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ECONOMIC ANALYSIS OF FINANCING AND SUSTAINABILITY OF IRRIGATED AGRICULTURE IN THE LOWER ANAMBRA AND LOWER BENUE IRRIGATION PROJECTS, NIGERIA
ABSTRACT
Irrigated agriculture provides a very important part of national food security strategies as
well as individuals’ and communities livelihoods at the local level. Yet the performance
of many irrigation and drainage systems in Nigeria is generally below potential due to a
variety of shortcomings. The monopolistic nature of the sector and its social sensitivity
has fostered extensive government intervention that has not always been conducive to
financial sustainability. Insufficient cost recovery and lack of direct linkages between
revenue and expenditure, and between the client and the service agency are the root of the
problems resulting to lower performance. Globally, there is a consensus for irrigation
sector reform to increase water productivity, bothering on the institutional structure for
irrigation management and the incentives for agencies and farmers. These reforms
suppose that irrigation water is to be priced and that farmers will have to pay for the cost
of water supply and related services. While such arrangements are important, some
questions arise: would it work in situations where the physical infrastructure is
dilapidated; user ability to pay is severely constrained by macro-economic factors; market
concepts and institutions are absent or in their infancy; and capability in both
management and regulation is limited.
These concerns informed the need for this study.
The broad objective of this study was to analyze the financing and sustainability of
irrigated agriculture in the Lower Anambra (LAIP) and Lower Benue (LBIP) Irrigation
Projects. The specific objectives of this study were to (i) describe the sources and
volume of investment;(ii) determine levels of cost recovery achieved, (iii) analyze the
institutional and management patterns of irrigated farming in the two schemes;
(iv)describe gender participation in the schemes; (v)Describe gender division of farm
decision making and performance of activities; (vi) measure resource productivity and
enterprise profitability in both schemes; (vii) determine farmers willingness to pay for
irrigated agriculture ; and (viii) Identify the socio-economic factors that influence their
willingness to pay.Data for this study was collected mainly through focus group
discussion and administration of structured questionnaire to farmers randomly selected
from the two projects. In the LAIP, a total of 143 farmers were randomly selected for the
interview, while in the LBIP a total of 33 farmers were randomly selected and
interviewed.
In both schemes key management and technical staff were also interviewed.
Information collected includes socio-economic characteristics of farmers like educational
status, income, age, years of experience; institutional and management patterns of
irrigated farming; farmers’ input costs and output price data, and amount they are willing
to pay for improved water service. Data collected was analyzed using frequencies,
percentages, gross margin, financial self-sufficiency indicator, Cobb-Douglas Production
function, and Tobit regression model.The LAIP scheme is not able to sustain itself for
operation and maintenance as the financial self-sufficiency indicator is 0.60. In both
projects, the major interests identified by the farmers include water quality, quantity and
availability and also timely maintenance and repair of irrigation infrastructure. Headship
of household was indicated by 81.81% of the respondents in LAIP as a factor affecting
access to land in the project. Another major factor is community membership which was
indicated by 79.29% respondents. Major farming decisions like leasing land, fertilizer and
pesticide use, were taken by male heads of households. The Cobb -Douglass production
function analysis showed that for the LAIP rice enterprise the variables that are
significant are fertilizer, seed and land; with seed being negatively related to output. The
overall F-Value of the regression was significant at 5% leading to a rejection of the null
hypothesis that resources used in the production do not significantly influence the output.
Seed, Land and fertilizer were significant in the analysis of potato production in LBIP
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