ECONOMIC ANALYSIS OF CATFISH PRODUCTION IN KUJE AREA COUNCIL OF THE FEDERAL CAPITAL TERRITORY, ABUJA, NIGERIA

Introduction

1.1 Background to the Study

The increase in human population coupled with large numbers of undernourished people, especially in developing countries, have made the need for food production a major worldwide issue of concern (Okechi, 2004). Studies have showed that there is a limit to world’s natural stocks of fish and shell fish, though renewable, have finite production limits, which cannot be exceeded even under the best management regimes. Hence, the maximum sustainable fishing limit in natural waters has been exceeded (FAO, 2000). Therefore, fish production will depend on aquaculture to bridge the demand-supply gap of fish.

According to (FAO 2006) production in capture fisheries is stagnating and aquaculture output is expanding faster than any other animal-based food sector worldwide, particularly in developing countries. It contributes nearly a third of the world’s supply of fish products and

China and other Asian countries are by far the largest producers. Unlike terrestrial farming, where the bulk of the production is based on a limited number of species, aquaculture produces more than 220 species; of these species, catfish, carps, tilapia and related fish form the largest group in terms of quantity while other groups include aquatic plants and mollusc (FAO 2006).

Out of 35 grams of animal protein per day per person recommended by the Food and Agriculture Organisation (FAO), less than 7 grams is consumed on the average. Many Nigerians suffer from protein deficiency due to low animal protein uptake (Emmanuel and Omotoriogun, 2010). According to Ojo (2008), a small amount of fish is an important dietary supplement for people who cannot easily afford other sources of animal protein. Fish is therefore considered agood source of dietary protein for most Nigerians. Anoop et al, (2009), also stated that catfish provides food for the populace allows for improved protein nutrition because it has a high biological value in terms of high protein retention in the body, higher protein assimilation as compared to other protein sources, low cholesterol content and one of the safest sources of animal protein. Although, fish provides far less animal protein for global nutrition than livestock, people in major areas of Africa and Asia are highly dependent on fish as part of their daily diet. In 18 countries in Africa and Asia, nine on each continent, fish provide at least 40% of dietary animal protein. It also provides highly digestible energy, and is a rich source of fat and water soluble vitamins, minerals and fatty acids.

Kehinde et al (2009) also showed that aquaculture production in Nigeria has been steadily increasing since the beginning of the 21st century as shown in Table 1.

Diagram Available in the Complete Material

While other sources of fish production are now very unpredictable due mainly to technological, environmental and climatic constraints which are beyond the control of fish farmers in Nigeria; fish supply from aquaculture is more predictable. To meet the country’s high demand for fish, Nigeria must therefore turn to her under-utilized in-land water for improved fish production and aquaculture. The Federal Department of Fisheries (2007) estimated the total available land for aquaculture development to be 1.7million hectares of which only 60,000 hectare have been utilized and of the estimated aquaculture production potential of 2.5million tons only 85,087 is being produced per hectare (Kehinde, et al., 2009).

1.2 Problem Statement

In spite of the ever increasing growth being witnessed by other major sources of animal protein such as livestock and poultry industries, the problem of protein deficiency has continued unabated due to the current level of production in the country. Fish constitutes about 41% of the total animal protein intake by the average Nigerian, hence there is a great demand for fish in the country (Federal Ministry of Agriculture & Rural Development, 2011).

F.A.O (2002) stated that fisheries products represented a major source of export revenue for developing countries amounting to over US$ 20 billion per annum in late 1990s. Fish is also important as food, fish oil, fish skin and leather, fish meal and fish manure, medicine and disease control. The contribution of fishing to the Gross Domestic Product (GDP) of the Nigerian economy increased from ₦108.2B in 2003 to ₦486.7B in 2013 (CBN, 2014). Catfish production is important to the Nigerian economy as it serves as a source of income, reduces the rate of unemployment. In Nigeria, catfish fetches a higher price than tilapia. It also requires less space, time, money and has a higher feed conserving rate. As identified by Osawe (2004), catfish is hardy, survives in different culture systems and diverse environments, grows very fast, has higher fecundity, improved survival of the fry and adaptation to supplemental feed.

Although statistics indicate that Nigeria is the largest African aquaculture producer with production output of over 154,890 tonnes per annum which grew to 800,000 tonnes per annum in 2008 (Fison, 2008), this has been unable to meet the market demand in Nigeria which according to Inside Nigeria Fish report (2006) increased from over 1 million tonnes per annum in 2006 to 2.66 million tonnes per annum in 2009. Consequently the country has become a major importer of fishery products given its ever increasing consumption and insufficient internal sources, leading to considerable imports which accounted for more than 800,000 tonnes (valued at $900 million) in 2009 (Rondom and Nzeka, 2010). This is a source of concern owing to the various efforts that the government has put in place so as to make Nigeria self- sufficient in fish production.

