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African Journal of Agricultural Marketing ISSN 2375-1061 Vol. 6 (8), pp. 001-006, August, 2018. Available online at 
www.internationalscholarsjournals.org © International Scholars Journals 

 

Author(s)                                           Author(s) retain the copyright of this article. 
 

 

Full Length Research Paper 

 

Economic analysis of rice production in Cross 
River State, Nigeria 

 
I. U. Odoemenem1* and J. A. Inakwu2

 
 

1
Department of Agricultural Economic, University of Agriculture, P. M. B. 2373, Makurdi, Benue State, Nigeria. 

2
University of Agriculture, P. M. B 2373, Makurdi, Benue State, Nigeria. 

 
Accepted 21 April, 2018 

 
The study was undertaken to examine the economic analysis of rice production in Cross River State of 
Nigeria. Specifically, the work aimed at examining the socio-economic characteristics of rice producers; 
identify the production constraints in rice production; identify the resources used for rice production; 
determine the gross margin and to determine the effect of production inputs on rice output in the study 
area. The study was carried out through the administration of structured questionnaires and interview. 
A total of 120 respondents were randomly selected from the study area for this study. Descriptive 
statistics, gross margin and regression analysis were employed in analyzing the data. The estimated 
coefficients for all the variables used were significant with the exception of pesticide application and 
rice variety. 

 
Key words: Small scale, subsistence farmers, family labour, hired labour, lucrative enterprise. 

 
INTRODUCTION 

 
Agriculture contributes a lot to the economy of Nigeria. 
Not less than 70% of Nigerians earn their living from 
agriculture and it provides among others food, 
employment, income and foreign exchange, raw material 
for the manufacturing sectors (FAO, 1999). Rice is a 
unique crop grown virtually all over the country, because 
it requires a wide range of temperature between 20 and 
38°C during growth and a long period of sunshine. It can 
be grown over a wide range of ecological conditions. The 
prevalent types of rice production systems in Nigeria are 
the rainfed upland, rainfed lowland and irrigated lowland 
(Singh et al., 1997). In Nigeria, demand for rice has been 
increasing at a much faster rate than in any other African 
country, since the mid 1970 (FAO, 2001). Furthermore, 
during the 1960s; Nigeria had the lowest per capita 
annual consumption of rice in West Africa sub region with 
an annual average of 3 kg. Since then, Nigeria per capita 
consumption levels have grown significantly at 7.3% per 
annum (PCU, 2002). Nigeria being the most populous 
country in Africa with about 124 million people in 1999, 
has the potential to become a beacon of hope and  
 
 
 
*Corresponding author. E-mail: iodoemenem@yahoo.com. 

 
 
 

 
Africa’s economic giant. However, for this potential role to 
be achieved, equitable and sustainable economic deve-
lopment in food sufficiency is a prerequisite.  

According to FAO (1999), agriculture was the mainstay 
of the Nigerian economy beyond oil. Rice had been 
substantially produced in Nigeria to meet local 
consumption before the oil boom of the 1970s brought in 
huge foreign exchange, which diverted the disincentive to 
increase domestic production of rice (Erenstein et al. 
2003). This led to acute shortage of rice and increased 
demand in the 1990s which contrasted with Nigeria’s self-
sufficiency in rice production during the 1960s (IRR, 
1991). In a bid to address the demand-supply gap, 
government at various times has come up with different 
policies and programmes. It was observed that those 
policies were not consistent (Ogundele et al., 2004). The 
erratic policies reflected the dilemma of securing cheap 
rice for consumers and fair price for the producers. 
However, in spite of all these programmes, local rice 
production has not kept up with domestic consumption 
demands. The genus Oryza belongs to the tribe Oryzeae 
in the sub-family Pooideae of the great family Graminae. 
There are 25 species of Oryza. Of these, only two are 
cultivated Oryza sativa L. and Oryza glaberrima Steud. O. 
sativa is the common rice grown throughout the warmer 

file:///C:\Users\user\Documents\REPUBLICATION\AGRICULTURAL%20SCIENCES\AppData\Local\Temp\www.internationalscholarsjournals.org


