Channels Of Palm Oil Marketing In Etinan Local Government Area Of Akwa Ibom State
Chapter One
Introduction
1.1 Background of the Study
Oil palm Botanically known as Elaeis guineensis is a perennial crop that originates from the tropical rain forest of West Africa which includes Cameroon, cote d’lvoire, Ghana, Liberia, Nigeria, congo etc. Africans had practiced and processed palm oil for edible purpose for thousands of years. In fact it was part of the earliest practices undertaken by the African people. The extraction and use of palm oil can be dated back to 5000 years ago.
According to Flashback, (2014), during the 14th to 17th century some palm fruits were taken by the colonist into America and from there to the Far East and this led to the provision of the largest commercial production of an economic crop in the late 1800s. The export of palm oil began in 1832 and by 1911 West Africa alone exported 157,000 tones of which about 75 percent came from Nigeria. As people in Europe began to take sanitation and hygiene seriously, demand for soap increased, resulting in the demand for vegetable oil suitable for soap manufacture and other technical uses (Essien, 2013).
According to the Federal Ministry of Agriculture, from 1911, Nigeria was the largest world producer and exporter of palm oil. Thereafter, the British administrators took the plant to Malaysia and in 1934, Malaysia surpassed Nigeria and became the largest exporter of the product, it was as a result of three reasons, firstly was because of the civil war which began in 1900s which took place in the main palm oil producing states in Nigeria which includes Cross River, Abia, Imo, Rivers, Anambra, Enugu, Ogun, Osun, Delta, Edo, Oyo, Ekiti and Akwa Ibom State which is the main area of consent. The second reason that made Nigeria’s fortunes of palm oil production change was the discovery of crude petroleum deposits in commercial quantity. The third factor was the over reliance on traditional palm oil processing techniques. This reasons made Nigeria’s palm oil sector to be neglected and then lost its pride as the world leader in palm oil production of palm oil while Malaysia in the largest exporter of palm oil.
Matthew (2012) identifies two varieties of oil palm tree grown in Nigeria which are Dura and Tenera. Dura is the common wild palm found all over Nigeria, so Dura is the variety found in Etinan Local Government of Akwa Ibom State. The fruit of Dura has a thick shell and a large kernel, it gives a low amount of palm oil and begins to yield 6 to 7 years after planting. While Tenera has a thin shell and a small kernel, it produces a high quantity of palm oil, it bears fruit 3 to 5 years after planting. This type is grown in the new plantations.
As observed by Ebong (2012), in Akwa Ibom State Palm Produce business first started in the riverine Communities of Eket and Ikot Abasi Local Government Area where Ibo traders found and started buying palm oil in large quantity but at very cheap rates. As the population of the people increased and the demand of palm oil at international market increased, attention for palm oil shifted to Abak, Ikot Ekpene, Ikono and Etinan Local Government Areas. According to Udoh, (2014), the success of the palm oil business depends largely on women who constitute the necessary cheap labour force for palm oil production in Etinan.
Ephrim (2013) observes that the economic importance of palm tree makes the business more profitable to the people because both the palm trunk and the palm frond are used for construction of residential buildings, the shaft at the middle of the palm front are used for broom making, while the frond are also used for making of fence by the rural people. The residue from milled-palm fruits is used for the manufacturing of animal feeds, and firewood for domestic cooking, while the cracked kernel shells are used for local road repairs and construction of residential buildings and oil used for many functions starting from the domestic functions as edible oil and for making fat margarine. The industrial function are for making soap, candle, plastics etc. Ephraim (2014) and chambers (1995) observed and reported that no part of the oil palm tree is wasted.
According to the federal ministry of Agriculture Akwa Ibom State was third producer of palm oil in Nigeria in 1997 (FMA, 1997). Taking a view of the figure for palm oil production by producing states from 1996-2000, it is observed that in 1996/1997, Imo State was leading in palm oil production with 122,000 tones followed by Cross River State with 121,000 tons and thirdly by Akwa Ibom State with 120,000 tons in 1998, Abia State was leading with 97.30,000 tons, Akwa Ibom State came second with 97.20,000 tons while Cross River State came third with 87.59,000 tons, and between 1999/2002 Akwa Ibom State became the leading producer of palm oil with 102.12,000 tons. (FMA, 2002).
