ECONOMIC EFFECTS OF CRUDE OIL EXPLOITATION ON CASSAVA PRODUCTION IN DELTA STATE

A DISSERTATIONSUBMITTED TO THE DEPARTMENT OF AGRICULTURAL

ECONOMICS, UNIVERSITY OF NIGERIA, NSUKKA IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD

OF MASTER OF SCIENCE IN AGRICULTURAL ECONOMICS

BY

ERHIEGUREN, ENDURANCE AHEROBO(PG/M.Sc/00/28059)

MAY, 2012

i

CERTIFICATION

We certify that Erhieguren Endurance Aherobo, a postgraduate student of the Department of

Agricultural Economics with registration number PG/M.Sc/00/28059 has satisfactorily

completed the requirements for the course and research work for the award of Master of Science

(M.Sc) in Agricultural Economics. This research work has been approved for the Department of

Agricultural Economics, University of Nigeria, Nsukka.

………………………………….. ………...………………….SIR PROF. NOBLE J. NWEZE DATE (SUPERVISOR)

………………………………….. ………...…………………. PROF. E.C. OKORJI DATE(HEAD OF DEPARTMENT)

ii

DEDICATION

This work is dedicated to Almighty God for His infinite mercy, love, provision and protection

throughout the period of this study and to my late father, Mr. Samuel Eyererha Erhieguren, who

was an agriculturist.

iii

ACKNOWLEDGMENT

I hereby express my profound gratitude to my supervisor, Sir Prof. Noble J. Nweze for his

patience, fatherly advice and assistance too numerous to mention. You are a father indeed. My

profound gratitude also goes to the Head of Department Prof. E.C. Okorji and all the lecturers in

the Department of Agricultural Economics whose criticisms helped in no small ways to improve

the quality of this work. I am also grateful to all the cassava farmers from whom data for this

study were gathered. The readiness, joy and hospitality they displayed debunk the widely

acclaimed notions about hostility of the Niger Delta people.

I would also want to thank the following friends for their encouragement: Mr. Johnson E.

Okubotimibi, Mr. Ikuejawa Ishmeal Igbekele, Mr. Godfrey Akpos Redje, Miss Ruth Ogwegha

Uyoyou – my word processor and others too numerous to mention. To my loving and darling

wife Mrs. Martha O. Erhieguren whose all encompassing support made this dream a reality, I say

thank you.

Finally, I thank God for the strength and grace given to me to sail through the hurdles of the

entire M.Sc programme. May His name be praised and glorified forever. The usual disclaimer

holds; those acknowledged share in the virtues; the errors therein are entirely mine.

iv

ABSTRACT

This study examined the economic effects of crude oil exploitation on cassava production in Delta State. Specifically, the effect of crude oil exploitation on land productivity, farm income and cassava yield was explored. The costs and returns, and hence profitability of cassava production as influenced by oil pollution, the farming systems and socio-economic characteristics of cassava farmers were critically examined. Copies of well structured questionnaires were used to collect primary data from a sample of 204 small scale cassava farmers drawn using stratified and simple random sampling techniques from the three (3) agro-ecological zones of Delta State between October 2007 and February 2009. Data were analyzed using descriptive statistics, costs and returns analyses, net margin and regression analyses. The results revealed that total fixed cost per cassava farmer was N27,624.49 while total variable cost per cassava farmer was N19,108.68. Total output of cassava product (garri) before and after oil spill incidents were 48,636kg and 40,549.22kg with an average yield of 328kg and 274kg respectively per cassava farmer. A net margin of N27,846.43 and N19,206.43 before and after oil spills incidents per cassava farmer, indicating a 31% reduction in profit, was also revealed. Using the Ordinary Least Square (OLS) multiple regression method to estimate the effect of crude oil exploitation on the major dependent variables, the linear functions had the best fit with adjusted R2 of 0.432 and DW-statistic of 2.08 for land productivity, adjusted R2 of 0.953 and DW-statistic of 1.537 for farm income and adjusted R2 of 0.950 and DW-statistic of 2.015 for cassava yield. The results of the regression analyses and all the hypotheses tested using the paired t-test statistic at 1% and 5% probability levels, indicated that crude oil exploitation had a negative and statistically significant effect on cassava production in consonance with a prior expectations. Thus, it is recommended among other measures that government at all levels should take pragmatic steps at enacting and enforcing stringent environmental laws that will protect the oil producing farming communities as well as guaranteeing the people a better means of livelihood.

v

TABLE OF CONTENT

Title Page i

Certification ii

Dedication iii

Acknowledgement iv

Abstract v

Table of content vi

CHAPTER ONE

INTRODUCTION

1.1 Background Information 1

1.2 Problem Statement 4

1.3 Objectives of the Study 7

1.4 Research Hypotheses 7

1.5 Significance of the Study 8

CHAPTER TWO

LITERATURE REVIEW

2.1 A Brief History of Petroleum Development in Nigeria 9

2.2 Oil Exploitation and Environmental Pollution 10

2.2.1 Meaning of Oil Exploitation and Pollution 10

2.2.2 Sources and Types of Oil Industry Pollution 12

2.3 Oil Spillage and Pollution 14

2.3.1 Causes of Oil Spillage 15

vi

2.3.2 Frequency and Magnitude of Oil Spills 15

2.4 Effects of Oil Exploitation 18

2.4.1 Oil Exploitation and Land Availability for Agriculture 19

2.4.2 Oil Exploitation and Soil Pollution 21

2.4.3 Effect of Oil Exploitation on Water/Aquatic Lives 23

2.4.4 Oil Exploitation and Hydrocarbon Pollution of Air 25

2.4.5 Oil Exploitation and Rural/Urban Migration 26

2.5 Oil Companies and Corporate Social Responsibility 27

2.6 Farming System in Cassava Production 31

2.7 Farm Resource Use 32

2.8 Valuation of the Environment: Empirical Measures 33

2.8.1 Non-Market Demand Approaches 34

2.8.2 Market Demand Approaches 34

2.9 Productivity Implications of Environmental Pollution 36

2.10 Conflicts and Resource Use 38

2.11 Theoretical Framework 40

2.11.1 Integrated Environmental Impact Model for Oil and Chemical 40

Spills

2.11.2 Concept of Agricultural Resource Productivity 41

2.12 Analytical Framework 42

2.12.1 Multiple Regression Analysis 42

2.12.2 Gross Margin/Profit Function Analyses 42

2.12.3 The Student’s “t” Test 43

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CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Study Area 45

3.2 Sampling Procedure 46

3.3 Data Collection 47

3.4 Data Analyses 48

3.4.1 Model Specification and Estimation 49

3.4.2 Gross Margin Analysis 51

3.4.3 Hypotheses Testing 52

CHAPTER FOUR

RESULTS AND DISCUSSION

4.1 Farming Systems of Cassava Farmers 53

4.2 Socio-Economic Characteristics of Cassava Farmers 54

4.3 Profitability Analysis of Cassava Farming 56

4.3.1 Cost Analysis in Cassava Farming 56

4.3.2 Returns in Cassava Production 59

4.3.3 Net Margin Analysis 61

4.4 Corporate Social Responsibility of Oil Companies and Cassava

Farming Activities 63

4.5 Effects of Crude Oil Exploitation on Land Productivity and Farm

Income of Cassava Farmers 66

4.6 Effect of Oil Pollution on Cassava Farm Income 69

4.7 Effect of Crude Oil Pollution on Cassava Yield 71

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CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary of Findings 74

5.2 Conclusion 76

5.3 Recommendations 76

5.4 Contribution of Knowledge 78

5.5 Suggestion for Further Study 78

References 79

Appendix 94

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LIST OF TABLES PAGE

1.1 Nigeria Net Oil Revenue (N million) 3

2.1 Oil spills in Nigeria (1976-1996) 16

3.1 Communities Surveyed and Sample Sizes 47

4.1 Farming Systems of Cassava Farmers 53

4.2 Distribution of Socio-Economic Characteristics of Cassava

Farmers 54

4.3 Average Fixed and Variable Costs in Cassava Production per hectare 57

4.4 Total and Average Yield of Garri per Cassava Farmer before and

after Oil Spill Incidents 59

4.5 Test for Difference in Yield of Garri before and after Oil Spill

Incidents 60

4.6. Cost and Returns in Cassava (Garri) Production per Cassava Farmer 61

4.7 Depreciation of Fixed Cost Items 62

4.8 Test for Difference in Net Margin (Profit) per Cassava Farmer

before and after Oil Spill Incidents. 63

4.9 CSR: Responses of Male Cassava Farmers. 64

4.10 CSR: Reponses of Female Cassava Farmers. 64

4.11 Farmers’ Response as to whether CSR of oil companies has

improved their farming activities 65

4.12 Regression Results on Factors Affecting Land Productivity in

Delta State 67

4.13 Factors Affecting Cassava Farm Income in Delta State 69

4.14 Factors Affecting Cassava Yield in Delta State 71

x

CHAPTER ONE

INTRODUCTION

1.1 Background Information

One of the most discussed issues in Nigeria in recent time is that of sustainable development.

