AN ANALYSIS OF DEMAND, SUPPLY AND ELASTICITIES OF SEED POTATO IN MAJOR PRODUCING AREAS IN NIGERIA
Lenka, D.M., Dung, E.A. and Asumugha, G.N.
Objectives
Identify and describe socio‐economic characteristics of the seed potato
producers and seed potato traders
Estimate and analyse the demand and supply functions for seed potato in
the major producing areas
Examine the relative demand, supply elasticities and cross‐elasticities for
seed potato
Make recommendations for increasing the demand and supply of seed potato
Introduction• Potato is an important tuber crop both as a food and cash crop in potato
producing areas of Nigeria• Nigeria is the fourth biggest producer of potato in Sub-Saharan Africa, with
output of 840 000 tonnes in 2007 (Lutaladio, 2009)• Nigerian estimated area cultivated under potato was 266,000 hectares with
an average yield of 3.27 tonnes/ha (FAO, Statistics 2008) • Nigeria has the lowest per capita potato consumption in Africa (3.27kg)
(FAO, Statistics 2008)• Jos Plateau accounts for over 90% of potato production in Nigeria• lack of quality seed and high prices are the major factors affecting potato
production• Factors such as labour, farm size, fertilizer, income, education, farming
experiences of households etc influence the supply and demand for root and tuber crops
• This study assessed the influence of socio-economic variables and prices of complementary and substitute products on the demand and supply of seed potato in major potato producing areas.
Methodology
Study area:Bokkos, B/ladi, Mangu, Jos South, Riyom, Jos North local government
areasSampling Method• A total of 90 seed potato producers and 90 Traders were selected
using multistage and random sampling techniques i.e., – From 6 local government areas, 3 districts were selected and 5 farmers each
were selected randomly from each village
• Data collection and statistical tools• Primary data were collected on household socio‐economic
characteristics, input and output data and prices of complement and substitute crops both on the demand and supply side.
• Multiple regression model, descriptive statistics were used to estimate the demand and supply functions. Elasticity of demand and supply were derived from these estimates.
Results and discussion
Table 1: Distribution of farmers according to socioeconomic characteristics
Variables Frequency Percentage
Age of producer (yrs):20‐3940‐5960‐79
225315
24.458.916.7
Education (yrs):O‐67‐12>12
314615
34.451.114.5
Gender:Female:Male:
3258
35.664.5
Disposable income (N):100000‐300000 ($625‐1875)301000‐700000 ($1875‐4375)>701000 (>$4375)
382923
42.232.225.6
Farm size:0.1‐2ha2.1‐5ha>5ha
304317
33,347.818.9
Experience (yrs):1‐10yrs11‐20yrs>20yrs
363321
4036.723.3
Table 2: Demand functions for seed potato in major potato producing areas
Variables Est. Coefficients Std Error T‐Value
Constant ‐29.29 20.59 ‐1.42
Age of household hd (yrs) 6.73 4.96 1.36
Educational level (yrs) 21.24 10.01 2.12**
Income 0.2754 0.06 4.52***
Labour (availability) ‐34.67 27.49 ‐1.26
Farm size (ha) 7.6251 9.24 8.25***
Experience (yr) 17.7 57.5 0.31
cocoyam ‐0.97 1.05 ‐0.92
Sweet potato ‐0.637 0.650 ‐0.98
yam ‐0.313 0.523 ‐0.60
Price of seed potato (N) ‐10.25 4.29 ‐2.39**
Fertilizer (kg) 266 59 4.51***
R2 92
F‐value 98.43***
** significant @ 0.05 probability level: *** significant @ 0.01 probability level
Table 3: Estimated elasticities of explanatory variables on demand for seed potato
Variable ElasticityAge (yrs) ‐0.03Education (yrs) 0.00
Income (N) 0.37Labour (manday) ‐0.03Farm size (ha) 0.00Experience (yrs) 0.007Cocoyam ‐0.01Sweet potato ‐0.10Yam ‐0.01Price of seed potato (own elasticity) 0.08Fertilizer (kg) 2.62
Table 4: Determinants of supply of seed potato in Major potatoproducing areas
** significant @ 0.05 probability level: *** significant @ 0.01 probability level
Variables Est. Coefficients Std Error T‐value
Constant 96.12 75.27 1.28
Gender ‐1.26 3.07 ‐0.41
Educational level 29.43 54.27 0.54
Income 0.0215 0.08 0.27
Household size 36.12 17.65 2.05**
Price of seed potato ‐2.12 8.10 ‐0.26
cocoyam 2.20 1.57 1.40
Sweet potato 0.338 1.0 0.34
Yam ‐0.812 0.80 ‐1.01
Labour cost 258 44.6 0.565
Experience 17.28 8.51 2.03**
R2 30.4
F‐Value 0.226
Table 5: Elasticities of supply of seed potato in Nigeria
Variables ElasticitiesGender 0.20
Educational level 0.001Income 0.052Household size 0.001Price of seed potato ‐0.02cocoyam 0.05Sweet potato 0.01Yam ‐0.02Labour cost 0.18Experience 0.001
ConclusionThe study indicated that seed potato farmers in the major potato
producing areas are predominantly middle aged (40‐59 yrs)51%, 47.8% and 40% had o’level certificate, farm size of 2.1‐3ha and
farming experience of at least 10 years respectivelyRelevant economic variables that positively and significantly influence the
demand for seed potato are farm size, fertilizer and incomeown price of the seed potato negatively and significantly influenced the
demand for seed potato and The own price elasticity of demand for seed potato is inelastic implying
that increase in price of seed potato will bring in the long run less than proportionate decrease in the demand for seed potatoRelevant economic variables that positively and significantly influence the
supply of seed potato are household size and farming experienceThe elasticities of other variables were less than 1 (inelastic) implying that
in the long‐run percentage changes in these variables will bring less than proportionate change in seed supply.
Policy implications
This results call forPolicies that will provide legal protection and support on pricing to
protect producers and traders against price exploitationPolicies that will regulate farm labour practices and improve access
to mechanized labour and also provide off‐season income to farmersFacilitate the production of fertilizer by the private sector and
control the quality of fertilizers and other farm inputsProvide quality education to farmers to apply modern knowledge in
production and marketingStrengthening the modernization and use of indigenous knowledge
in potato productionSeed inspection and certification policies