Ezealaji (2012) describes channels of palm oil marketing as that which is concerned with all stages of operation that aid movement of the produce from the producer to the final consumer which includes assemblage storage, transportation, grading and financing. Marketing of palm oil takes place in homes, road sides, local and periodic market centre and stalls. This can be both wholesale and retail types in both rural and urban centers. Marketing channels begins with the producer, from the producer to the wholesale, from the wholesale to the retailer and from the retailer to the final consumer. Each of this marketing channels functions and operate differently, that is why the essence of this research is to examine how each marketing channel operate and functions in palm oil marketing in Etinan Local Government Area of Akwa Ibom State.
1.2 Statement of Problem
Previous studies on the marketing and pricing of food stuffs in different parts of Nigeria have concluded that the marketing and pricing information transmission are inefficient although there are many buyers and sellers in the market. Also, the paucity of physical infrastructure such as storage facilities, transportation system, access roads, communication channels and inadequacy of economic data for planning and research are some factors identified as source of inefficiency (Dittoh, 2014).
According to Anyaele (2011), there have been an augment whether the middlemen which includes the wholesales and retailers should be eliminated from the marketing channel of distribution especially the wholesaler because it is believed that the are responsible for the increase of price of commodities in the marketing channel. The high rising prices and scarcity of goods attributed to the middlemen are the major criticisms leveled against them. Thus, the study will examine the marketing channels that the marketers in Etinan have adopted despite all this problems.
1.3 Research Questions
The study therefore sought answers to the following research questions as follows;
What are the production processes of palm oil in the area?
What are the available channels of palm oil marketing?
What are the socio-economic contributions of palm oil marketing to the study area?
What are the challenges of palm oil marketing in area?
1.4 Aim and Objectives
The general aim of this study is to examine the channels of palm oil marketing in Etinan Local Government Area. To achieve this aim the study focuses on the following objectives:
To examine the production process of palm oil in the study area.
To examine the available channels of palm oil marketing in the area.
To asses the socio-economic contribution of palm oil marketing to the study area.
To asses the challenges of palm oil marketing in the study area.
1.5 Research Hypothesis
Ho: Palm oil marketing does not contribute to the livelihood of it marketers.
1.6 Relevance of the Study
This research is meant to help several calibers of individuals. The study is aimed at providing information that will be of great value to the society, it will help in analyzing the demand and utilization and facilities production and marketing of palm oil.
First, student under palm oil production and marketing at various locations can obtain information that will assist them improve on marketing function strategy and the distribution of their products. It can also serve as a guide to a productive researchers whose intention is to establish palm oil marketing firms, the information provided on this study will assist and enable them know what to do, thus, it will help them to minimize cost and maximize profit thereby motivating their standard of living. The study will also help policy makers in the formulation and implementation of relevant policies that will upgrade oil palm marketing.
1.7 Scope of the Study
This research covers the marketing areas of palm oil in Etinan Local Government Area. Though the study intended to cover the entire Local Government Area, but only six (6) communities with active marketing was considered, which includes Iwo efor, Efa, Ikot Ekot, Ikot Mfom, Ikot-Ese and EKpene Ukpa.
1.8 Limitation of the Study
The limitation encountered during the course of this study were mostly time, language and financial constraints where a page of the work was typed at the cost of N70 in addition, most farmers (palm oil producers) were not able to read the context of the questionnaire due to their poor level of education.
1.9 The Study Area
1.9.1 Location and Area Extent
Etinan Local Government Area is located between latitude 4051’N and 4085’N and longitude 7050’E and 70 83’E with elevation of 38m above sea level. It is 26 kilometers South of Uyo, Akwa Ibom State Capital and 24 kilometer North of Eket. It is bounded by the North by Uyo and the South by Onna. The Local Government was created in 1976 following the recommendation of the commission of the South Eastern State of Nigeria. Etinan was created out of the former Uyo Division with Etinan as its headquarter (Inyang, 2000, Usoro, 2010).
