = Access to credit (yes = 1, no = 0) cocoa, cassava, oil palm, rubber and non-timber forest X7 = Selling price (x) products such as Garcinia kola and Irvingia gabonesis. X8 = Transportation cost (x) X9 = Educational qualification Data and sampling techniques: Primary data was used Ui = Error term and a multistage sampling procedure was employed to select respondents for the study. The first stage involved The following production functions were fitted to the purposive selection of three senatorial districts from the model:

8 Artech J. Res. Stud. Agric. Sci.

Linear function: Y = b0 + b1X1 + b2X2 + b3X3+ Table 1: The socio-economic characteristics of bitter kola marketers in

b4X4+ b5X5 + b6X6 + b7X7 + b8X8+ b9X9+ Ui the study area Variables Frequency Percentage Age Semi-Log: Y = b0 + b1logX1 + b2logX2 + #30 34 28.30 b3logX3+ b4logX4+ b5logX5 + b6logX6 + b logX + b logX + b logX + U 31-40 37 30.80 7 7 8 8 9 9 i 41-50 41 34.20 $ 51 8 6.70 Double-Log: Log Y = b0 + b1logX1 + Gender b2logX2 + b3logX3+ b4logX4+b5logX5 + Male 48 40.00 b6logX6 + b7logX7 +b8logX8+ b9logX9+ Ui Female 72 60.00 Marital status Single 26 21.67 Exponential function: Log Y = b0 + b1X1 + Married 94 78.33 b2X2 + b3X3+ b4X4+ b5X5 + b6X6 + b X + b8X8+ b X + U Educational status 7 7 9 9 i No formal school education 15 12.50 Primary school education 37 30.83 RESULTS AND DISCUSSION Secondary school education 51 42.50 Tertiary school education 17 14.17 Socio-economic characteristics: Results from the Sources of Garcinia kola Own farm 7 5.80 socio-economic characteristics in Table 1 revealed that Hired farm 12 10.00 majority (93.3%) of the respondents were below the Processors 23 19.20 age of 51 years. This indicates that majority of the Natural forest 10 8.30 Wholesalers 68 56.70 Garcinia kola marketers are still in their economically Access to credit active and productive years. This study is in line with the Yes 78 65.00 findings of Adedokun et al. (2018). Result also showed No 42 35.00 Household size that majority (60%) of the bitter kola marketers were #5 89 74.17 female households which shows the dominance of female 6-10 28 23.33 in the business. The reason for this may be due to the fact >10 3 2.50 Experience that females are more interested in foodstuff trading with <5 22 18.33 less tedious task. The result of majority (78.30%) of the 5-10 80 66.67 respondents being married would enable the marketers to 11-20 16 13.33 >20 2 1.67 have access to higher family labour, which agreed with Quantity of Garcinia kola purchased (kg) the findings of Babalola and Agbeja (2010). The result #10 75 62.50 revealed that majority (87.50%) of the marketers had 11-20 26 21.67 21-30 9 7.50 formal education. High level of education would enable 31-40 6 5.00 them to adopt better marketing innovations that will 41-50 3 2.50 improve their businesses economically. Result further $50 1 0.83 revealed that majority (56.70%) of the respondents Field survey (2020) acquired their Garcinia kola for sale from the Table 2: Costs and returns on Garcinia kola (Bitter kola) in the study wholesalers. Only 5.80% and 8.30% of the respondents area got their bitter kola freely from own farm and natural Items Mean (x/cycle) Percentage forest, respectively. Others who acquired from hired farm Variable item Purchasing cost of Garcinia kola 10,275.70 55.6 or processors equally paid for the product. The result Transportation cost 3,755.5 20.3 indicates that majority (65%) had access to credits to run Cost of packaging 1,632.80 8.8 their bitter kola business. This could be as result of their Cost of storage 2,118.60 11.5 Total variable cost 17,782.55 96.3 membership of association which were often used to Depreciated cost of baskets (FC) 685.57 3.7 access loans from their cooperative societies. Findings Total Cost (TC) 18,468.12 100.0 from the study further revealed that majority (81.67%) of Revenue Unit price x3000/kg the respondents had over 5 years experience in the Average quantity sold 9.15 kg business. This implies that majority of the bitter kola Total revenue (price × quantity) 27,450.00 marketers had the required prerequisite experience to be Gross profit 9,667.45 successful in the business when given the needed Net income 8,981.88 Capital Turnover (TR/TC) 1.49 financial support and enabling environment. The result Field survey (2020) also indicate that majority (84.17%) of the respondents were small scale marketers purchasing less than 41kg of Estimation of costs and returns: Table 2 presents the Garcinia kola for sale in a marketing cycle. analysis of costs and returns to Garcinia kola in the study