Sustainable development, according to the Bruntland commission, is development that meets the

needs of the present generation without compromising the ability of future generations to meet

their own needs (World Commission, 1987).

Agriculture plays fundamental role in the development of any economy. Thus, according to

Uwakah et al, (1991), agriculture is the bedrock of the economic development of most

developing nations. Edordu, (1986) put it succinctly as follows: “experience has shown that no

modern developed country around the world achieved rapid industrialization without having

previously or simultaneously attained a marked increase in agricultural production”. The

contribution of agriculture to development, most especially in the developing countries includes

provision of food supplies, employment, capital formation, release of labour for industrial

development and fibre needs of industries (Okorie and Eboh, 1999; Njoku, 2000; FAMRD,

2002). This implies that agriculture is very crucial to the social and economic development of

Nigeria.

Agriculture is a vital business enterprise having various components. One of these components

that is productive in nature is crop production-a component that dominates largely the Nigerian

agricultural scene. It is noteworthy that agriculture in Nigeria is dominated by small scale

farmers who are responsible for about 90 percent of the total production (Olatunbode, 1990). The

small holder farmers usually have farm sizes ranging between 1-4 hectares and cultivate mainly

staple food crops (Obinne and Mundi, 1999).

1

In recognition of the importance of crop production in the Nigerian economy, successive

governments in Nigeria have undertaken various policy measures to revitalize the agricultural

sector. However, none of these measures has yielded adequate fruitful result. This is an evidence

of the fact that the bulk of Nigeria’s foreign currency earning presently comes from crude oil and

gas. NNPC, (2004) reports that the national budget depends heavily on the revenue expectation

from oil and gas and this will remain for a while. Thus, the dominant role of crude oil has pushed

agriculture, the traditional mainstay of the economy from the early fifties and sixties, to the

background.

According to Onwudiwe, (2003), there are eighteen oil companies operating currently in Nigeria.

These companies operate over 159 oil fields and produce from over 1,481 oil wells. Of this

figure, the Shell Petroleum Development Company (SPDC), controls about half (83 oil fields

and 748 oil wells). All of these are almost exclusively in the Niger Delta region.

Oil production in Nigeria has come a long way from the early days of the 1950s. Today, of

Africa’s proven crude oil reserves of some 66 billion barrels, Nigeria accounts for 25 billion

barrels, more than 35 percent of the total. Therefore, the significance of oil in Nigeria’s political

economy has grown considerably. From accounting for one percent of Nigeria’s export earning

in 1958, it now accounts for up to 98 percent of export earnings; and from accounting for some

70 percent of total government revenue in 1970, it now accounts for between 80 and 90 percent.

This phenomenal rise is attributable to crude oil output, which grew from 1.88 million barrels in

1958 to 822.75 million in 1974 and to 547.08 million in 1985 (NNPC, 1985). This figure rose

significantly to 751.8 million barrels as at 1996 (CBN, 1996).

2

According to CBN, (2000) Nigeria’s crude oil production, including condensates, rose by 11.2

percent over the level in the preceding year (1999) to 2.18 million barrels per day (mbd).

Consequently, net oil revenue rose sharply from N204, 848m in 1996 to N857, 582m in 2000 as

shown in the following table.

Table 1.1: Nigeria Net Oil Revenue (Nmillion)

Fiscal Year Oil Revenue (Net)

(N million)

1996 204,848.0

1997 218,727.3

1998 166,333.1

1999 1/ 336, 131.6

2000 2/ 857,582.2

Sources: Federal Ministry of Finance Central Bank of Nigeria. In CBN Annual and Statement of Accounts for the year ended 31st December, 2000 (P. 102).

Extracted from Federation and Account Operation 1/Revised2/Provisional

There is therefore, no doubt that the Nigerian oil industry has affected the country in a variety of

ways. On one hand, it has fashioned a remarkable economic landscape for the country. However,

on the negative side, petroleum exploration and production also have adverse effects on fishing

and farming which are the traditional means of livelihood of the people of the oil producing

communities in the Niger Delta region of Nigeria, specifically Delta State.

Eteng, (1997) asserts that “oil exploration and exploitation had over the last four decades

impacted disastrously on the socio-physical environment of the Niger-Delta Oil-bearing

communities, massively threatening the subsistent peasant economy and the environment and

hence the entire livelihood and basic survival of the people”.

3

In a similar vein, Gbadegesin, (1997) averred that “oil exploration and production in South

Eastern Nigeria, has adversely affected peasant agriculture, the basis of sustenance of millions of

rural inhabitants through a complex web of interaction of several negative environmental factors.

Such factors include contamination of streams and rivers, the problem of oil spill, forest

destruction and bio-diversity loss, the environmental effect of gas flaring and effluent discharge

and disposal”. Thus, if the oil industry is considered in view of its enormous contribution to

foreign exchange earnings, it has achieved a remarkable success. On the other scale, when

considered in respect of its negative impact on the socio-economic life and the environment of

the immediate oil bearing local communities and their inhabitants, it has left a balance sheet of

ecological and socio-physical disaster. This rightly provides a framework to carry out an

economic assessment of the effects of crude oil exploitation on small scale cassava production in

Delta State of Nigeria.

1.2 Problem Statement

Before the discovery of oil in Nigeria, and even up to the time of Nigeria’s political

independence in 1960, agriculture was undisputably the mainstay of the country’s economy,

providing employment for the bulk of the population and bearing the physical brunt of economic

development. As a share of GDP, agricultural output (crops, livestock, forestry and fishery)

accounted for 41.5 percent, compared with 41.0 percent in 1999 (CBN, 2000). This corroborated

the report of Erinle and Mijindadi (1992) that agriculture is the most important enterprise in the

country employing over 60% of the total labour force and providing over 40% of the National

Gross Domestic Product (GDP).

Toluyemi, (1990) asserts that the small scale farmers constitute the bulk (about 60%) of the

Nigerian farmers. These peasants, operating at low level of resource inputs are constrained by a

4

number of factors. These factors, as summarized by FMAWR and RD, (1994), are technical,

socio-economic, organizational and institutional problems. In recent years, however, the oil

boom has compounded the problem of agriculture.

According to Onyige, (1996), the euphoria that followed the large revenues from oil, among

other things, not only led to the neglect of other sectors of the economy, particularly agriculture,

but also to a neglect of the effects of oil exploitation on the areas in which it is taking place. One

other way in which oil exploration has affected agriculture is through pollution. Uchegbu,

(2002), citing Imevbore, (1973), maintains that the various activities in all the phases of the oil

industry are sources of emissions and products whose entry into the natural environment

produces effects of pollution greater than the amount that can be controlled by natural self

purification capacity of the ecosystem. Unfortunately, a review of nearly three decades of

development planning in the country (1962-1985) shows that government planning did not take a

serious view of these externalities nor has planning been sufficient to prevent poor distribution of

wealth, uneven resource allocation and undesirable exploitation patterns (Onyige, 1996).

Oil production in Nigeria, has had severe environmental and human consequences for the

indigenous people who inhabit the areas surrounding oil extraction. Of course, it is precisely the

peasants in the oil-producing areas, especially farmers, who are the main victims of industrial

pollution. Degradation of the environment through pollution has had serious consequences for

peasant economy and society. Obioma, (1985), argues that the problem of the oil communities is

not just that they do not gain from the oil operations but that they suffer numerous and severe

damages to their economic resources.