1.9.2 Climate
The entire Local Government lies in the tropical rain forest belt and has two distinct seasons, the area is dominated by two air masses which are tropical maritime and tropical continental air masses. The humid tropical maritime and associated southwesterly winds which blow across the Atlantic ocean usher in the wet season between April-October. The second is cold, dry, dusty tropical continental air masses with associated harmattan winds which blow from the Sahara desert and it is called North East trade winds. This is usually experienced between December and February. The temperature remains relatively constant throughout the year but reduced by cloud cover in the rainy season (Inyang, 2000).
1.9.3 Relief and Drainage
Etinan lies entirely on the coastal plain of Nigeria, an area that resulted from gradation activities of the past. The elevation ranges between 20 to 38m above sea level (Usoro, 2010). The major drainage system is the Kwa Ibo River which traverses the area. These rivers almost divided the Local Government into two parts. There are other permanent streams and seasonal lakes that provide domestic and laundry water to the people (John,
1.9.4 Vegetation
Etinan Local Government lies within the tropical rain forest but the original vegetation has been degraded mostly by farming and settlement (Inyang, 2000). The vegetation is made up of farmlands as well as fallow lands that range from three to five years. Consequently, the present climatic conditions consist mostly of secondary forest and scattered economic trees like oil palm (Elaesis guineensis), raffia palm, Iroko, Indian Bamboos. However, relies of former luxuriant tropical forest can still be found in a few reserved areas along Ekpene Ukpa Creek, Atere Ekaidem at Iwo Etor and Owot Ndedeng at Ikot Ekot (Joh, 2005). Presently, the area is dominated with oil palm trees with scattered economic trees to substances.
1.9.5 Geology
Etinan Local Government Area is underlying by sedimentary rock formation known as the coastal plains sands. The coastal plains sands are fluvial in origin and must have subjects to frequent and raid changes (Udosen, 2009). The materials on which fluvial and mass wasting processes acts upon lack cementing agents with weak and loosed particles. The major rock components are ferricrete, calcrete, sand, stone, crud gravel ferricrete which constitute the main aspects of duncrus occasioned by deep weathering profile. The geomorphology of the area can be described as the undulating how land coastal plains which form the largest geomorphic unit.
The area has a total load area of 107659km with a PH of 4.7 to 5.0. The soil moisture is low, moderately low to medium and the texture of medium cocuse loamy sand over sandy clay loamy, (Ekpeyong, 2014).
SOIL
The soil of the area have a very low basic cation nutrients, thus only support agricultures with fertilizer application.
1.9.6 Population
According to the National population census 2006, Etinan Local Government Area has the total population of male to be 87907, female 79377 with a total of 167,284 spreading over an area of 18232259km. The local government has a density of 928 per square kilometer. The people are entirely of Ibibio origin and thus, speak the Ibibio language as their native dialect in general communication (Usoro, 2010).
1.9.7 Occupation
The major occupation of the people is farming and trading. Crops cultivated include yam, cassava, cocoyam, sweet yam, maize, banana, plantain, oil palm etc. The large extent of are able land made it possible for local farmers to intensively cultivate on the land. In terms of trading, Etinan Local Government has eight major markets that attract people outside and within the state. The uniqueness of this market is that they are selling on different days and are regulated based on the traditional periodic days which allows the local farmers to bring out their farm produce to the intended buyers. A number of people also engage in welding, wine tapping, carpentry work, sewing, painting, hawking, sand and gravel mining and palm oil processing (Usoro, 2010).
1.10 Definition of Terms
Market: A market is a site where sellers and buyers meets on specific days to exchange goods and services (Daniel, 2004.
Marketing: Moro (2014), defines marketing as the performance of all business activities involved in the flow of product from the point of production until the goods gets to the final consumer.
Marketing Channels: There are the ways or means through which products pass from producers to consumers and this involves many people (Moro, 2014).
Palm Oil Marketing: According to Alan (2013) palm oil marketing is a set of economic and behaviour activities that involves the coordination of various stages of economic activities from production to consumption. Palm oil marketing is also concerned with all stages of operational that aid movement of the produce from the producer to the final consumer which includes assemblage, storage transportation, grading and financing (Ezealaji, 2012).