RAPHIA PALM WINE MARKETING IN SOUTH- SOUTH NIGERIA

ABSTRACT

The broad objective  of the study was to analyse Raphia palm wine (RPW)  marketing  in South-South Nigeria (SSN). The specific objectives were to: (i) analyse the productivity of resources used in RPW production; (ii) analyse the determinants of technical efficiency of tappers; ( iii) analyse the structure of RPW market in the area; (iv) describe the marketing channels and distribution of RPW; (v) estimate the level and determinants of profit in RPW tapping and marketing (vi) estimate the level of  market integration for the product; and (vii) identify the constraints faced by RPW tappers, marketers and consumers in the study area. The study was conducted in South-South Nigeria (SSN) using the survey method. Multistage random sampling technique was used in selecting three states (Bayelsa, Delta and Rivers) out of the six states (Akwa Ibom, Bayelsa, Cross River, Delta, Edo and Rivers States) that make up  South-South  Nigeria.  Two  markets  were  randomly  selected  from  each  of  two  local government areas randomly selected from each state, after which a total of 10 RPW tappers, marketers and consumers, respectively, were randomly selected from each market to give a sample size of 120 RPW tappers, marketers and consumers, respectively. Total sample size was therefore 360. Three sets of pre-tested structured questionnaires were administered to the respondents according to their categories using trained enumerators to obtain primary data that were used to realise the objectives of the research. Furthermore, four-day local market prices for RPW in selected markets in the states were collected for a period of six months starting  from  September,  2012  to  February,  2013  and  these  were used  to  determine  the integration of RPW markets in the study areas. Data were analysed using descriptive statistics and inferential statistics, such as, stochastic frontier production function, Gini Coefficient, Gross margin analysis, multiple regression analysis and market integration function. Sixty-six percent of the tappers were married. They were all males (100%) and a good number of them (50%) were in their productive ages of 30-49  years with as many as 74% of them without formal education.  A large  proportion  (92%)  of the marketers  were married  with a large number (66%) of them being  females and 66% also were in the age bracket of 30-49 years, with as many as 97% of them having little or no formal education. The consumers were made up of married (58%), males (72%) of which only 42% were in the age group of 30-49 years with a high percentage (84%) of them not exceeding primary school education. Number of Raphia palm stands, variety of palm stands, family labour, hired labour and years of tapping experience were statistically significant (p>0.01) in relation to RPW output even though there was a record  of inefficiency  in the productivity  of resources  (gamma  =  1). The test  of marginal  effect  after  frontier  showed  a 7%  and  21% increase  in  RPW output  for  every additional unit of hybrid Raphia palm tree and palm stand tapped, respectively. However, the marginal effect of tapping duration was negative, causing a 9% reduction for every additional day of tapping. There existed a positive correlation among the degree of tappers’ inefficiency and  their  age  (0.0224)  and  years  of  tapping  experience  (0.0130).  Access  to  market information (-0.0123), household size  (-0.0720), level of education (-0.0004) and access to credit (-0.0020) exhibited negative correlations with the tappers’ degree of inefficiency. RPW market  was profitable  at both  the  tappers’  and  marketers’  levels,  concentrated  and  with complex distribution channels. Raphia palm wine markets in the three states were integrated. Both tappers and marketers of RPW in the study area faced such very serious problems as poor/lack of access to formal credit facilities, inadequate finance for business expansion and low shelf life of RPW. Consumers faced very serious problems of high transportation cost, adulteration of RPW by retailers and low shelf-life of the wine.

CHAPTER ONE INTRODUCTION

1.1     Background Information

Beverages  are essential  part of human diet because  of their  liquid  content  (Edmund, 1952). From earliest time, man has sought for drinks which are palatable and refreshing. Two categories may readily be recognised: non-alcoholic and alcoholic drinks. Ordinary beverages that do not contain alcohol are commonly referred to as soft drinks (Batchelor & Webber,

