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