 
 
 

 

regions of the world, whereas O. glaberrima is grown to a 
limited extent in the flood plains of West Africa. Indica 
and japonica are the main sub species of the genus 
Sativa. O. glaberrima probably originated around the 
swampy headwaters of the Niger River in West Africa. Its 
characteristics are smooth, hairless glumes, red grains, 
and short legumes with roundish tips, high seed 
dormancy and stiff upright panicles with few or no 
secondary branches. Its importance in Africa is 
decreasing as it is being replaced by modern cultivars of 
oryza sativa. O. sativa has been cultivated in south and 
East Asia, since ancient times. Zhkorsky (1962) 
considered that O. sativa was domesticated well over 
5,000 years ago. The general consensus of opinion is 
that rice was domesticated in India, probably the coastal 
area of Eastern India where there are marshy areas. The 
presence there of wild rice species, the cultivar diversity, 
including primitive coarse grain forms and the presence 
of many dominant genes lend support to this view.  

According to Singh et al. (1997), disease and pests are 
important natural factors limiting the production of rice 
and in severe cases, account for about 100% crop 
losses. Production of rice in Nigeria is mainly in the hands 
of small scale farmers who are using unimproved farming 
techniques. Actual yields of rice differ significantly from 
potential yields and this has been attributed to low 
productivity (FMA, 2001). Large losses occur during 
storage, chiefly as a result of insect and rodent damage. 
Fungi and bacteria may reduce the quality, if the relative 
humidity of the air in the storage space remains too high 
(above 70%) or if rainwater enters the storage building. 
Fortunately, those losses can be individually eliminated. 
The cardinal rules for food storage are to allow only clean 
and properly dried rice to enter the storage and keep to 
storage building completely rain and rodent proof. The 
floor should be water tight, so that no moisture seeps 
upwards through it. The storage should also be fumigated 
to control insect damage (Onwueme, 1991). Rice has 
contributed to the socio-economic well being of Nigeria 
both as a major element in the nation’s food security 
calculations and as a commodity for internal commercial 
transactions (FAO, 2000). 
 

Rice is primarily consumed in its parboiled form which 
adds value to rice in the production and consumption 
chain. It can be used in form of pastries, noodles, puffed 
rice, fermented sweet rice and related forms. Rice is used 
in making wine, beer, spirit and vinegar. Rice wine which 
may contain 10 to 15% alcohol is usually made from 
glutinous rice. Rice extract from the bran is rich in 
nutrients such as vitamin E and would not cause high 
blood cholesterol levels. Unfortunately, the use of rice oil 
has lagged behind potential value (Onwueme, 1991). 
Glutinous (sticky) rice has been revealed as a sweet 
ingredient used by ancient Chinese builders to strengthen 
their constructions.  

FAO (2000) pointed  out  that  the intake  of calories  by 

 
 
 
 

 

people in Africa is insufficient to maintain their health and 
efficiency. As the most practicable way of increasing 
calorie intake, they suggested consumption of greater 
amount of rice, provided due regard is paid to the 
nutritional balance. Economic growth and poverty 
alleviation in Nigeria will depend to a large extent on the 
ability of the country to improve on her agriculture, paying 
more attention to agriculture and improving on rice 
production will in no small measure improve food security 
(Erenstein et al., 2003). Indonesia was until 2004,the 
world’s largest importer of rice. Today, Indonesia has with 
the sense of patriotism surpassed all odds to become self 
sufficient in the commodity. Nigeria imported rice to the 
tone of 1.8 million dollars in 2002 alone. The annual 
demand for rice in the country is estimated at 5 million 
tons, while production is 3 million, resulting in a deficit of 
2 million tons (Chinma, 2004). According to Ogundele 
(2004), Africa today is described as the “most hunger 
ridden” continent. The result is unimaginable poverty and 
degradation of the very essence of human dignity. Unless 
there is dramatic increase in food production, especially 
in small scale farming, worse is likely to happen. The aim 
of this study was to examine among others the effect of 
production inputs on rice output in the study area. 