1948). These include a great variety of preparations. They nearly all have high sugar content and so are good sources of energy. The United States is the outstanding consumer of soft drinks, using an estimated  50 000 000 bottles a day (Edmund, 1952;  WHO, 2004). Fruit juices are the simplest kind of soft drinks, consisting of the  extracted  juice alone, or with sugar and water added. The most familiar types of fruit drinks are lemonades and orangeade. Others include orange juice, grapefruit juice,  tomato juice, pineapple juice and palm wine. Raphia palm wine (RPW) is one of the most important and also one of the oldest fermented beverages  drunk  throughout  West  Africa  (Edmund,  1952;  Otedoh  1972;  Jeffrey,  1975; Akinrele, 1976;  Otedoh, 1987; WHO, 2004). The World Health Organization (WHO) refers to  it  as  a  traditional  alcoholic  beverage  widely  consumed  by about  two  billion  people worldwide (WHO, 2004).  The organisation further clarified that, the RPW was outside the western beer,  wine and spirit categories and also outside the control of local governments. Nigeria is  among the top 30 positions of adult per capita consumption of fermented wine beverages.  The largest drinkers  are the wine producing countries  of Europe,  followed  by Uganda, Nigeria, Burundi, Sierra Leone, Rwanda, and Sao Tome (WHO, 2004). Presently, Raphia Palm is among the mandate crops of the Nigerian Institute for Oil Palm Research, (NIFOR).  The  Institute  has  the  mandate  to  research  into  the  biology,  production,  and utilization of the crop. A lot of land mark achievements  have  been made in this direction, notable of which is the preservation of the fresh RPW through bottling to up to 12 calendar months. This is very important because it would encourage the inhabitants of the  growing regions to appreciate this natural resource and invest in its cultivation.

Raphia palm (RP) is found from Gambia through the Guinea forest zone of  West Africa to Cameroon, Gabon and Congo and possibly to Angola. It is occasionally cultivated, e.g. in Nigeria.  Outside  Africa,  it is grown  in India,  Freetown  Peninsular,  Malaysia  and Singapore (Mann & Wendl, 2009). There are many species of the RP and they all belong to the family Palmea. Twenty species of the palm have been identified in Africa. They are R. Realis, R. Australis, R. Ruwenzoriea, R. Gentiliana, R. Textilis, R. Malombe, R. Hookeri, R. Rostrate,   R.  Palma-pinus,   R.  Monbullorum,   R.  Vinifera,   R.  Taedigera,   R.laurentii, R.africana, R. Mannii, R. Longiflora, R. Mambillensis, R.  Farinifera, R. Sudanica and R. Sese. Otedoh (1976) identified eight of the 20 mentioned species of the RP to be indigenous to Nigeria.  They are;  R.farinifera,  R. africana,  R.  Longiflora,  R. Regalis,  R.vinifera,  R. Mambillensis,  R. Hookeri and R. Sudenica. Of  these eight species of Raphia identified as indigenous  to Nigeria, R. hookeri is the  most dominant tree crop within the coastal fresh water  swamps  (Ndon, 2003). Three  varieties  of Raphia  hookeri  have been distinguished: R.hookeri  var. hookeri,  Raphia  hookeri  var.  Rubrifolia  Otedoh,  and  Raphia  hookeri  var. Planifolia Otedoh. Locally, different forms of Raphia hookeri are recognised. In Nigeria, RP grows naturally and abundantly in the South-South. This area is characterised by rain forest, fresh water  swamps,  lakes and  other  wet places.  It also  contains  the bulk of proven oil reserves in Nigeria. The oil reserves in Nigeria make it one of the largest producers of oil in the world (Onakuse & Eamon, 2007). The inhabitants of this region are found in Akwa Ibom, Bayelsa, Cross River, Delta, Edo and Rivers States. They depend on fish and other mangrove resources for their livelihoods, including Raphia palm.

1.2 Problem Statement

There  is  now  a  growing  awareness  of  the  benefits  of  RP  to  the  rural  communities especially within its growing regions (Ismail & Chintuck,  1993). Raphia  exploitation  and utilization   have   yielded   direct   and  immediate   micro   level   benefits   to  economically disadvantaged  rural communities  in Nigeria  (Agbo,  Nweze  & Igbokwe,  2011).  Over  the years, the level of the importance of RP as a resource to the rural communities was not fully appreciated. Some of the reasons for this include lack of acknowledgement of the productive aspects of RP as a forest resource; lack of  information regarding  its available palm wine yield; qualities, preparation and  utilization; as well as lack of consideration of its potential value to the national  economy (FAO, 2007). Attention therefore needs to be given to this resource  because  of population  increase,  natural  resource  depletion,  worsening  economic climate and the inability of developing countries such as Nigeria to afford imports. The need to conduct economic studies on the RPW cannot be over-emphasized in order to promote the economics  of the wine at regional,  national  and international  markets,  starting  with data generation on local tapping, consumption, and price and socio-economic characteristics of the tappers, marketers and consumers.