5

The above is justified in the minutes of meeting between Rivers State Government, the Egbema

liaison committee and Nigerian Agip Oil Company Limited (NAOC), 30 December, 1981 which

contain the devastating effects of oil exploitation on the people of Egbema particularly farmers

and fishermen. A similar point was also made by the Egbema Youth Association in a reminder to

NAOC about the repercussions of its industrial activities in their farmlands, claims which equally

apply to oil producing communities in Delta State.

Corroborating all the assertions above, Mba, (2001) maintains that the people of the rural Niger

Delta communities live with a deep sense of loss and deprivation. The communities are found to

be suffering immense human, economic, ecological or environmental and agricultural damages

on the account of the operations of the oil exploration companies there, notably the Shell

Petroleum Development Company (SPDC). While reporting on the damaging effects of gas

flaring, an integral part of oil exploration and exploitation on the communities of the Niger Delta

where oil prospecting takes place, Adegbulugbe, (1994), asserts that cumulative gas flaring

between 1965 and 1987 amounted to 3.15 x 1011m3. This represents a significant amount of

pollutants discharge into the atmosphere with consequent negative impacts on the growth of

vegetation and increased localized haze in the affected areas (Salau, 1987). Ibe, (1998) in his

view, reports that oil spillages from SPDC had consequently led to the pollution of water and

destruction of both aquatic life and agricultural land in their host communities.

Thus far, the pollution of farmlands, water bodies, top soil depletion, deforestation and other

ecological and economic problems by oil exploration and exploitation activities had culminated

in the small scale crop producers experiencing diminishing returns to their efforts year in year

out. Emphasis has always been placed on increased crude oil exploration without giving enough

thought to how the environment and agricultural productivity are affected and ways of

6

controlling oil spillage and other forms of pollution by the exploring companies concerned. It

should be noted that in Nigeria, as in other developing countries, a key policy objective targeted

at achieving sustainable human development is to establish energy development paths that are

economically efficient and environmentally sustainable. Though theoretical explanations abound

on the impacts of oil exploration on the environment, there is a dearth of empirical studies on

how it economically affects the activities of small scale crop producers (especially cassava) in

Delta State. Thus, there is the need to undertake a detailed economic study of the effects of oil

exploitation and other related activities on cassava production by small-scale farmers in Delta

State with a view to improving the living standard of the people.

1.3 Objectives of the Study

The broad objective of this study is to assess the economic effects of crude oil exploitation on

cassava production in Delta State.

The specific objectives are to:

i. describe the farming systems and examine the socio-economic characteristics of cassava

farmers in Delta State.

ii. assess the effects of crude oil exploitation on land productivity and farm income of

cassava farmers in the study area.

iii. ascertain the effects of crude oil pollution on cassava yield in the study area.

iv. determine the costs and returns and hence, profitability of cassava farming as influenced

by oil exploitation

v. describe the extent to which corporate social responsibility of oil companies has

improved the activities of cassava farmers in the study area.

vi. make policy recommendation based on research findings.

1.4 Research Hypotheses

The following hypotheses were tested in the study.

i. Oil pollution has no significant effect on land productivity of cassava farmers.

7

ii. Oil pollution has no significant effects on cassava yield in Delta State.

iii. Oil exploitation has no significant effect on farm income of cassava farmers.

iv. Socio-economic characteristics of cassava farmers have no significant effect on cassava

production.

1.5 Significance of the Study

Agriculture forms a major economic activity in Nigeria particularly in the Niger Delta region.

According to CBN (2010) the overall contribution of agriculture to real GDP was N316, 728.70

million. Of this total, crop production accounted for about 89%.

Thus, in attempting to build an environmentally sustainable economic and social order, we have

to be virtually concerned about safe-guarding the life-support systems of the oil-bearing

communities of which crop farming is one of such life support systems. It is therefore, essential

to create a broad awareness of the actual or potential hazards threatening the subsistent peasant

economy and the environment and hence the entire livelihood and basic survival of the people.

As mentioned earlier, no much emphasis has been placed on how oil exploitation and its related

activities have impacted economically or otherwise on small scale crop farmers in Delta State.

The researchers, therefore, believes that this study will enable the oil companies appreciate the

extent of damage done through their activities on the agricultural resources of the area and to

take appropriate step(s) to remedy such situations. The study will also give an insight into the

effects of oil exploitation on the socio-economic lives of small-scale crop farmers in Delta State.

It is also hoped that the research findings will draw the attention of the multi-national oil

companies and every other stakeholder in the oil industry to be aware of the hardship being

suffered by farmer’s vis-à-vis oil exploitation so that policies could be aimed at alleviating the

suffering of these people.

8

CHAPTER TWO

LITERATURE REVIEW

2.1 A Brief History of Petroleum Development in Nigeria

Three phases can be identified in the history of exploration and production (E&P) activities in

the petroleum sector (Orubu, 2002). The first phase started in 1908 when a German entity,

known as Nigerian Bitumen Corporation started exploring for petroleum in the Western Regions

of the country, specifically, Araromi Area (NNPC, 2004). Exploration activities were suspended

following the break out of the First World War in 1914. The second phase of exploratory

activities started in 1937 when an Anglo-Dutch consortium under the name of Shell D’Arcy was

granted an exploration license covering the entire area of Nigeria of 950, 530 square Kilometres

(CRP, 1999). The British Colonial Government gave Shell D’Arcy sole concessionary rights to

explore for petroleum in all parts of Nigeria. Again, the Second World War broke out in 1939

and this affected Shell D’Arcy’s operations which were suspended until after the war. Thus, the

third phase of petroleum E & P activities started in 1947 after the Second World War when Shell

D’Arcy returned as Shell-BP.

Shell-BP carried out intense exploratory activities in the then Eastern Region in the 1950’s and

in 1956; it struck the first commercial well at Oloibiri in present day Bayelsa State. Commercial

production and export of crude oil from the Oloibiri oil field started in 1958 with an average

daily output of 5000b/d of crude oil. More finds were made in the early 1960s with the

intensification of exploration activities as the Nigerian government embraced on open-door

policy towards the granting of oil concessionary rights, thus breaking the near-monopoly

position occupied by Shell-BP (Oremade, 1986; Khan, 1998; NNPC, 2004). Thus, there are

9

several foreign-based oil multinational corporations (OMNCs) operating presently in Nigeria

(Onwudiwe, 2003; Eromosele, 1997).

Today, Nigeria’s output of crude petroleum and natural gas comes mainly from states in the

South-South political zone. A large number of these states are in the Niger Delta, and include

Bayelsa, Delta, Rivers, Akwa-Ibom and Edo States. Other States in which oil and gas are found

include Imo, Abia, Cross-River and Ondo States. However, the states located in the Niger Delta

currently account for about 90% of the total output of crude petroleum and natural gas in Nigeria

(Ekuerhare and Orubu, 1996).

With the production of a cumulative quantum of crude petroleum amounting to 19.502 billion

barrels as at the end of 1998 and with the Nigerian oil and gas reserve which had grown

tremendously from a modest figure of 0.184 billion barrels of oil and 2.260 billion cubic feet of

gas in 1958 to over 30.93 billion barrels of oil, 3.80 billion of condensate, and over 158 trillion

cubic feet of gas as at mid 2002, Nigeria has thus attained the status of a major oil producer ,

ranking seventh in the world and has since grown to become the sixth largest OPEC oil

producing country in the world (Orubu, 2002; NNPC, 2004).

2.2 Oil Exploitation and Environmental Pollution

2.2.1 Meaning of Oil Exploitation of Pollution

The term exploitation means different thing to different people depending on the context in

which it is used. Thus, in the context of this study, exploitation is the development and use of

minerals, forest, oil etc for business or industry (Pearson Education Limited, 2007). In more

specific terms, Energy Information Administration (2001) refers to oil exploitation as all the

10

stages involved in the extraction or production, transportation, and refining of heavy or light

crude oil.

According to Webster’s Third New International Dictionary, the word pollution comes from the

Latin word pulluere which means to soil, to dirty, to defile. So anything that contaminates the

environment (land/soil, air or bodies of water), or destroys the natural beauty to scenery or

constitutes hazard to life and/or property or causes obstruction, is a pollutant. That phenomenon

is called pollution (Ossai et al, 1999). To a very large extent, pollutants originate from the

activities of man in his search for a more comfortable style of living through industrialization.