 

MATERIALS AND METHODS 
 
The study area 

 
This study was conducted in Cross River State. The State lies 
within the south-south zone with diverse vegetation belts from the 
largest tropical rain forest in Nigeria, to mangrove swamps, 
savannahs, mountains and waterfalls with rare animals, including 
endangered species and unusual plant families, making it one of 
the world’s richest biodiversity centers attracting scientists and 

tourists alike. It has a land area of about 21,787 km
2
 with 

Cameroon to its east and a population of about 2,892,988 people 
(NPC, 2006). Cross River State soils are richly endowed with 
fertility. Over 70% of the population of the state is engaged in 
agriculture. However, small scale and subsistence farmers 
dominate the sector. Major crops produced in the area include 
cassava: (Manihot esculentum), yam: (Dioscorea spp.), maize: (Zea 
mais), cowpea: (Vignia unguiculata), banana: (Musa sapientum), 
plantain: (Musa paradisiacal), rice: (O. sativa), tomato: 
(Lycopersicon esculentum), vegetable: (Telfaira occidentalis), and 
pineapple: (Ananas comosus). They also engage in fishing and 
livestock rearing. Cross Rivers State has a vast 1.8 million ha of 
untapped agricultural land, extensive water facilities available for 
irrigation, with rainfall from March to November (NPC, 2006). 
Opportunities also abound in storage and preservation processing, 
packaging and marketing of agricultural products. 
 
 
Data collection 

 
It is impossible and uneconomical to obtain information from all the 
rice farmers in Cross river state of Nigeria. According to Emaikwu 
(2008), it is not always possible to determine the size of most 
populations or to be certain that each element in the population has 
an equal chance of being included in the sample. Sample size is 
almost invariably controlled by cost and time (Ogundele, 2004). The 
factors that make up a feasible sample size are funds, time factor, 



  
 
 

 
Table 1. Socio-economic characteristics of the respondent farmers.  

 
 Index Frequency Percentage 

 Male 78 65.0 

 Female 42 35.0 

 Total 120 100 

 Family size   
 0.5 50 41.7 

 6 -10 56 46.7 

 11-15 14 11.7 

 Total 120 100 

 Farm size   
 1 - 3 94 78.3 

 4-6 15 12.5 

 7-9 10 8.3 

 9 1 0.8 

 Total 120 100 
 

Source: Field survey, 2011. 
 
 

 
component personnel, transportation facilities. Consequent upon 
the fact that it is impossible to obtain information from every rice 
farmer in the study area, coupled with the enormity of its population, 
a multi-stage random sampling technique was used in selecting the 
respondents from across the council wards studied. Twelve (12) 
respondents for each council ward were randomly selected to bring 
the total population of respondents to 120. Structured 
questionnaires were administered to the respondents. 

 
 
 

 

Bi = B1 = 0, suggests that the change in rice output cannot be 
explained by variation in the independent variables. 
 

 
Gross margin analysis 
 
Gross margin can be defined as the difference between the gross 
farm income and the total variable cost. The gross farm income is 
the total physical product multiplied by the unit price of the product. 
 

Model specification 
 
The analytical methods used in data analysis were inferential 
statistics, gross margin analysis and descriptive statistics. An 
econometric model was used to analyze the effect of inputs on rice 
output. This is because econometric models give room for 
stochastic error (u). The econometric model is explicitly expressed 
as follows: 

  
GM = TR – TC 
 
Where 
 
GM = Gross margin of rice production (N/ha).  

