VALUE CHAIN OF HIGH-QUALITY CASSAVA FLOUR (HQCF) IN SOUTH WEST NIGERIA

Abstract

Value Chain (VC) of agricultural products impacts on their commercial viability. Despite being the world’s largest producer of cassava, Nigeria hardly features in its world trade. Domestic production is mostly used as staple food and not processed into value added products such as High-Quality Cassava Flour (HQCF), which has high industrial demand. There is little information on comparative advantage, competitiveness and effects of policies on HQCF in Nigeria.Therefore, the value chain of HQCF in South West Nigeria was investigated. A four- stage sampling technique was used. Oyo and Osun states were purposively selected being major producers of cassava. Four Local Government Areas (LGAs) from each state, four villages from each LGA and 320 cassava producers were randomly selected. Complete enumeration of the processors (18) and marketers (26) were utilised. Data were collected with the aid of a structured questionnaire on socioeconomic characteristics of HQCF VC actors (producers, processors and marketers): age, education and farming experience. Secondary data on port charges, import and export tariffs and exchange rates were sourced from Nigerian Ports Authority and Central Bank of Nigeria. Competitiveness was measured using Private Cost Ratio-PCR (PCR >1:non-competitiveness, PCR <1: competitiveness), comparative advantage was measured using Domestic Resource Cost-DRC (DRC >1: no comparative advantage, DCR <1: comparative advantage) and policy effect was measured using Effective Protection Coefficient-EPC (EPC >1: subsidy, EPC <1: negative effect of policy). Data were analysed using descriptive statistics, Net Farm Income (NFI) and ordinary least squares regression at α0.05. The age, years of formal education and farming experience for the cassava producers were 48.3±8.5, 3.0±3.4, 21.0 ±10.8years, respectively; while 47.6±8.1, 15.0 ±0.8 y, 8.4±2.1years, respectively were for HQCF processors and 44.1±6.8, 3.5±1.4, 10.0±1.2 years, respectively were for HQCF marketers. The NFI for the producers, processors and marketers were ₦828,499.28/ha/year,₦ 43,761,365.97/year, and ₦18,249.88/year, respectively. Producers’ NFI was influenced positively by labour engaged (β=0.48), size of land cultivated (β=0.11) and cost of inputs per cropping season (β=0.03) and was negatively influenced by the cost of producers’ capital assets (β = -0.030). The NFI for the processors was increased by years of experience in HQCF processing (β =0.002) and processors’ capital asset (β= 0.040). The NFI was decreased by cost of cassava root used in production (β = -0.050). Marketers’ NFI was enhanced by years of experience in marketing (β = 0.001) and cost of transportation (β= 0.001). The HQCF VC actors were competitive with PCR of 0.12 (producers), 0.03 (processors) and 0.39 (marketers). Similarly, the actors had comparative advantagewith DCR of 0.05 (producers), 0.75 (processors) and 0.15 (marketers). However, the actors were negatively affected by government policy with EPC of 0.89 (producers), 0.94 (processors) and 0.07 (marketers). Actors in the High-Quality Cassava Flour value chain were competitive and had comparative advantage in production. However they were not protected by government policy in South West Nigeria.