Thus, Lowe and Thompson (1992), refer to environmental pollution as the deliberate or

accidental contamination of the environment with wastes from human activities. This includes

the release of substances, which harm the quality of air, water and soil which destroys

biogeochemical cycles (taking generations to produce terminal disease in man). Applying a more

technical term, Claus and Habskun (1992), defined environmental pollution as an undesirable

change in the physical, chemical or biological characteristics of the air, land and water that may

or will harmfully affect human life or that of other species, industrial processes, living conditions

and cultural aspects or that may or will waste or deteriorate the raw materials’ source.

On the environment, petroleum and its products have adverse impact and have led to various

forms of pollution. The petroleum industry, in short, is being defined as an industry engaged in

oil and gas exploration and production; refining, processes, transportation of petroleum products

and marketing operation. Thus, by its very nature, the oil industry is a potentially massive

polluter. As Aina, (1996), puts it-“upstream and downstream activities from exploration,

production through transportation, marketing and utilization of petroleum products whether oil or

11

gas, leave in its trail, diverse environmental problems which are of varying degrees depending on

their form and causes”.

In Nigeria, in spite of considerable evidence of environmental damage and of human and social

dislocation from all industry activities, there are until recently little attempt to regulate the

operations of the oil companies. A laissez-faire regime allowed the oil companies to operate in

accordance with least-cost, profit-maximizing technologies, largely ignoring the need to preserve

the environment (Hutchful, 1984).

2.2.2 Sources and Types of Oil Industry Pollution

Hutchful, (1984) notes that oil industry pollution may arise from one or more of the following

sources:

1. Crude oil and wastes from exploration and production activities;

2. Effluents and by-products from refineries;

3. Transportation of petroleum products, and

4. Marketing and terminal operations.

The report further stresses that the primary by-products of exploration and production activities

are apart from crude oil, produced formation water and drilling muds and cuttings. Produced

water occurs in association with crude oil at considerable depth and pressures and contains oil,

grease, various salts and heavy metals while drilling mud contains a mixture of complex organic

and inorganic chemicals, water and clay.

Kupchella and Sanford, (1989) assert that the dumping of drilling muds and cuttings does not

seem to be a big problem when considered in isolation. But viewed in conjunction with oil

seepages, blowouts and spillage (including possible tanker accidents), the problem posed

12

becomes significant oceanic water pollution. Refinery effluents contain phenol, hydrogen

sulphide, ammonia, cyanide, toxic metals such as chromium, mercury, copper, zinc, cadmium,

lead and selenium (Nwankwo and Irechukwu, 1981; UNEP, 1987).

Production, refining and petrochemical activities also produce thermal pollution, either from the

high temperature present in discharges or from the flaring of gas. It should be noted that natural

gas production, which is an integral part of crude oil exploration is a major pollutant via its

flaring. The sulphur in crude oil is routinely removed by flaring and the gas produced as a

product is called associated gas. Nigeria currently flares 95% of all such gas (SPDC, 1997). It

has also been reported that during the period 1970-1979, the estimated average rate of gas flaring

stood at 97%. For the 1980-1989 and 1990-1998, the average flare rates stood at 79% and 78%

respectively (Orubu, 1999). Furthermore, according to JINN’s 2010 report, Nigeria volume of

gas flared was equivalent to one-sixth of total gas flaring in the world as at 2004. The report

further states that the volume of gas flared globally between 1996–2006 (during which time

awareness of the detrimental impact of flare emissions on the global climate grew) remained

relatively constant, ranging between 150-170 billion cubic meters. Nigeria’s share of the total

volume is approximately 24.1 billion cubic meters of gas. According to Mr. George Osahon, a

Director in DPR, oil production stands at 2.5 mbpd while gas flared stood at 1.4 billion cubic feet

per day, implying that an average of 4.9 million dollars worth of gas is being flared on daily

basis (Sebastine, 2013). Apart from the economic waste arising from gas flaring, it poses a

serious environmental hazard (Nwosu, 1998; Ogbuigwe, 1998).

According to Civil Liberties Organization (CLO), (2002), the World Bank estimates that gas

flaring in Nigeria releases 35 million tonnes of carbon dioxide into the atmosphere annually, or

0.2% of the global total and that Shell accounts for half of this in line with its share of oil

13

production. No wonder it has been estimated that Nigeria ranks as the highest country in the

flaring of gas in the world (Ojinnaka, 1999). The smoke from these flares spreads over the

surrounding and pollutes the air in the process.

Furthermore, petroleum has always entered and pollutes the biosphere as natural seepage, but at

rates more slower than the forced recovery of petroleum by drilling, currently estimated to be

about 2 billion metric tons per year (Atlas and Bartha, 1993). The production, transportation, and

ultimate disposal through marketing and terminal operations are introducing by conservative

estimates, millions of metric tons of oil into the environment (National Research Council, 1985).

2.3 Oil Spillage and Pollution

In developing countries like Nigeria, what readily strikes the mind of a common man when

discussing the impact of the petroleum industry are the deleterious ones. One of the undesirable

offshoots of the petroleum industry in the country that has devastated the environment is the

incidents of oil spills. The Federal Government as represented by its relevant agencies (the

Department of Petroleum Resources in particular) and the local people directly affected, feel

concerned about the deleterious impacts of these oil spills incidents on the environment and

consequently demand urgent remedial action. Oil spill per se can be said to connote the process

of oil accidentally coming out or seeping out from a pipe, or any other container hitherto

containing oil. Put more succinctly, oil spill is an accidental or intentional discharge of oil, which

may reach water bodies (FEPA, 1991) or any other part of the land. The review of the oil spill

incidents will be carried out under the following headings:

14

2.3.1 Causes of Oil Spillage

Awobajo (as cited in Augustine, 1991), when analyzing the incidents of oil spills in Nigeria:

1976-1980 reports that the occurrence of oil spills could be attributed to a number of causes

broadly grouped as follows:

Unknown, Blowout, Equipment failure, Operator/Maintenance Error, Engineering Error, Natural

Causes, Third Party, Sabotage, Sand Cut (Erosion) and Accident.

The reports, further reveals that the majority of oil spills during this period occurred a result of

equipment failure, which accounted for as much a 50% of each annual incident total. Admittedly,

“equipment failure” covers quite a lot of items, however, the items or systems, which seem to

fall under the Nigerian situation include:

Burst/Rupture of flow lines/pipelines, Corrosion of flow line/pipelines, Over pressure, Over flow

(tanks), Valve failure and Hose failure/Single Buoy moorings (SBM).

Another causative factor worthy of mention is sabotage, which according to the report,

maintained the second place among the causes of oil spills in this country

2.3.2 Frequency and Magnitude of Oil Spills

Within the period 1976-1980 this country experienced seven hundred and eighty- four (784) oil

spill incidents (Awobajo, as cited in Augustine, 1991). These oil spills resulted in the loss of

1,336,875 barrels (56,148,750 American Gallons) of oil to the national economy. The report

further states that in 1981 alone (January-May) 121 incidents of oil spills were reported, again

with another loss of 9,750 barrels to the national economy

According to Department of Petroleum Resources (1997), over 6000 spills had been recorded in

the over 40 years of oil exploitation in Nigeria, with an average of 150 spills per annum. In the

15

period 1976 - 1996, 4,647 incidents occurred resulting in the spillage of 2,369,470.04 barrels of

crude oil. With only 549,060.38 barrels recovered, 1,820,4 10.50 barrels of oil were lost to the

ecosystem (table 2.1).

Table 2.1: Oil Spills in Nigeria (1976-1996)

Year Numbers of

Spills

Quantity (Barrels) Spilled Quantity

Recovered

(Barrels)

Net Loss to the

Environment

(Barrels)

1976 128 26157.00 7135.00 19021.50

1977 104 32879.25 1703.01 31176.75

1978 154 489294.75 391445.00 97849.75

1979 157 64117.13 63481.20 630635.95

1980 241 600511.02 42416.83 558094.19

1981 238 42722.50 5470.20 37252.30

1982 257 42841.00 2171.40 40669.60

1983 173 48351.30 6355.90 41995.40

1984 151 40209.00 1644.80 38564.20

1985 187 11876.60 1719.30 10157.30

1986 155 12905.00 552.00 12358.00

1987 129 31866.00 6109.00 25358.00

1988 108 9172.00 1955.00 7207.00

1989 118 5956.00 2153.00 3830.00

1990 166 14150.35 2092.55 12051.80

1991 258 108367.01 2785.96 105912.05

1992 378 51187.90 1476.70 49711.20

1993 453 8105.32 2937.08 6632.11

1994 495 35123.71 2335.93 32787.78

1995 417 636677.17 3110.02 60568.15

1996 158 399036.67 11838.07 387198.60

Total 4647 2369470.04 54060.38 1820410.50

Source: Department of Petroleum Resources, (1997).