As a staple, which serves as a major source of energy and an important food crop  in Nigeria, RPW provides income to the tappers and marketers, and a source of raw material to dry gin producers besides its other uses (Olomola, 2001; NAD, 2002). It grows naturally in the South-South area of the country over an estimated 86 982 hectares of land (NDDC, 1999; FOS, 2004). Its production thrives best in the swampy water logged terrain. There is therefore a high demand for labour use for tapping operations. Other problems include poor/inadequate storage  techniques  to preserve  the shelf-life  of  the wine,  shortage  of modern processing facilities,  lack of funding,  lack of uniform  measure, poor market information  system  and price volatility. All these contribute to poor price competitiveness in the local markets (FAO, 2007; Enibe, Chidebelu, Onwubuya, Agbo & Mbah, 2008). This has resulted in high cost of distribution, seasonal glut and shortages, rapid and increased fermentation of the RPW which in turn affects the behaviour of the tappers, market intermediaries and consumers. There is therefore a need to examine the existing market structure and marketing channels for RPW and how they function in the States, in addition to the need to estimate the extent of market integration for RPW in South-South, Nigeria.

Demand for beverages in industrialised countries continues to increase and a significant proportion  of  this  is  met  from  developing  countries.  This  is especially  true for  tropical beverages,  fruits,  spices  and  some  off-season  temperate  vegetables  (FAO  2001;  Barrett, Browne,  Harris  & Cadoret,  2002).  There  is good  evidence  of  the ability of smallholder farmers to be competitive  in products such as RPW  production,  coffee, cotton and cocoa (Barrett, Browne, Harris & Cadoret, 2002; UNCTAD, 2003) and also in herbs, spices and some horticultural products (Coulter, Millns & Tallontire, 2000). In spite of the opportunities, there are challenging obstacles to developing countries accessing the global organic market (Harris 1998; Barrett, Browne, Harris & Cadoret, 2002). Therefore, one of the focuses of this study is to identify  constraints to the development  of RPW production and marketing  in Nigeria oriented towards export.

In order to tackle the problem of low exploitation and neglect of the RPW, the  study attempted to answer the following questions: What are the socio-economic characteristics of the tappers and marketers? What is the nature of the marketing channel and distribution of RPW in the States? What is the profitability of RPW tapping and marketing in South-South, Nigeria? What is the efficiency of resource allocation in the tapping and trade of RPW in the study area? What is the extent of market integration for the product in the area? What are the constraints faced by the tappers/marketers of RPW in the area?

1.3 Objectives of the Study

The broad objective of the study is to analyse RPW tapping and marketing in South-South, Nigeria. The specific objectives are to:

i.   analyse the productivity of resources used in RPW tapping in the study area;

ii.   analyse the determinants of technical efficiency of the tappers;

iii. analyse the structure of Raphia palm wine market;

iv.  describe the marketing channels and distribution of RPW;

v.   estimate the level and determinants of profit in RPW tapping and marketing;

vi.   estimate the level of market integration of RPW; and

vii. identify the constraints faced by RPW tappers, marketers and consumers.

1.4       Hypotheses of the Study

The following null hypotheses were tested:

i.   Input use do not influence RPW output;

ii.  RPW tappers are not technically efficient;

iii. output and input prices do not influence profit of RPW; and

iv.  RPW markets are not integrated.

1.5     Justification of the Study

The limited data on RPW production and marketing in Nigeria justifies the need for the study. The study will therefore be a starting point in generating base line data on RPW production and marketing in the country for reference purposes by students, academia and other interest groups. The study is also expected to provoke interest of investors and interest groups to know how and what to do to promote efficiency of RPW production and marketing, as well as reduce the constraints affecting the production and marketing of RPW. Producers and marketers will also benefit by knowing their expected profit margins and also steps to be taken to reduce their marketing costs. Researchers will  gain from the study by identifying where  further  studies can be conducted.  Students  will  learn more by making  use of  the findings  to a achieve standard literature  review and to continue more work based  on the recommendations of the study. Policy makers and implementers will gain by knowing how transport and transaction costs and prices affect the production and marketing of RPW. Also, entrepreneurs will benefit by knowing where to enter the business.

1.6       Limitations of the Study

The study was  limited  in scope  to  the activities  of RPW  tappers,  marketers  and consumers in South-South (SS), Nigeria. As a result of lack of formal record keeping by the RPW tappers, marketers and consumers, the respondents had to rely on memory recall and estimates to provide the required information. The respondents were conservative in nature. They were unwilling to co-operate to give the required information without much conviction and persuasion that the researcher was not a government official and that information given would only be used for the research purpose as stated. Furthermore, most of the RPW tappers and  marketers  also  handled   other  commodities  beside  RPW  sales.  Consequently,  the operational costs of RPW  tapping and marketing were based on estimates with respect to current prices of items.

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