Doctorate Proposal Thesis
Proposed Topic: Financial Constraints to adding Value to Small-scale Cashew Farming in Nigeria
The proposed research will concentrate on Nigeria’s booming cashew industry and its emergence as an indispensable contributor in the agricultural sector since early 2000s, with emphasis on the financial constraints experienced by small-scale cashew farmers.
Agriculture occupies a major part of Nigeria’s Gross Domestic Supplies (GDP) and over 80 percent of farmers are smallholders who rely mostly on basic production resources despite an increased awareness of the crop’s economic benefits (Mgbenka R.N. & Mbah E. N., 2016). Renewed interests from government and private bodies on improving cashew nut cultivation are evident in effective policy formulation, funding and researches in the agro-business. These efforts have contributed positively toward boosting Nigeria’s economy although significant results are still elusive (NBS., 2011). An estimate on the value of annual cashew nuts export from Nigeria stands between US$ 25 to 35 million although data from some unofficial sources suggest that actual figures are higher. According to a 2015 report from the International Trade Center, Nigeria’s cashew industry earned about 150 million naira locally and nearly US$ 183 million from raw cashew exports in the same year (Market Insider., 2015).
About 49% of the world’s cashew crop production comes from nearly two million small-scale cashew farmers in Africa, and the sector serves as an income earner to over 10 million Africans (Taraf., 2014) thanks to the skyrocketing interest from investors in Asia, Europe and America. However, the impact from cashew farming in Nigeria has been generally discouraging due to the farmers’ inability to exploit vast opportunities presented by technological advancement and reliable sources of working capital from both internal and external financiers. Economists believe the incentive required to add value in small-scale cashew production is low in Nigeria and, pitiably, is a reason the nation’s raw nuts prices are discounted by 20 to 30% in the world market when compared to those of neighboring countries. Inadequate financing is responsible for the export of over 90% cashew nuts in its raw state, and the consequence is “an avoidable” loss of processing value addition (Azam-Ali S.H. & Judge E.C., 2000).
Portuguese explorers first introduced cashew in Nigeria around the 15th century. Caju is the Portuguese translation for cashew; its name was derived from the indigenous Tupi language, Acaju (Olher., 1967).
- Financial constraints of small-scale cashew farmers have no relationship with income earned from cashew production.
- Sources of finance have no significant relationship with finance constraints.
- An adequate and timely supply of farm inputs from the private sector is necessary for improving small-scale cashew farming in Nigeria.
- The Nigerian Agricultural Extension System can revamp small-scale farming if administered by qualified, responsive and accountable staff.
- Smallholder farmers require an extensive education for proper use of modernized agricultural tools and farming methods.
- The inability of local governments to provide heavy-duty farming equipment at subsidized rates and adopt farmer-friendly land tenure systems contributes to the low performance of smallholder cashew farmers.
Problem Statement: Some of the factors mitigating against cashew production, processing and marketing in Nigeria include: non-participation of women in cashew farming; insufficient labor; high cost of transportation; inaccessible roads; lack of adequate storage facilities and processing industry; including an unsupportive financial sector (Ezeagu., 2002) which is the bedrock of this academic research.
According to Akinwale et al (2001), over 70% of participants in an agricultural survey conducted to identify the main challenges faced by small-scale cashew farmers in Nigeria agreed on inadequate capital as the major concern whereas lack of storage facilities earned 5.5%, among others. The study showed that most cashew farmers find it difficult to obtain loan approvals from banks which require collaterals, and with less incentives, the country’s goal of achieving sustained production will remain elusive if not properly addressed.
Specifically, the following research questions will need to be addressed:
- What is the current state of cashew production in Nigeria?
- What are the major constraints to cashew nuts production in Nigeria?
- What sources of finance are available to small-scale cashew farmers?
- How will adequate finance solve the problem of cashew farming for smallholder farmers?
- What strategies can be applied to develop cashew production in Nigeria?
Objectives: This research will focus on the following areas:
- To examine cashew farming activities in selected states of the federation.
- To assess the prospects of small-scale cashew farmers in Nigeria.
- To identify ways of improving competitiveness and sustainability in the cashew industry.
- To ascertain the major sources of finance and financial constraints encountered by small-scale cashew farmers in Nigeria.
- To suggest ways of transforming the cashew industry for increased production.
Policy makers, financial institutions, investors and researchers will have access to the result of this study, and I am optimistic that its proper use will be meaningful in Nigeria’s drive for agricultural sustainability through constraint management and visionary scheduling.
The author will employ purposive sampling technique for this analysis on financial constraints on small-scale cashew farming in Nigeria, with focus in the Southwestern states of Oyo, Osun and Edo in the South East. To present a comprehensive description of the socio-economic variables of participants in the survey and determinants of cashew production in the chosen area(s) of study, detailed information collated through a well-structured questionnaire will be scrutinized using multi-variate regression analysis and descriptive statistics.
- History of cashew in Nigeria
- An overview of cashew nut production in Nigeria
- Cashew varieties and mode of propagation
- Potentials and prospects of cashew research
- Literature review
- Constraints of cashew production in Nigeria
- The role of finance in small-scale cashew farming
- Strategies for improved cashew production in Nigeria
- Improving cashew nut production in Nigeria: A case study of Vietnam
- Miscellaneous problems that require urgent attention from the government
- Research design
- Sources of data
- Data analysis
- Scope of the study
- Presentation and analysis of data
- Socio-economic characteristics of farmers
- Farmers’ enterprise characteristics
- Distribution of farmers using access to loans, extension services and ownership of farm record
- Relationship between farmers’ net income and their financial challenges
- Relationship between sources of finance and accessibility to farmers
- Results and Discussion
- Mgbenka R. N. & Mbah E. N., “A Review of Smallholder Farming in Nigeria: Need for Transformation,” 2016, International Journal of Agric. and Rural Dev. Studies, Vol. 3, No. 2, pp. 43-54, retrieved 12.03.2018.
- NBS (2011), “Annual Abstract of Statistics”, National Bureau of Statistics, Federal Republic of Nigeria, Abuja, Nigeria, accessed 12 March, 2018.
- Market Insider, 2015, Nigeria: Rundown on Cashew Situation, The International Trade Center, viewed 13.03.2018
- Georgette Taraf, 2014, “From Seed to Snack: Components of the Cashew Value Chain,” African Cashew Alliance (ACA) Annual Report, viewed 12 March, 2018
- Azam-Ali S. H. & Judge E. C., 2000, “Small-scale Cashew Nut Processing.” Paper delivered at the International Cashew Workshop on “Cashing in on Cashew” Sri-Lanka, pp. 1-110, retrieved 13.03.2018.
- Ohler J. G., 1979, “Cashew. Department of Agricultural Research,” Royal Tropical Institute, Amsterdam. p. 26, retrieved 12 March, 2018.
- Ezeagu W. 2002. Nigeria assessment of the situation and development prospects for cashew nut sector. Draft Report: No INT/W3/69. International Trade Centre UNCTAD/INTO. (ITC), Abuja, Nigeria. pp. 1-36, accessed 12 March, 2018.
- Akinwale T. O., Oduwole O. O. and Olubamiwa O. 2001, “Economic Evaluation of a locally Fabricated Extraction Machine for a cottage Cashew Juice Factory,” Journal of Food Technology in Africa, Vol. 6 Issue (1), pp. 18-20, viewed 12 March, 2018.