16

Furthermore, Ojo (2000), in his studies, revealed that in the Niger Delta alone, there have been

over 550 reported cases of crude oil spillage since 1976, releasing over 2.8 million barrels of

crude oil, while in Nigeria alone the oil company flares about two billion cubic metres of gas,

representing about 55 percent of gas flared in the world.

In another development, Mba and Mba, (2003), reports that over 500 separate incidents of oil

spillage resulting from serious blow outs and other incidents have been recorded in recent times.

For instance, in 1998, there was a major oil spillage from the Mobil pipeline linking its Idoho

platform with the Qua Iboe terminal. The worst affected areas were the Qua Iboe River in Akwa

Ibom State, the Andoni, Imo and Bonny Rivers in Rivers State; and the Brass, Bennington and

Akpoi rivers in Bayelsa State. The pollution equally spread as far as Forcados and Ramos in

Delta State and a thick sludge of crude oil came within five kilometers of Lagos Lagoon (ERA,

1998).

Furthermore, in the same 1998, there was an oil leakage at Jesse in Delta State in which three

hundred and seven (307) people were burnt to death (Ibe, 1998). Another report by Abugu,

(2000), put the number of death in the Jesse pipeline explosion/fire to be over 1,000 people.

Moreso, Oleh, a farming and fishing community of 160,000 in Isoko South Local Government

Area of Delta State was hit by oil spillage in 1991 when an underground pipe at the

Oleh/Olomoro oil field was punctured in the process of drilling, spilling a large quantity of crude

oil. Shell admitted that the spill was not due to sabotage but refused compensation for the

extensive damage caused to the environment. Oil continued to flow unabated for months before

Shell sent a team to clean it up (CLO, 2002). In July 1995, there was a gas explosion at

the same oil field as a result of a faulty pipe. The ensuing fire engulfed the adjoining bush,

17

burning down valuable trees, including palm trees, raffia palm, plantain, rubber and other

economic trees.

Furthermore, in January, 1999, there was a ‘minor’ leak at flow lines 4,26 and 31 along the Lion

Onome Lake, destroying all aquatic lives. In June of the same year, the mother of all spills

occurred when a pipe buried beneath the deep waters of the Lion Onome lake burst, spewing oil.

Shell frantically tried to contain it but to no avail. Far flung communities in the path of tidal

waves, including Olomoro and Emede, were badly affected. Food crops like cassava, yam and

cocoyam were devastated. Thousands of fish ponds, as well as natural and artificial lakes were

contaminated by crude oil. Fishing nets, baskets etc were ruined. (Patrick, 1999).

Adagbra (2004), while reporting the comments of the Delta State Commissioner for

environment, Chief George Ugboma, states that all major oil companies but Chevron were in the

habit of colluding to cover up spillages when they occur. The commissioner disclosed according

to the report that while Chevron reported a spill quantifying 218,204 gallons within a space of

six months, his ministry detected a cover-up of fire out-break at Well 15, Agbalagada, Oil spill

by Agip, Oviri-Olomu spill caused by Shell and Abura Oil spill caused by NPDC within the

same period.

All the above, have serious implication on agricultural activities notably crop farming and fish

production in Delta State. An analysis of oil spill incidents for the Period 1976-1996 is shown in

table 2.1.

2.4 Effects of Oil Exploitation

The cumulative effects of oil industry pollution pose a grave danger to the flora and fauna of the

Niger Delta, as well as to the people who have lived there for so many centuries (CLO, 2002).

18

This implies that oil exploration has serious implications for agricultural activities in terms of

land availability for farming, soil fertility, air pollution and fishing activities. In other words, the

way the land on which the people cultivate is being rendered unproductive and cropping areas

drastically diminished through the depletion of the top soil, and systematic deforestation,

pollution and the converting of farmlands into extraction areas.

2.4.1 Oil Exploitation and Land Availability for Agriculture

Land is the greatest asset of any state and basic to agricultural production. As reported by CRP

(1999), there has been a running competition for land between the oil industry and communities

in the Niger Delta, since oil production commenced in the area. The report revealed that there are

three basic ways in which oil operations impact on land and the environment. The first is through

exploration. This is the first stage in oil production, during which potential reserves are identified

through seismic surveys, usually carried out with the use of explosives on land, and with air guns

on water. If on land this process requires access to often large tracts of land. Seismic surveys,

where successful, are usually followed by drilling. SPDC (1996) revealed in their annual report

that a drilling location occupying between 5,000 and 20,000 square metres is required for an oil

well. Moreso, securing access to locations on mangrove swamps often require dredging shallow

and narrow creeks so that drilling rigs and barges could be moved in. This also has its effect on

surrounding land as it may now become more flooded than before, with more water being

introduced to the area by the dredging. Drilling also produces waste, which could be harmful on

the environment.

Drilling, where successful in striking commercially exploitable crude oil, is followed by field

development and production. This is when a network of pipelines is linked to transport the

extracted fluids to collection points called flow stations, where gas is first separated from oil and

19

the remaining combination of oil and water is transported to the terminals, where water is

separated from the crude and then the crude is exported. The physical space occupied in all the

stages outlined above may appear small compared to the entire Niger Delta, but impacts and

ripples pervade the entire area and beyond.

Another important angle of viewing the impact of oil exploration on land availability is vis-à-vis

the Land Use Act. The critical sections of the Land Use Act for the Niger Delta include sections

1, 28 and 29 (CRP, 1 999; CLO, 2002). Section 1 states that “all land comprised in the territory

of each state in the federation are hereby vested in the Governor of that state and such land shall

be held in trust and administered for the use and common benefits of all Nigerians in accordance

with the provision of this act. Section 28, which deals with the powers of the Governor to revoke

rights of occupancy for overriding public interest’, define such public interest to include (section

28(2) (c) and (3) (b): “requirement of the land for mining purposes or oil pipelines or for any

purpose connected therewith”. A full definition of “public purpose is provided in section 51(I) a-

i.

Section 29 says that where rights of occupancy are revoked for these reasons, “the occupier shall

be entitled to compensation under the appropriate provisions of the Minerals Act or the

Petroleum Act…” section 29 (2). However, section 29 (3) says: “if the holder or the occupier

entitled to compensation under this section is a community, the Governor may direct that any

compensation payable to it shall be paid:

a. to the community, or

b. to the chief or leader of the community to be disposed of by him for the benefit of the

community in accordance with the applicable customary law; or

20

c. into some fund specified by the Governor for the purpose of being utilized or applied for

the benefit of the community”.

It is noteworthy that before the promulgation of the Land Use Act, the oil companies operating in

Nigeria recognized the indigenous communities as the owners of the land. When they wanted to

engage on any activity on the land, they approached the concerned communities and negotiated

terms including payment of rent, the rate depending on whether the area required was swampy,

dry land or seasonally flooded areas. “But when the Land Use Decree came into being”, says J.

Fenine of the faculty of law at the Rivers State University Of Science and Technology in the oil

city of Port Harcourt, “the oil companies now said that the government owned the land.

Therefore, rent ceased to be paid. Then, if there is any pollution, it is only damage to the topsoil

or whatever that is there that will be paid for. No compensation was paid for the land itself’

(CRP, 1999). Thus, local communities have, in effect, lost the land itself, as they own neither

what is below it nor what is on the surface.

The consequences for farmlands acquired as locations could be considered as crucial for local

food production. Apart from oil locations, the oil companies excavate extensive areas of land

surface for road construction purposes. This becomes inevitable because most of their access

roads pass through intractable swampy environments. The outcomes of these activities are

‘burrow pits’, which invariably become water logged and they are widespread. All these have

reduced drastically, land availability for agriculture.

