The Impact Of The Distribution And Utilization Of Oil Palm On The Socio Economic Development In Oruk Anam Local Government Area Of Akwa Ibom State

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THE IMPACT OF THE DISTRIBUTION AND UTILIZATION OF OIL PALM ON THE SOCIO ECONOMIC DEVELOPMENT IN ORUK ANAM LOCAL GOVERNMENT AREA OF AKWA IBOM STATE

Abstract

Palm oil is one of the commodities produced in rural Nigeria whose consumption daily in the human diet and use as an industrial raw material have increased its potentials for income generation and poverty alleviation. This study examined the contribution of palm oil production to income generation among 200 small-scale farmers selected from the farming communities in AkwaIbom State, Nigeria. Responses to a structured questionnaire schedule were analyzed using frequency counts and percentages while profitability was determined with data provided on costs and revenue. Palm oil producers were mainly middle-aged married females with low literacy level and operated on small-scale farms.

CHAPTER ONE

INTRODUCTION

  • Background of the study

Nigeria ranked sixth among the poorest countries in the world with over 70% of the population living below poverty line in 2007 (Central Intelligence Agency, 2012) while 46% lived below $1.25 daily in 2010 (World Bank, 2014). Okonjo-Iweala (2014) noted that Nigeria is one of the five countries in which two-thirds of the world’s extreme poor are concentrated; the others are India, China, Bangladesh, and the Democratic Republic of Congo. The poverty in Nigeria is largely rural (poverties.org, 2013) where the effects of macro-economic shocks in terms of fiscal adjustment and monetary policy reforms are felt much more. Thus, whereas poverty is expected to decline by 40% in the urban centers, it would increase by 7% in rural areas which inhabit almost 80% of the population living below the poverty line and depend on agriculture for food and income (International Fund for Agricultural Development, IFAD, 2009). Consistent economic growth and prosperity are central to poverty alleviation and the oil palm industry has been identified as one effective avenue for rural income generation, especially among the women who process and sell palm oil in local and national markets, food security and economic stability (Partnership Initiatives in the Niger Delta, PIND, 2011).

A huge percentage of farmers in Nigeria are small scale farmers. Small-scale farming involves growing crops, at least in part, to be used by an individual family, with farming being a significant source of their livelihoods (Lininger, nd.)Small Scale farming is usually characterized by intensive labour and in most cases, animal traction, limited use of agrochemicals and supply to the local or surrounding markets. Unlike large-scale commercial agriculture, it plays a dual role of being a source of household food security as well as income from sale of surplus. Although some claim small-scale agriculture is less efficient in output as compared to commercial agriculture (Kirsten & Van Zyl, 1998), it is ecologically friendly in that less land is cleared for cultivation, there are less emissions due to less use of fuel-driven machinery and the market is usually local implying less carbon miles (Kutya, 2012).

The oil palm (Elaeisguineensis) is the dominant source of vegetable oil consumed in the world (USDA, 2006), in the form of palmoil (mesocarp oil) and kernel oil (seed oil). Palm oil is the main edible vegetable oil produced and consumed in Nigeria where the oil palm tree features regularly in the natural vegetation of the lowland humid to sub-humid areas in a belt that covers almost 24 million hectares (ha) (Opeke, 2003). Dispersed smallholders harvest fruits from the wild/semi-wild palms and process them to produce 80% of the palm oil output and through which Nigeria accounted for 43% of global palm oil production up till the mid-1960s. The performance has declined such that the annual output at 850,000 metric tonnes (MT) leaves an overall supply gap of 0.5 million MT currently met through imports (Omoti, 2001).

Palm oil production starts with the oil palm trees whose cultivation has formed the farming culture and a means of livelihood for millions of families in the rural landscape. Palm oil production is a major vocation which has played significant roles in poverty alleviation in some countries, especially in Malaysia and Indonesia (BusinessDay, 2013). The huge potentials for generating rural income and providing employment have enabled the poor to be part of the solution to the scourge of widespread poverty.AkwaIbom State which has been listed among civil service state in Nigeria is also one of the 24 palm oil-producing states. This implies that the potentials in palm oil production to transform the lives of the small-scale farmers in the rural sector of AkwaIbomState need to be harnessed. This study was carried out to evaluate the impact of the distribution and utilization of oil palm industry to the socio-economic development of the rural inhabitants of Oruk Anam LGA.

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