NORCAL Publications

Research Article

Determinants of the Choice of Catfish Producers’ Risk-Coping Strategies in Osun State, Nigeria

Olayinka Isiaka Baruwa¹*, Ajibola Olajide Ojedokun² and Oluwadamilola Grace Sunday³

Department of Agricultural Economics, Obafemi Awolowo University, Nigeria

*Corresponding author: Department of Agricultural Economics, Obafemi Awolowo University, Ile-Ife, Osun State, Nigeria, Email: aragbon2005@yahoo.co.uk

Citation: Baruwa OI, Ojedokun AO and Sunday OG (2019) Determinants of the choice of catfish producers’ risk-coping strategies in Osun State, Nigeria. J Aquat Res Mar Sci, 2019: 01-09.

Received Date: 16 January, 2019; Accepted Date: 11 February, 2019; Published Date: 16 February, 2019

Abstract

This paper investigates the key factors determining the risk-coping strategies adopted by catfish farmers in Osun State, Nigeria using cross-sectional data collected from 80 randomly sampled catfish producers. Results showed that catfish farming is male-dominated (81.3%) and that respondents had access to different sources of capital and that all the farmers were constrained by one risk or the other. The study also revealed that farmers employed different risk coping strategies of which the major ones were reducing the density of fingerlings (75.0%), strictly treating the pond before stocking (73.8%), using large-sized fingerlings (71.3%) and proper water and feed quality (70.0%). The multivariate probit results revealed that age of respondents, years of education, household size, startup capital, amount spent on monthly medication and years of experience were the significant factors that affected farmers’ choice of risk-coping strategies. Based on these findings, the study recommended that catfish medications should be subsidized and that governments at various levels should orientate and empower the younger generation to venture into catfish farming

Keywords

Catfish Production; Agricultural Producers; Determinants; Fish Farming; Risk; Strategies; Multivariate Probit

Introduction

The Nigerian Agricultural sector which is responsible for the provision of the bulk of food and feed supply for both human and livestock population, also contributes to the supply of raw materials for the agro-based industries and serves as means of employment for more than 70% of her workforce [1]. Despite this, a significant amount of the food consumed by the populace is produced by majority of Nigerian farmers who are smallholders and who rely mainly on nature and natural processes, agricultural biodiversity, local resources and local knowledge to farm [2,3-4]. This is because the Nigerian agriculture, just like other developing and developed countries, is by nature a risky activity and agricultural enterprises operate under a situation of risk and uncertainty [5].

Furthermore, agricultural producers face a wide range of risks; thus, the inability to predict future outcomes precisely and hence, make good decisions for the future places the farmer in a rather precarious situation [6,7]. The risks faced by farmers could arise due to several biophysical factors, changing economic environment, introduction of new crops or technologies and uncertainties surrounding the public institutions and their policy implementation also combine with these natural factors to create a plethora of production, institutional, price, human and financial risks for farmers [8,9]. These risks have not only reduced efficiency in farming operations, but it has also made the farmer doubt unfamiliar ways of doing things that are better than the ones he is used to [7].

According to Ajetomobi and Binuomote [10], there are different ways through which farmers react to risks such as forward pricing, production practices, insurance, holding liquid reserves, diversification, and liability management or their combination. However, in Nigeria farms of all types are left with little or no opportunity for diversification and insurance [11]. The fishery subsector which is an important agricultural subsector due to been a major source of animal protein and constitutes an important nutritional component in the human diet [12], is in a large sense not free from the risk and uncertainties plagued by the agricultural sector. This is because the decision to produce catfish presents several unique problems; for example, raising catfish usually requires construction of ponds which requires capital investment that frequently exceeds the value of the land on which ponds are built and inadequate availability of seed for stocking and feed used to be major problems. Because of the afore-mentioned constraints, the increasing risk in catfish production can be seen in growing income fluctuations [13, 14-16].

Statement of the problem

The increase in human population and the continued incidence of undernourished or starving people, especially in sub-Saharan African (SSA) countries of which Nigeria is one, have made the need for food production a major worldwide issue of concern [17]. There is a high demand for protein rich food items of animal origin especially in order to meet the daily dietary requirement [18]. The major animal protein sources in these SSA countries include cattle, goats, sheep, poultry and fish, however catfish and catfish products due to its accessibility and availability, constitute approximately 60 percent of total protein intakes in adults especially in the rural areas [19]. Hence, the importance of the subsector to the sustainability of animal protein supply in nutritional supplements in the country cannot be overemphasized [20].

Despite the importance of the catfish sector in ensuring food security and improving farmers’ standard of living, Nigerian catfish farming is constrained by many problems, principally: an inadequate supply of quality fish seed, extension support, and intensive management strategies, lack of cost-effective feed, poor infrastructure, and limited opportunities for credit [21,22-27]. Therefore, farmers’ attitude and responses to risk are important in understanding how catfish farmers reacts when faced with these risks [28].