2.4.2 Oil Exploitation and Soil Pollution

Ukpong and Ojo-Ede, (1999) as cited in Ukpong and Akpabio, (2003) revealed that during

exploration for crude, dynamite is shot into the ground and the explosions may cause crude oil

21

deposit that lie close to the surface to gush out uncontrolled. This consequently pollutes the soil.

Another source of soil pollution is due to dumping of oil by companies using petroleum

products. The oil is carried by overland flow and seepage into the surrounding coastal plains.

This, according to them invariably lead to large Total Hydrocarbon (THC) values in the area.

Severe soil pollution could also arise due to over pressure and over flow of separators and

storage tanks, sabotage of oil installations e.g. theft or illegal bunkering during which pipes

carrying crude oil are perforated to tap the oil illegally. It is worthy to note that crop production

is related to the conditions of the soil. It supports plant life in that plants obtain nutrients and

mechanical support from the soil. It is one of the vast dynamic sites for biological interaction in

nature. Many biochemical reactions, which result in distribution of organic matter and nutrients

normally, occur in the soil.

Thus, where the soil is polluted by hydrocarbons, the following are likely to occur:

i. Soil micro-organisms would be destroyed.

ii. Decomposition of organic matter would be slowed down or terminated.

iii. Consequent to (ii), the soils would be deficient in nutrients e.g. nitrogen, calcium,

magnesium, potassium, sodium, etc.

iv. Soil reactions would become anaerobic instead of aerobic as soil pores are blocked by

hydrocarbons.

v. The heavy metals e.g. lead, could accumulate in levels that become toxic to organisms.

vi. The water table becomes polluted (Ukpong and Akpabio, 2003).

Corroborating some of the effects stated above, Amadi et al, (1993), posit that oil spills on

land/soil result in unbalance ratio of Carbon: Nitrogen which if greater than 17: 1 in soils results

in net loss of soil fertility. Benka-Coker and Ekundayo (1995) have also reported that available

22

phosphorus and total nitrogen in crude oil impacted soils were comparatively low while the total

organic carbon was high compared with reference site. Reports also showed that petroleum

inhibits microbial decomposition of organic matter in the soil by interfering with chemotasis

(Rosenberg et al, 1992). Petroleum at appropriate concentrations possesses a measurable toxicity

towards living organisms. It contains carcinogenic, mutagenic and growth inhabiting chemicals.

Gas flares, which are often times situated close to villages, produce “soot which is deposited on

building roofs of neighbouring villages. Whenever it rains, the soot is washed off and the black

ink-like water running from the roofs is believed to contain chemicals which adversely affect the

fertility of the soil”. Without fertile soil, indigenous groups lose their mode of survival and are

faced with the crisis of food shortages (TED case studies).

In addition, Hutchful (1985), reports that oil spill contamination of the top soil has rendered the

soil in the surrounding areas “unsuitable for plant growth by reducing the availability of nutrients

or by increasing toxic contents in the soil”.

2.4.3 Effect of Oil Exploitation on Water/Aquatic Lives

The danger posed by hydrocarbon pollution of water cannot be over-emphasized. Scientists have

revealed that one person dies every six seconds from drinking contaminated water (The

Guardian, 2002). The gaseous products, particulate matter and petrochemical smog released into

the atmosphere every second by gas flaring in the Niger Delta constitute a definite threat to

human and animal life in that region. As reported on the Editorial column of Safety Record, July,

2004, one of the implications of pipeline vandalization is the environmental and water pollution

of the area and their rivers which at times might threaten the collective existence of the host

communities.

23

Femi, (2004), while recounting the reports of the president of fisheries protection and

propagation coalition (Fishcareplus), a non-governmental organization, posits that when there is

oil spill, it covers the surface of the water. This reduces oxygen and ultimately destroys the chain

of basic nutrients that fishes live on in the water. According to him, “crude oil is such a crude

thing that it penetrates the body of the water, and remains at the bottom for years. It exhumes

dangerous substances and destroys the biodiversity of the water”.

Moreso, the use of dynamite and other explosives, by oil companies, during the process of

searching for oil destroys eggs of the fishes. The worst part of it is that the locals, fully aware

that dynamite kills fishes have also adopted the strategy to catch and eat fishes (Femi, 2004).

Further reports on the effect of oil exploration and production activities on aquatic lives showed

that an oil spill can directly damage the boats and gear used for catching or cultivating marine

species. Floating equipment and fixed traps extending above the sea surface are more likely to

become contaminated by floating oil.

Ukpong and Akpabio, (2003), while reporting on hydrocarbon pollution of water identified the

following as some of the effects:

i. Spawning grounds become polluted.

ii. Aquatic vegetation, many of which have economic values degenerate in productivity.

iii. Organisms (sea bottom/river bed and other crustaceans) including planktons degenerate

in the toxic environment.

iv. Fish, crustaceans and molluscs become carriers of toxic hydrocarbon substances along

the food chain.

v. Fishing as an economic activity is lost or threatened.

24

vi. Human health in these areas deteriorates proportional to the level of water pollution. The

high water tables in the polluted Delta region often carry films of hydrocarbon due to

sub-surface seepage and intrusion of contaminated water inland.

2.4.4 Oil Exploitation and Hydrocarbon Pollution of Air

Ukpong and Akpabio (2003), citing Udofia and Ukurekong, (1998), averred that atmospheric

pollution arising from gas flaring has deleterious effects on the soil and water resources as rain

passes through the atmosphere to the surface. Gas flaring, according to them, results in the

emission of acid generating gases into the air. Such gases include hydrogen sulphide, carbon (II)

oxide and sulphur (iv) oxide. The effects of gas flaring resulting from petroleum exploitation are

as follows:

i. Excessive leaching of nutrients (especially aluminum and manganese) from plant foliage

and soil thereby reducing the quality of soil and its productivity.

ii. Acidification of rivers, streams and ponds, leading to increased mortality of fishes in the

near coastal waters.

iii. The corrosion of structures such as bridges, buildings and their roofs and the

displacement of these over short periods of time.

iv. Subtle threat to health due to pollution of water supplies by acid and other aerosols from

the flared gases. These can result in cancer and birth defects (Ukpong and Akpabio,

2003).

In another development, Obioha, (1998), reports that the environmental problems associated with

gas flaring include the following major ones: flare radiations is generally high in gas flaring

areas of the oil producing areas or communities; rise in temperature in the gas flaring areas;

decrease in crop yields (such as maize, tubers and even flowering and fruiting of palm trees,

25

okro, etc). In addition, fishing in Oguta and Ohaji-Egbema Local Government Areas of Imo

State and Ogba-Egbema, Ndomi in Bayelsa state has been seriously affected as catches have

continued to decline significantly. Some species of crabs have equally virtually disappeared

(Okoye, 1999).

2.4.5 Oil Exploitation and Rural/Urban Migration

Hutchful, (1985) reports that because the oil industry acquires highly skilled workers, local

villagers are either forced to migrate to the urban centres after being economically displaced, or

to become low-skilled workers dependent on the oil company. These structural changes in the

economic life of the local communities have often “generated bitter conflict as the issue of

employment and participation in the oil industry” has divided different segments of the

communities, often along ethnic lines. He stresses further other structural effects of the oil

industry to include “rural depopulation, disintegration of the peasantry and urban

marginalization.

According to Owabukeruyale, (2000), the out-migration, of the rural displaced farmers in the

Niger Delta as a result of environmental degradation caused by oil extraction in the region has

led a significant percentage of the local inhabitants to remain in cyclical poverty and penury.

This has meant greater environmental degradation as a result of the intensive exploitation of the

few remaining fertile land in the region by the residents. It has also led to increasing urban blight

in the urban areas in the Niger Delta as more and more displaced rural inhabitants flood the

urban areas in search of non-existent jobs.