 

 

Y = a +B1X1 + B2X2 +B3X3 +B4X4 + B5X5 + B6X6 

+ U Where; 

Y = rice output in kg  
a= constant factor, representing total rice 
output X1 = land under cultivation in ha 
X2 = total labour used in man-days 
X3 = quantity of rice planted in kg 
X4 = quantity of fertilizer used in kg 
X5 = total cash expenditure on pesticides used  
X6 = rice varieties planted- local variety = 0, improved variety 
=1 B: (1, 2 …6) = estimate of the coefficients.  
U = An error term measuring variation in rice output unaccounted 
for by the independent variables. 

 
The effects of variables on changes in rice output. A positive Bi will 
be found for variables associated with increased rice output, while a 
negative Bi will be found when a variable is associated with 
decreased rice output. So, failure to uphold that: 

 
RESULTS AND DISCUSSION 

 

From the result in Table 1, 65.0% of rice farmers were 
male while 35.0% were female. The result indicates that 
males who are more capable of coping with the drudgery 
associated with rice farming dominated the study area. 
Furthermore, the table shows that most respondents’ 
highest family size were between (47.7%) and the least 
family size was (11.7%). This indicates that farmers had 
enough family labour for rice production. Table 1 further 
explained that most respondents had farm size from 1 to 
3 ha, (78.3%), 12.5 has between 4 to 6 ha, 8.3% has 
between 7 to 9 ha of land. This implies that most of the 
rice farmers’ studied were small scale farmers. The result 
in Table 2 shows that most respondents had rice output 
of between 500 and 900 kg (25.0%), 19.2 had between 
901 and 1300 kg, 15.0% had output of between 1301 and 
1700 kg, 17.5% had between 1701 and 2100 kg, 4.2% 



 
 
 

 
Table 2. Distribution of respondents by rice output (kg) and income level (N).  

 
Index Frequency Percentage 

Output   

500 -900 30 25.0 

901 -1300 23 19.2 

1301 -1700 18 15.0 

1701 -2100 21 17.5 

2101 2500 5 4.2 

2500 23 19.2 

Total 120 100 

Income level (Naira)   
50,000 – 100,000 30 25.0 

1001,000 – 150,000 45 37.5 

151,000 – 200,000 31 25.8 

200,000 14 11.7 

Total 120 100 
 

Source: Field survey, 2011. 
 
 

 
Table 3. Distribution of respondents by production constraints.  

 
 Index Frequency Percentage 

 Inadequate capital 99 82.5 

 High cost of labour 81 67.5 

 Inadequate supply of farm inputs 77 64.2 

 Poor marketing outlet 57 47.5 

 High cost of pesticides 84 70.0 

 Land tenure system 76 63.3 

 High cost of fertilizer 94 78.3 

 Poor storage facilities 71 59.2 

 High cost of transportation 74 61.7 

 Problem of pests and diseases 72 60.0 
 

Analysis include multiple response. Source: Field survey, 2011. 
 

 

had output of between 2101 and 2500 kg and those with 
output above 2500 kg were 19.2%. This indicates that the 
output of some respondents were encouraging.  

The result in Table 2 further showed that majority of the 
farmers (37.5%) had annual income of between 
1,001,000 and 150,000 Naira (25.8%) had between 
150,001 and 200,000 Naira (25.0%) had between 50,000 
and 100,000 Naira (11.7%), had greater than 200,000 
Naira. The average income of most rice farmers in the 
study area was 75, 000 Naira which is very low for any 
serious rice farming. This result agrees with the findings 
of Ogundele et al. (2004) that small-scale farmers in the 
study area do not make enough money to increase their 
rice production. Table 3 shows that the major rice 
production constraints faced by farmers in the study area 
were; inadequate capital (82.5%), high cost of labour 
(67.5%), inadequate supply of farm inputs (64.2%), land 

 
 

 

tenure system (63.3%), high cost of fertilizer (78.3%) 
among others. This implies that inadequate capital, high 
cost of fertilizer and high cost of pesticides as also 
pointed out by PCU (2001), constitute the major 
production constraints faced by farmers in the study area. 
The result in Table 4 shows that 41.7% of the respon-
dents used fertilizer and pesticides, (20.8%) used only 
fertilizer, (10.0%) used only pesticides and (27.5) used 
none. This result implies that most of the respondents 
used both fertilizer and pesticide for rice production in 
their farm operations. This finding is in line with FMA 
(2001). 
 