Similarly, Adewumi and Olaleye [29] submitted that though catfish is popular in the market and has great potentials to boost the rapidly growing Nigerian aquaculture, it is confronted with a number of problems. These problems are poor management skills, lack of capital, lack of environmental impact consideration and immediate marketing of products. These problems arise from different sources which includes natural sources such as drought, pests and diseases as well as floods; technical sources such as access to input, output prices; social sources which includes ill-health or death; unavailability of labour or land and also financial risks [30].

It is against this backdrop that this study described the socioeconomic characteristics of catfish farmers, identified the constraints to catfish production and the risk-coping strategies adopted and also determined the factors affecting catfish farmers’ choice of risk-coping strategies.

Materials and Methods

This study was carried out in Osun State, one of the major catfish production states in the South-western zone of Nigeria. The state lies between Latitude 7^º and 9^º and Longitude 2.75^º and 6.75^º and has an estimated population of 3.4 million people [31]. The state is divided into three agro-ecological zones namely Ife/Ijesha, Iwo and Osogbo, this study purposively selected Osogbo agro-ecological zone due to predominance of catfish farmers in the zone. A total of eighty respondents were randomly sampled from the zone. Using primary data, a well-structured questionnaire was administered to elicit information on catfish production and risk-coping strategies adopted by respondents in the immediate past season (2017/2018 farming season). Information was collected on constraints faced by farmers as well as the type(s) of strategies employed by them in combating risks.

Multivariate probit model specification

The multivariate probit model is a discrete choice model. It is a multiple-equation extension of the probit model that allows for the disturbance terms to be correlated just like the seemingly unrelated regressions model [32]. This model is very useful in handling risk-coping choices because it not only allows the multiple choices to be simultaneously analyzed but also allows the error terms to be freely correlated.

Following Cappellari and Jenkins [33], a system of 4-equation multivariate probit model was estimated to jointly model the determinants of risk-coping strategies of catfish farmers.

 

y_im*= β_m'X_im+∈_im, m=1, …, M

 

^y_im^{=1 if} yim*^{>0 and 0 otherwise}

 

∈im, m=1, …, M 

 

are error terms distributed as multivariate normal, each with a mean of zero, and variance-covariance matrix V, where V has values of 1 on the leading diagonal and correlations

ρ_jk=ρ_kj as off-diagonal elements.

Xim = vector of the explanatory variables and

βm' = vector of unknown coefficients to be estimated.

The dependent variables for respondents’ choice of risk-coping strategies are reduced density of stocking, strictly treating the pond before stocking, using large-sized fingerlings, and proper water and feed quality; while the independent variables are age, level of education, household size, start-up capital, monthly medication and years of experience.

Results and Discussion

Description of respondents by their socioeconomic characteristics

The result revealed the mean age of the farmers to be 45.40 ± 9.025 years which suggest that the farmers were young and energetic to meet the rigors of farming as they are in their productive age bracket. This could be because young farmers are more knowledgeable, adopt better practices and may be more willing to bear risk and adapt to better farming techniques because of their longer planning horizon [34]. The result also revealed that majority (81.3%) of the respondents were male and were married (90.0%) which shows that catfish production in the study area is dominated by male. The higher percentage of male to female catfish farmers indicates that fish farming is gender-biased and that male catfish farmers are better at handling risks and uncertainties which corroborates the findings of other authors [35-38] that women are more averse than men. This is in agreement with the study conducted by [39] who found that there were more males than females.

The result also showed that the mean household size is 5.80 ± 2.957 members which show that household can divert labour into farming activities. Also, the result showed that all respondents had one form of formal education and that 11.3% of the respondent were catfish farmers while others were either civil servants (30.0%), crop farmers (26.3%), livestock farmers (16.3%), traders (8.8%), artisan (2.5%), or tailor (5.0%). The result also showed that the mean year of experience in catfish production was 18.36 ± 6.816 years, which shows that respondents were not new in the business and as such are expected to be more efficient in the use of resources [40].

Furthermore, the result revealed that the mean startup capital of respondents was ₦295,000 (which is equivalent to $818.31) while the standard deviation was approximately ₦155,000 (which is equivalent to $429.96). This result shows that catfish farming is capital-intensive. The table reveals that respondents get their capital either from personal savings (53.8%), that most (62.5%) of the respondents have access to credits while 41.3% got capital from friends, friends and family (41.3%), cooperative association (35.0%), microfinance bank (15.0%), alajo (7.5%) and commercial banks (7.5%). This result showed that respondents have access to one form of credit or the other for catfish production. Finally, the result revealed that most catfish farmers (63.80%) use both hired labour and family labour while others use either family labour (11.3%) or hired (25.0%) only.