26

2.5 Oil Companies and Corporate Social Responsibility

There are many definitions as there are many writers on the subject. For instance, Osaze (1991)

says corporate social responsibility is the contribution of the organization to the development of

its environment. McWilliams and Siegel (2001) define it as “actions that appear to further some

social good, beyond the interest of the firm and that which is required by law. It is the corporate

act of giving back to the immediate and wider community in which organizations carry out their

business in a manner that is meaningful and valuable and relevant to the community”. The

European Union Green paper on corporate social responsibility in 2002 as cited in Donwa and

Odia (2010) defines it as “a concept whereby companies integrate social and environmental

concerns in their business operations and in the interactions with their stakeholders on a

voluntary basis”. Carrol and Buchholtz (2003) define CSR “as the economic, legal, ethical and

discretionary expectations that society has of organization at a given point in time”. This

definition makes explicit the multifaceted nature of social responsibility. According to the World

Business Council for Sustainable Development also cited in Donwa and Odia (2010), “CSR is

the ethical behaviour of a company towards society and its management acting responsibly in its

relationship with other stakeholders who have a legitimate interest in the business. It is the

continuing commitment by business to behave ethically and contribute to economic development

while improving the quality of life of the workforce and their families as well as of the local

community and society at large”. Teryima (2005) sees CSR of management as the ethical and

moral responsibility of management to the focal society. Donwa and Odia (2010), on their part,

define corporate social responsibility as the moral and ethical assistance to society in

reciprocation of the benefits derived there from by the organization.

27

In the light of the above definitions, Lale (2004), has posited that the companies and their host

communities are in a partnership in which each partner has implied responsibilities for the

attainment of the only goal to generate enough revenue for the development of the country. To

this end, the Federal Government had set up some special agencies for the development of the oil

producing areas and the country at large. For instance, the Oil Mineral Producing Areas

Development Commission (OMPADEC) was established in 1992 under the military regime of

Ibrahim Babangida for the special development of the oil-producing states-Delta, Edo, Akwa-

Ibom, Imo, Abia, Cross River, Ondo and the Old Rivers States. Horsefall, (1999), reports that

OMPADEC carried out a number of development projects according to its mandate, although

many people in the oil producing states strongly believe that OMPADEC as an interventionist

paradigm failed due to lack of sustained interest shown by the Federal Government in its funding

and political interference (Orubu, 2000). In 1995, General Sani Abacha established the

Petroleum (Special) Trust Fund (PTF) which operated also as a development agency, but its

development programmes were concentrated in non-oil producing states.

Moreso is the Niger Delta Development Commission (NDDC) whose advent initially raised the

hope of the indigenes of oil producing areas. Unlike other boards and commissions erected by

previous regimes, the NDDC, under the regime of President Olusegun Obasanjo was no doubt,

more focused and more business-oriented. The board’s mission as stated by its chieftain is “to

facilitate the rapid, even and sustainable development of the Niger Delta into a region that is

economically prosperous and regenerative, socially stable and politically peaceful” (Ogunfuji

and Ejekwu, 2004). Thus, the report revealed that since the inception of the commission, it had

striven very hard to actualize the vision for setting it up through the award of several contracts

such as road construction, water projects, electricity projects, shore protection and jetties

28

including health centres. Despite the appreciable level of achievement recorded by the NDDC in

bringing the much desired succour to tenures of even and unprecedented developments to the

people, the sheer criminality that pervaded the region put to question the real aspiration of the

Niger Delta people (Ogunfuji and Ejekwu, 2004).

Moreso, the individual oil-producing states has equally set up different boards, commissions and

programmes to help develop the oil–producing communities. For instance, the Delta State

Government, under the present regime has set up the Delta State Oil Producing Areas

Development Commission (DESOPADEC) to help alleviate the sufferings of the inhabitants of

the oil-producing communities within the state. The commission, since its inception, has

embarked on series of development projects such as road construction and maintenance,

donation of transformers to various communities, skills acquisition training programmes, school

buildings’ renovation, free mobile medical care programme, scholarship/bursary awards to

deserving students amongst others. Despite all these projects, the plight of the farmers remains

unallayed as the soil and water polluted by oil exploitation activities remain unattended to.

Donwa and Odia (2010) had posited that entrepreneurs must, in performing their primary

functions, also be corporate citizens or good neighbours within host communities in giving

attention to the triple bottom line-the totality of the enterprise’s profit, people and place or planet

(3Ps). Thus, on their own part, the oil companies through their individual corporate social

responsibility programmes have also helped to develop their host communities through various

projects like hospital, road, educational support, youth development and agricultural extension.

Lale (2004), in his report, states that the oil companies are responsible to the host communities in

the following ways:

29

- Community development through the provision of social amenities (e.g. health,

educational, religious and recreational facilities, etc) and infrastructures (e.g. rural

electrification, roads, etc) to ameliorate the negative impact of the activities of these

companies on host communities.

- Economic empowerment of the indigenes of the host communities through favourable

employment policies and contract awards and

- Capacity building through human resources development by establishing scholarship

schemes for training in educational institutions.

Thus, in 1999, for example, SPDC, one of the major oil companies in Nigeria was quoted to have

spent $52million on community development in Nigeria (Orubu, 2002). It also granted 860

university scholarship and 2,600 secondary school scholarships in 1999 (Guardian, Monday

June, 12, 2000). The Niger Delta Environmental Survey (NDES), which commenced work in

1995 was sponsored by SPDC.

Other major oil companies such as Chevron, ELF and TOPCON also have community

development programmes in their areas of operations and like SPDC, they also help to develop

the country’s human resources through various scholarship progammes. They have also

introduced skill acquisition programmes for unemployed youths in their various host

communities, who they also assisted financially to set up their own small businesses. It is worthy

to note also that youths and economic empowerment schemes of government and its Joint

Venture Partners, Shell, Exxon Mobil, Nigeria Agip, Chevron, Texaco and Total among others

promote capacity building especially in the area of small and medium scale entrepreneurs and

stimulate agricultural development but certainly not peace needed for the economic vibrancy of

30

the region as these gestures cannot actually make up for the damage done to the environment

through oil exploration and production activities (Ogunfuyi and Ejekwu, 2004).

2.6 Farming System in Cassava Production

Root and tuber crops determine to a great extent the nutritional, economic and food security

status of the majority of Nigerians (NARP, 1994). Amongst the root and tuber crops, cassava and

yam rank first and second respectively with regard to total output and area cropped (CBN, 1995).

Thus, appropriate farming system has to be adopted to boost their production.

Farming system is the result of interaction among several interdependent components, namely,

crops, livestock and off-farm enterprises (Gilbert, et al, 1980). The choice of a farming system or

agricultural practice by the people of any given community or region, may be influenced by

factors like topography, climatic conditions, socioeconomic activities, traditional land tenure

system, superstition and the religious customs of the specific region (Ekong, 1988). The cropping

system, commonly practiced in the West African sub-region is mixed cropping (Richards, 1985).

Although, many of the traditional African farming systems have been found to be prudent and

sound, mixed cropping has shown to have many advantages over others (Chambers, 1983). The

advantages include:

i. less risk;

ii. exploitation of different soil profiles for moisture and nutrients by different rooting

systems;

iii. one crop may provide favourable micro-climate for another; and

iv. crops which are scattered among others are less vulnerable to pest attack than single

stands.

31

According to Nweke (1981), mixed cropping is commonly practiced because of scarcity of

productive resources and as insurance against crop failure and loss of capital and labour input.

Moreso, Erhabor (1982) maintains that mixed cropping is profitable, rational and will continue to

be adopted by farmers.

2.7 Farm Resource Use

The major farm resources used in cassava are land, labour and capital. Among these resources,

land and labour dominate the production process (Olayemi, 1976).

Land which include the soil on which crops grow and water is a fixed resource, but it may be

increased in terms of size so as to increase total output, more especially in extensive farming

system practiced in most developing nations. Despite the increase in land, productivity may still

be low if the other farm inputs are not efficiently used.

Anil, (1981), states that sometimes there are greater yield in small farms than in large ones. This

may be as a result of a more efficient use of resources in the small farms than in the large ones.

Thus, increase in the size of land does not necessarily implies increase in returns. Labour can be

classified into family labour, hired labour and communal (i.e. group) labour. It is a second most

important resource in farm production and can constitute a serious limiting input in the

production process (Olayide and Heady, 1982).

Obiechina and Otti, (1985) found that of the total labour input, 75% is provided from family

source while 25% is hired.

Onwucheka (1988) reported that in Abakaliki area of Anambra State (now in Ebonyi State), the

relative proportions of labour input supplied by each labour class with respect to gender and age

32

varied with the crop concerned and the availability of labour. Okorji (1983) found out that, 40%

of total labour supply was hired labour and were used for the tedious operations like land

preparations and weeding. Okorji (1985) also found that differential wage rates exist for male

and female labours, which do not reflect the amount of work done but rather the nature of work.