9 Artech J. Res. Stud. Agric. Sci.

Table 3: Regression results for factors affecting the profitability of bitter kola Variables ------Linear------Semi-log------Double-log------Exponential------Constant 39933.8 13638 200411.6 15789.9 6.2514 0.1533* 518.78 79.5400 Purchasing cost -680.9 329.2 -649885 53034.14 -7.0385 0.5254* 0.0009 0.0005 Packaging cost -3574.6 4019.4 -36206.6 8849.6 -0.3911 0.0847* 0.6762 0.0573 Marital status 5715 3865.6 48203.3 14836.5 0.6018 0.1855* 1.8255 0.3387 Household size 1055.6 871.5 20817.7 7312.1 0.1799 0.0826* 1.1971 0.0989 Experience 1881.5 540.3 36001.1 6279.4 0.3774 0.0652* 1.4585 0.0952 Access to credit 5363.2 3725.6 1103.8 8383.7 0.0871 0.081 1.091 0.0884 Selling price -0.0094 1.9209 7802.3 3063.7 0.5086 0.2341* 1.1037 0.0376 Transportation cost -3065.5 4109.2 -87304.4 9876.8 -1.6531 0.1965* 0.8026 0.0248 Education -83.5 501.2 -326.2 309.9 -0.0026 0.0034 0.9973 0.0035 Observation 120 120 120 120 Adjusted R2 0.12 0.58 0.62 0.62 VIF 1.69 1.5 1.5 1.5 Variance Inflation Factor (VIF); * significant at 5%; Field survey (2020)

area. The Total Variable Cost (TVC) of x17,782.55 per Table 4: Constraints to bitter kola marketers in the study area marketing cycle constituted about 96.3% of the total Constraints Mean Ranking cost incurred. Average bitter kola marketers generate Storage facilities 3.28 1st High cost of labour 2.71 2nd x27,450.00 as total revenue with a gross and net profit of Seasonality of the product 2.60 3rd 9,667.45 and x8,981.88, respectively. The result of 1.49 Insufficient capital 2.55 4th capital turnover from the business implies that 49 kobo Organised market 2.16 5th will be realized on every x1 invested by the Garcinia Field survey (2020) kola marketers in the area. significant at the 5% level. The result indicates that a 5% Regression results: Results displayed in Table 3 presents increase in the price of the commodity, all things being the regression results for the factors affecting the equal, profit will increase by x0.51. profitability of marketing of Garcinia kola in the study area. Four functional forms of linear, Semi-log, Constraints to bitter kola marketers: Table 4 describes double-log and exponential were estimated in order to the constraints facing bitter kola marketers in the study select the best fit. Double-log production functional area. Problem of storage was the greatest problem of the form was selected as the lead equation on the basis of marketers in the area. Lack of storage facility affects the economic, statistical and econometric criteria. The market value of bitter kola because the product could adjusted R2 was 62.0%, indicating that 62.0% of the total shrink, loose colour and taste when exposed to direct variations in the profit level of Garcinia kola marketing sunlight and heat. The second and third problems were explained in the model by all the explanatory affecting the marketers in terms of profit making and flow variables while only 38.0% variation was due to error of income were high cost of labour and seasonality of term. The F-value (28.03) was equally statistically bitter kola. significant at 5% level. This implies that all the explanatory variables jointly exerted a significant impact CONCLUSION on the profit level realised from the sales of Garcinia kola. From the findings above, the study concluded that The coefficient value of -7.0385 for the purchasing bitter kola marketing is a gender-based business. It is a cost, -1.6531 for the transportation cost and -0.3911 for profitable business with net profit of x8,981.88 and cost of packaging indicated that the variables were capital turnover of 1.49 per marketer in a marketing negatively related to the profit realised from the marketing cycle. of Garcinia kola. This also implies that a 5% increase in RECOMMENDATIONS the purchasing cost, transportation cost and cost of packaging of the product will decrease the profit by 7.04, The study recommends policies interventions in 1.65 and x0.39, respectively. On the other hand, marital specific areas such as storage facilities and organised status, household size and marketing experience were marketing by governmental and non-governmental alike positive and statistically significant at the 5% level of that will improve the enterprise in order to reduce the significance. The implication of this is that a unit increase problem of unemployment through the various jobs that in these variables will result in a commensurate increase will be created by the Garcinia kola value chain in the level of profit, ceteris paribus. The slope coefficient marketing in the study area in particular and the nation of price was positive as expected and statistically (Nigeria) in generally.

