Economic analysis of household food demand in Southwestern Nigeria.

AuthorOlorunfemi, Sola
PositionReport
  1. INTRODUCTION

    The food supply of a nation is through domestic food production and import. In turn, ability of a nation to import food, depends on her export earnings; foreign exchange reserves; value of essential non-food import and debt service obligations (Olayemi, 1998). There is food insecurity and malnutrition among Nigerians. While the World Health Organization (WHO) recommendation is a minimum of 20 grams of animal protein per capita per day, only a total of 7.2, 7.6 and 4.9 grams were taken in Northern, Western and Eastern Nigeria respectively. This represents national average of 6.56 grams. Malnutrition for children aged 3-35 is 44 percent in Nigeria.

    The move by government to import food massively to save the above situation only presents us with situation at the national level, which does not mean food security for various households in the country. Adequate food supply at the national level does not automatically lead to food security for all households. There may still be poor households who do not have the means or the purchasing power to procure the food they need.

    Food prices continue to soar up day by day going out of the reach of the common man while the income of the households in the country are being debased by the staggering inflation rate. The inflation rate which was just 3.2% in 1972 rose to 39.6% in 1984, 40% in 1989, 72.8% in 1995 10% in 1998 and only 7.0% in 2000 (CBN 2000),. This underscores the fact that households' income can hardly cope with soaring food prices, which has necessitated large food spending out of households' income of between 60 percent and 80 percent coupled with poor income per head in Nigeria.

    A look at the composite consumer price indices for food in Nigeria between 1970-2002 shows that it was 9.0% in 1970 but this progressively rose to 4567.07% in 2002 and 8,205.9% in 2006 (CBN, 2000, 2002, 2006). It was reported that the average income per month in Nigeria is N300 (Business Times 2000). Despite this humiliating income figure, notwithstanding our riches, households' income is not guaranteed because of the seemingly insuperable unemployment problem in the country. This picture portends a very gloomy household food security in the country. This picture portends a very gloomy household food security situation in Nigeria with a very bad implication for nutritional and health status of an average household. The economic development of Nigeria is directly linked with the levels of productivity of the average Nigerian. But the productivity of labour is dependent on the nutritional intake (and health status) of the labour itself (ILO, 1981). And in Nigeria, while the sectoral contribution of agriculture to total export was about 72.0% in 1970, it declined to 2.3% in 1985 and has largely continued to stagnate or decline thereafter (Okunmadewa, et al 1999). The contribution of total agricultural output to GDP was 42.7% in 1986; it dropped to 40.4% in 2001. This made foreign exchange to drop.

    The costs of agricultural inputs continued to increase rapidly, also as a result of the low exchange rate of the national currency, the Naira. For instance fertilizer which was sold for an average of N141 per bag in 1985 and N200 in 1996 rose to N1,400 in 1997 (CBN, 1997, Okuneye, 2005). It is expected therefore that the cost of production of agricultural products would rise with an attendant increase in the cost of food. In the past three decades, the inflation rate has skyrocketed at a pace which has confounded policy makers. Both agricultural and manufactured commodities have been affected, though its effect on agricultural and food prices have been excruciating considering the fact that basic food need is topmost in the hierarchy of needs. This has affected the poverty level of different households. It is important to note however that the development of agriculture is highly necessary to ensure that more food is produced and made available to non-producers at reasonable prices so as to reduce poverty.

    Although accurate information about the total food supply in the country is hard to come by, available evidences indicate a somewhat dismal picture in the production of the various major food crops.

    Many things are unclear about the characteristics and causation of food demand in Nigeria. A great deal of probing investigation--analytical as well as empirical--is needed as background to understand food demand structure for appropriate public policy and action for eradicating famines and eliminating endemic under- nutrition. More evidence on this issue is necessary, particularly at the household level, as the general surveys may not be appropriate for bringing about possible solutions. Additional evidence is needed based on specific explanations. The present study attempts to fill this gap by providing further evidence on the understanding of food demand structure in South-western Nigeria.

    As a result of this, it is pertinent, therefore, to analyze food demand in South-western Nigeria. Then the questions that arise are:

    What is the food consumption pattern in south-western Nigeria?

    What are the factors affecting household food demand in the region and

    How can factors affecting household food demand be improved upon?

    These are some of the questions this study attempts to answer.

    The goal of this study is to analyze household food demand in South-western, Nigeria. This goal will be achieved through the pursuance of the following specific objectives:

    (i) To examine the socio-economic characteristics of households food demand in South-western Nigeria;

    (ii) To identify and measure the factors affecting the food demand among households in the study area;

    (iii) To analyze food consumption patterns.

  2. LITERATURE REVIEW

    Food is a basic human need and the major source of nutrients needed for human existence. Food security indicates the availability of and access to food. The place of agriculture in an agrarian society cannot be overemphasized given its importance in the life of human's beings. Agriculture is expected to ensure adequate supply of food to the people. Globally, there is enough food for all, but more than 780 million people are chronically undernourished. Millions of people in the developing world simply cannot obtain the food they need for a healthy and productive life ( )

    In the previous studies, there are several literatures on food demand in Nigeria, almost all of these contributed to the demand for individual food items. For instance Obi (2003) observed that production of animal protein has not been high enough to meet the demand of rapid population growth. Ganiyu (1982) observed that as consumer become more articulate and organised their demand for animal protein will have positive influence on production method. Several literatures are also available on the demand for rice as a food item. These include attempt by Odusina (2008) that looked at the urban demand for different rice types with a view to understanding the consumption pattern for local rice commodity and thereafter discovered the reasons for which local rice is not preferred to imported rice. To carry out these studies by various authors, they made use of the Almost Ideal Demand System (AIDS) and Linear Approximation of the strict AIDS model (LA-AIDS).

    AIDS model is non linear model and is difficult to estimate. Some studies used the linear approximate of AIDS and these studies include works such as Akinleye (2007) Savadogo and Brandt (1988), Fulponi (1989) Mergos and Donatos (1989) and Soe et al (1994). The model hypothesis that the portion of total expenditure that accrued to a particular commodity is related to prices and income.

    However, in this study we made use of Working Leser demand function as used by Chen et al (2003). In using this, an incidental truncation characteristic of the data was captured by using the Heckman's two step estimator.

    Given that food consumption and expenditure decisions have long-term diet and health consequences and a direct effect on development; and the importance of per capita food intake on human welfare and productivity through its influence on the capability of man to perform work and the attitude of man towards the work. This study intends to derive the nutritional implications of the demand for different types of food items and the effect or otherwise of unit changes in prices and income on the households consumption in south-western Nigeria.

  3. ETHODOLOGY

    3.1 The Study Area

    The data for this study were obtained from South-western Nigeria. South-western Nigeria is divided into six different states, namely: Lagos, Ogun, Oyo, Osun, Ondo and Ekiti states and fifty percent of these states was selected. The selected states were Ondo, Osun and Ekiti states. The study area is highly agrarian and highly endowed with mineral resources. The population is 5.94 million, which is 6.68 of the total population in Nigeria (CBN, 2003). According to information from the International Labour Office (ILO), the study area falls within three distinct vegetation zones--mangrove forest to the south, rain forest in the middle and guinea savannah to the north. The types of arable crops grown in the area include yam, cassava, maize, melon, cowpea, vegetables plantain and...

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