 

Major risks faced by catfish farmer

Table 2a showed that all (100.0%) the respondents encountered one risk or the other. Table 2b below showed the various risks encountered by catfish farmer in order of importance. The major risks which catfish farmers encounter in the catfish production as shown in table 2b include catfish price variability (97.5%), high cost of inputs (87.5%), low quality of fingerlings (81.3%), lack of adequate capital (71.3%), pond water is undermanaged (63.8%), overfeeding of catfish (66.3%), low quality of feed (61.3%), inadequate access to capital (76.3%) and use of undersized fingerlings (76.3%).

 

 

Table 3 revealed the risk-coping strategies employed by catfish farmers when faced with risks. Majority of the farmer consider reducing the density of fingerlings stocking (75%), strictly treating the pond before stocking (73.8%), using large sized fingerlings (71.3%), proper water and feed quality (70.0%), improve hygiene conditions (68.8%) and using labour with knowledge on aqua-cultural veterinary/advice (62.5%.

 

Factors affecting catfish farmers’ choice of risk coping strategies

Table 4 revealed the factors which influence catfish farmers’ choice of different coping strategies. The coping strategies used for this study are the four major strategies which were chosen by catfish farmers which include: reducing the stocking density of fingerlings, strictly treating the pond before stocking, using large-sized fingerlings and proper water and feed quality.

The results on parameter estimates from the multivariate probit model on choice of risk-coping strategies are presented in Table 4. It was revealed that farmers that are more educated are less likely to adopt reducing the stocking of fingerlings as their choice of risk-coping strategy. This is because they know that adopting this strategy will consequently reduce the profit that will be realized. The result also revealed that respondents who spend more on catfish monthly medication will be more likely to adopt reducing the stocking of fingerlings as their choice of risk-coping strategy. This is because the more the fish, the more the expenses that will be incurred in catfish medication. Also, the respondents with more experience in catfish production are less likely to adopt reducing the stocking of fingerlings as their choice of risk-coping strategies. This could be due to the fact that they would have dealt much more in risky economic games at high stakes in early years [41].

The result also revealed that elderly catfish producers are more likely to adopt the strategy of strictly treating the pond before stocking when faced with risk. This result conforms with those of Oluwatayo and Omowunmi [42]. Also, the more the capital used by catfish farmers in starting the enterprise, the more likely they are to adopt strictly treating the pond before stocking. Similarly, the result revealed that catfish farmers who are of age are more likely to use large-sized fingerlings as their risk-coping strategy. This is because large-sized fingerlings are believed to grow into large-sized table-sized catfish. It was also revealed that catfish farmers with large household size are less likely to adopt using large-sized fingerlings as their risk-coping strategy. This could be due to the expensive nature of large-sized fingerlings as respondents with large household size have more obligations towards their family. This result conforms to those of Amaefula et al., [43] and Oluwatayo and Omowunmi [42] that catfish farmers with large household size will reduce their level of risk consumption or assume risk. The result also showed that respondents who spend more on catfish medication each month will be more likely to adopt using large-sized fingerlings as their choice of risk-coping strategy. This is because the larger the fingerling size used for stocking, the less the expenses that will be incurred in catfish medication. This is due to the fact that small-sized fingerlings will be more in quantity and will as well increase the expense of medication when compared with large-sized fingerlings. Also, the respondents with more experience in catfish production are less likely to adopt using large-sized fingerlings as their choice of risk-coping strategies. This is expected as experienced farmers understand the intricacies of catfish farming. This study conforms to that of Anaefula et al., [43] who opined that with growing experience in farming, the farmer is able to understand the production technology and all associated challenges thereby proffering solutions to such challenges.

The result also revealed that respondents who started with the enterprise with more capital are more likely to adopt to use proper water and feed quality as their strategy. This result however contradicts that of Oluwatayo and Omowunmi [42], who submitted that as capital increases, catfish farmers tend to channel their resources to other sources of income considered to be relatively stable. Finally, the respondents with more experience in catfish production are less likely to adopt using large-sized fingerlings as their choice of risk-coping strategies.

 

Conclusion and recommendations

The study was conducted to determine the risk-coping strategies employed by catfish farmers. The study concluded that catfish farming is male-dominated and that respondents were still very active. Also, it revealed that respondents had access to different sources of capital and that all the farmers were constrained by one risk or the other. The study also revealed that farmers employed different risk-coping strategies of which the major ones were reducing the density of fingerlings, strictly treating the pond before stocking, using large-sized fingerlings, and proper water and feed quality. The study therefore concluded that age of respondents, years of education, household size, startup capital, amount spent on monthly medication and years of experience were the significant factors that affected farmers’ choice of risk-coping strategies. Based on these findings, the study recommended that catfish medications should be subsidized and that respondents should be encouraged to form or join cooperatives as this will help provide funds to farmers at cheaper rates. Also, governments at various levels should try to orientate the younger generation to venture into catfish farming at their early stages so as to be able to know the ways to combat risks when faced with them. Government and non-Governmental Organizations (NGOs) can also intensify efforts that will encourage smaller household size either through educating farmers on the importance of having small household size or implementing programs that will encourage smaller household size.

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