10 Artech J. Res. Stud. Agric. Sci.

REFERENCES Aiyeloja, A.A. and O.I. Ajewole, 2006. Non-timber forest products’ marketing in Nigeria. A case study of Osun Adebisi, A.A., 2004. A case study of Garcinia kola nut state. Educ. Res. Rev. 1: 52-58. production-to-consumption system in J4 area of Omo Babalola, F.D. and B.O. Agbeja, 2010. Marketing and Distribution of Garcinia kola (Bitter kola) in forest reserve, South-west Nigeria. In T. Sunderland Southwest Nigeria: Opportunity for Development and O. Ndoye (Eds.), Forest Products, Livelihoods of a Biological Product. Egypt. J. Biol., 12: 12-17. and Conservation: Case Studies of Non-Timber Ijomone, O., P. Nwoha, O. Olaibi, A. Obi and M. Alese, Forest Product Systems (pp: 115-132). ISBN: 979- 2012. Neuroprotective effects of kolaviron, a 3361-25-5. biflavonoid complex of Garcinia kola, on rats Adedokun, M., T. Ojo and F. Oyelakin, 2018. Socio- hippocampus against methamphetamine-induced economic contributions and marketing of Garcinia neurotoxicity. Maced. J. Med. Sci., 5: 10-16. Iwu, M.M., 1993. Handbook of African Medicinal plants. kola (bitter kola) in Ijebu-Ode Ogun State, Nigeria. CRC Press, Boca Raton, FL, USA. Int. J. Afr. Asian Stud., 42: 45-52. Onyekwelu, J.C., J.A. Olusola, B. Stimm, R. Mosandl Adepoju, A.A. and A.S. Salau, 2007. Economic valuation and A.D. Agbelade, 2015. Farm-level tree growth of non-timber forest products (NTFPs). Retrieved characteristics, fruit phenotypic variation and market from http://mpra.ub.uni-muenchen.de/2689/. potential assessment of three socio-economically Aiyelaagbe, I.O., L. Popoola, A.O. Adeola, K.O. important forest fruit tree species. For., Trees Obisesan and D.O. Ladipo, 1996. Garcinia kola: its Livelihoods, 24: 27-42. Pribyl, O., V. Verner, A. Degrande, D. Foundjem-Tita, A. prevalence, farmer valuation and strategies for its Manourova, P. van Damme, 2017. Market survey of conservation in the rainforest of southeastern Nigeria. Garcinia kola (bitter kola) in Yaounde city, In Paper contributed to the workshop on the Cameroon. In Proceedings of the Future Agriculture: Rainforest of Southeastern Nigeria and Southwestern Socio-Ecological Transitions and Bio-Cultural Shifts, Cameroon (Vol. 21, Pages: 23). Bonn, Germany, 20-22 Septembe.

11