 

Gross margin analysis 

 

The result in Table 5 shows that an  average  rice  farmer 



     

Table  4.  Distribution  of  respondents  by  the  use  of  fertilizer  and  
pesticides.     

      

 Index Frequency Percentage  

 Fertilizer 25 20.8   

 Pesticides 12 10.0   

 Both 50 41.7   

 None 33 27.5   

 Total 120 100   
 

Source: Field survey, 2011. 
 

 
Table 5. Gross margin analysis for average rice farmers in Cross River 
State of Nigeria.  

 
 Items Amount (Naira) 

 Rice seed 555.00 

 Fertilizer cost 47998.92 

 Pesticide cost 2776.67 

 Land clearing 1603.08 

 Planting 4068.73 

 Weeding 3285.20 

 Fertilizer application 1380.06 

 Pesticide application 1439.00 

 Transportation cost  
 Harvest cost 2888.33 

 Gross income 117213.38 

 Total variable cost (TVC) 25875.12 

 Gross    Margin 91338.26 
 

Source: Field survey, 2011. 
 
 
 

Table 6. Estimated multiple linear regression analysis.  
 

Variables Beta coefficient Standard error Significant level 

Constant 1298.375 135.530 0.255 

Pesticide cost -508.151 394.702 0.201 

Fertilizer 899.528 578.585 0.628 

Rice variety 41. 768 85.967 0.014** 

Farm size 0.330 0.139 0.930 

Pesticide application 684.17 344.613 0.050** 

 80.200 2.276  
 0.320   

Rice seed 1.102   

 0.055   

 2.147   
 
 

 

in the study area incurred a total variable cost (TVC) of 
25,875.12 Naira. This means that an average rice farmer 
studied earned a gross margin of 91,338.26 Naira. This 
result implies that rice production is a lucrative/ profitable 

 
 

 
enterprise in the study area. Table 6 presents the result 
of the estimated multiple linear regression analysis. Rice 
output was regressed on fertilizer, pesticide cost, farm 
size, rice seed, pesticide application and variety of rice. 



 
 
 

 

The estimated coefficients for all the variables used were 
insignificant except pesticide application and rice variety. 
This implies that these variables have no influence on 
rice output. However, the use of improved variety of rice 
has significant influence on rice output relative to that of 
local variety. Similarly, increase in the use of pesticide 
increased rice output. More specially, an increase in 
investment in pesticide by one unit increased rice output 
or yield by 684.2 kg, also a unit increase in pesticide 
application increased rice output by 41.8 kg. 
 

 

Conclusion 

 

The study was carried out in Cross River State of Nigeria. 
The findings revealed that majority of the rice farmers 
employed both family and hired labour as their source of 
labour. The gross margin analysis revealed that rice 
production was a lucrative enterprise in the study area 
with an average rice farmer earning a gross margin of 
91,338.26 Naira per ha in the study area. Furthermore, 
the multiple linear regression analysis showed that 
variation in output of rice is explained by variation in 
pesticides application and the varieties of rice planted – 
local or improved. This means, the more pesticide is 
applied and at appropriate time, the more the farm is kept 
weed free; free from insect attack and the more higher 
output is realized. The use of the improved variety of rice, 
which yields more, is photoperiod insensitive, less 
vulnerable to diseases and insects, and rodent attacks, 
and produces a higher output. 
 

 

ACKNOWLEDGEMENT 

 
We acknowledge with gratitude the technical assistance 
received from Ms. Dodo, University of Agriculture, 
Makurdi, Benue State. 

 
 
 
 

 
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