To meet up the shortfall in fish demand, the government especially at the Federal and State levels in 2008 placed premium on growing local fish farm and catfish was the choice on account of its nativity to the country (Fison,2008). Also, in May 2009, the Federal government deployed a simple but proven technology in the 36 states as well as the Federal Capital Territory (FCT) to encourage private fish farmers master the art of fingerling production and hatchery in the bid to boost local fish production.

The gap could be attributed to several factors. One of these could be low returns on investment as profit plays a vital role in the success of any business. Low returns on investment could be attributed to use of poor quality fingerlings, high cost of feed, inadequate finance as catfish farming is capital intensive, inadequate information, traditional techniques, poor infrastructural facilities, small size of holdings and low capital investment as identified by Ugwumba and Nnabuife, (2008). Olagunju et al., (2007) also identified water pollution, inadequate supply of fingerlings, inadequate information and feed supply as constraints to catfish farming.

The increasing demand for fish highlights the need for sustainable management of aquatic resources and the need to measure the efficiency of catfish farmers to meet up the increasing demand. Even though a number of researches may have been undertaken to assess economic analysis of catfish production, no one has been done in the FCT and hence the need for this study. Without a critical assessment of the catfish business, it might be difficult to ascertain the profitability of the business. Given this background, it therefore becomes imperative to carry out this research with a view to producing answers to the following research questions:

1. What are the socio-economic characteristics of catfish farmers in Kuje Area Council of FCT – Abuja?
2. Is there any relationship between inputs and outputs of catfish farming?
3. What is the profitability status of catfish farming in Kuje Area Council?
4. What is the technical, allocative and economic efficiency of catfish farmers?
5. What are the determinants of technical, allocative and economic efficiency in catfish production?
6. What are the constraints to catfish farming in Kuje Area Council?

1.3 Objectives of the Study

The main objective of the study is to undertake economic analysis of catfish farming in Kuje Area Council of FCT – Abuja while the specific objectives are to:

1. Describe the socio-economic characteristics of catfish farmers in Kuje Area Council of FCT – Abuja;
2. Estimate the relationship between inputs and outputs of catfish farming;
3. Determine the profitability of catfish farming in Kuje Area Council;
4. Estimate the technical, allocative and economic efficiency in catfish production;
5. Identify the determinants of technical, allocative and economic efficiency in catfish production; and
6. Identify the constraints to catfish farming in Kuje Area Council.

1.4 Justification of Study

The demand for fish is expected to keep rising but the current domestic supply cannot meet up with the demand. Fish farming is the only way to increase the domestic fish supply. Nigeria has a high potential to develop fish farming to make up for a substantial fraction of its fish product deficit (Sikiru et al.,2009). What is needed is a more dynamic approach to increase the current level of production.

FAO (2000) reports that the most commonly cultured fish species include catfish (Clarias gariepinus), tilapia (Clarias lazera) and Carp (Heterobrachus spp).But many fish farms focus on catfish as they can have a market value of 2 to 3 times that of tilapia and are also the most successfully cultured fish species in Nigeria. If the fish production and consumption nexus would be fully exploited, it implies that encouraging fish production from aquaculture would also mean encouraging its domestic consumption. It thus becomes important to embark on the economic analysis of catfish farming in Nigeria with exclusive emphasis on Kuje Area Council of the FCT – Abuja.

This economic analysis of catfish farming is important as fish farming generates employment directly and indirectly in terms of people employed in the production of fishing output and other allied business. In turn, these jobs provide the wealth to support secondary activities in the communities such as schools, retail services and medical care. It also generates income for all categories of people involved in fish farming and thus contributes to the National income. Fish farming also allows for large species of fish to be farmed according to demand as catching fish from the wild may not yield enough products to meet consumer demand and simultaneously keep the natural ecosystem in balance.

Finally, the findings of this research will provide empirical evidence on resource use in catfish farming in the study area and will contribute to the existing literature as well, useful for policy making and formulation and the recommendations will assist catfish farmers to increase their output.

1.5 Research Hypotheses

Given the objectives of the study, the following hypotheses were formulated:

1. There is no significant relationship between input and output of catfish farming in Kuje Area Council of the FCT – Abuja.
2. Catfish farming is not profitable in Kuje Area Council of the FCT – Abuja.
3. Catfish farmers in Kuje Area Council of the FCT are technically not efficient.