According to him, men were paid higher wages than women as a result. Although women,

sometimes are more efficient than men in some operations such as weeding and harvesting.

The third category is communal labour which is useful for breaking seasonal labour bottle necks

in small holder farming (Koch, 1985). In order to make comparisons between the different types

of labour, the hours worked are expressed in terms of common denominator like man-hours or

man-days. Capital inputs can be divided into fixed and variable items. The fixed capital items

include farm structures and buildings, tractors, hoes, basins, motorized boat among others while

the variable items include planting materials, fertilizer, fingerlings, and chemicals. Capital can be

in the form of cash. Johnson (1982) stated that the amount of cash available at the beginning of

the cropping season is one indication of the farmer’s access to farm inputs as it normally can be

used to purchase or rent land or hire labour influences his scale of production.

2.8 Valuation of the Environment: Empirical Measures

One of the central themes in the environmental impact of a project is the need to place proper

values on the services provided by the project and environment (Eboh, 1999). Several measures

are available for valuing environmental goods Turner et al, (1994) categorized these measures

into two: those, which value a commodity via the demand curve (demand curve approaches) and

those, which do not (non-market demand approach).

33

2.8.1 Non-Market Demand Approaches

Measures used here include:

Opportunity Cost Approach: This values the benefits of environmental protection in terms of

what is being forgone to achieve it.

Dose-response Approach: This shows the effect that a change in pollutant has on environmental

quality. The technique values environmental degradation, such as air pollution from the

relationship between a specified amount of pollution, and observed damage it causes (e.g. the

effects that crude oil spill will have on growth of various crops).

Preventive Expenditure Approach: This approach infers the value of the environment from

what people are prepared to spend to prevent its degradation.

The Replacement Cost Approach: This value an environmental good by the cost incurred in

restoring the environment to its original state after it has been damaged (Garrod and Willis,

1999).

2.8.2 Market Demand Approaches

According to Garrod and Willis (1999), the demand curve approaches or measures are broadly

divided into the revealed preference methods and the expressed or stated preference methods.

The revealed preference methods include:

The Travel-Cost Method (TCM): This method is used to estimate the demand or marginal

valuation curve for recreation sites.

34

Hedonic Price Method (HPM): This method relies on the proposition that individual’s utility

for a good or service is based on the attributes which it possesses. Thus, the approach according

to Rosen (1974) has been used to study how:

i. variation in housing attributes, e.g. size of the house, number of rooms, distance to

central business district, can be capitalized into housing prices.

ii. to impute a price for an environmental good by examining the effect which its presence

has on a relevant market-priced good.

The expressed or stated preference techniques are choice modeling technique and contingent

valuation method.

Choice Modeling (CM) Technique: This technique has been used in Australia to assess social

goals, such as values for protecting regional jobs (Blamey et al, 2000) and to preserve country

communities. The technique employs the use of survey methods to present respondents with

hypothetical scenarios where they are asked to ‘state’ their preferred trade off.

Contingent Valuation Method (CVM): This is an economic tool used for estimating the value

that a person places on environmental goods and services. The approach asks people to directly

report their willingness to pay (WTP) to obtain a specified good, or willingness to accept (WTA)

to give up a good, rather than inferring them from observed behaviours in regular market place.

Because it creates a hypothetical market place in which no actual transactions are made,

contingent valuation has been successfully used for commodities that are not exchanged in

regular markets, or when it is difficult to observe market transactions under the desired

condition.

35

There are several assumptions one must make in order for contingent valuation to be valid. The

first is that the resource to be valued can be described in a scenario that is meaningful to the

respondent, and that the respondent understands the resource as the researcher intends it to be

understood (World Bank Institute, 2002). The second assumption is that there is a payment

vehicle: for willingness to pay, the vehicle might be a new user fee. For willingness to accept, it

might be a tax refund. The third assumption is that the questioner has a method for measuring the

respondent’s value of the proposed change. There are three common methods for this, which are:

the open-ended questioning, iterative bidding and the dichotomous choice, or referendum, which

is the most accepted method. Often a follow-up question or a combination of these methods is

used to narrow the willingness to pay (or accept) price range (Carson et al, 1995).

To measure the mean and median of the WTP for detailed interpretation, parametric and non-

parametric approaches can be used.

2.9 Productivity Implications of Environmental Pollution

Environmental pollution of all sorts, especially those resulting from crude oil exploitation

portend ominous consequences for agricultural productivity. There is diversion, for instance, of

available agricultural farmlands and labour to the oil industries, and the depletion of the

remaining portions by gas flaring, oil spillage, extensive land scarification and surface water

pollution. These conditions can neither guarantee increased agricultural output nor better the

living conditions of the land dependent farm families.

The above corroborated the report of Igbozuruike et al, (1989) that land pollution as a form of

land degradation affects in varying degree the ground surface, the soil and sub-soil and stems

from a myriad of sources, chiefly among the varieties is oil contamination of land in petroleum

36

producing region, notably Rivers, Edo, Delta, Imo and Akwa Ibom states. Calamari, (1985) has

also averred that the residual effects of spillage on farm lands is so hazardous that it is capable of

altering the entire physical, chemical and biological characteristics of terrestrial environment and

render it completely useless for agricultural purposes for several years.

Ukaegbu and Okeke, (1987) and NEST (1991) in their report on a research conducted by

Ashland (now taken over by Addax Petroleum Development Nigeria Ltd (AODNL) on the

impact of gas flare from an Izombe flow station in Imo state showed that about 100 per cent loss

in yield was recorded for all crops about 200metres away; 45 per cent loss for those about 600

metres away; and about 10 per cent loss in yield for crops cultivated about 1000 metres away

from the flare site.

Gbadegesin (1997), further noted that “apart from loss of farms, oil spills have led to extensive

deforestation with no adequate replanting practices... This in effect has shortened fallow periods,

compounded land use degradation and led to a loss of soil fertility and consequently erosion of

the top soil”. Furthermore, Kerema, (1996) highlighted the following as some of the implications

of crude oil exploitation:

• Land and water pollution from oil spillage damage the resources upon which the peasant

farmers depend and earn their living without adequate compensation for an alternative;

• Oil companies encroach too far in the available land resources from which oil producing

area farm families draw their means of livelihood without corresponding steps to

encourage the agricultural productivity of the impoverished communities.

37

• Monetary proceeds from the oil have not been adequately ploughed back into the

agricultural sector to stimulate rural agriculture within the framework of the limited

arable land.

Okpara, (2004) summarized the long term implications of the various forms of environmental

pollution from oil industries to include loss of jobs in agriculture and fishing, farm abandonment,

increased incidence of rural-urban migration, food insecurity exacerbation of poverty.

2.10 Conflicts and Resource Use

Resource use is a concept used to designate the allocation of farm resources such as labour, land,

capital and management or entrepreneurship in their various forms between competing

alternatives (Olayide and Heady, 1982). Agricultural business involves the use of resource inputs

in the production of output. A healthy and peaceful environment will be needed if meaningful

agricultural activities are to thrive. Meanwhile, a critical look at the oil producing communities

will reveal elements of community disturbances, which have become a common feature of the

Niger Delta.

Series of bitter and bloody conflicts have arisen due to oil exploration and exploitation over the

last four decades. These conflicts take various forms-between oil companies and host

communities; between communities or ethnic groups; and within communities. This could be

seen within the concept of what Phillips, (1997) wrote in respect of his analysis of the Honduran

development of shrimp farm industry for export. He stated thus: “The preservation and

advancement of basic human rights, the equitable use of land and resources, and the preservation

and sustainable use of the countries natural environment are three inextricably connected aspects

of a single historical process”.

38

The conflict that has emerged in the Niger Delta as a result of oil extraction has its roots in the

violation of the rights of local community people as a result of the promulgation of obnoxious

legislations. The Niger Delta Environmental Survey (NDES) study, identified causes of oil

community disaffection to include:

• The fact that contracts are often awarded to opinion leaders and local chiefs in the

communities , who abandon project sites after collecting contract fees,

• That some opinion leaders and local chiefs connive with contractors to certify job

completion in order to share part of the money to the detriment of the community,

• That oil companies often initiate and execute poorly-defined projects that may be quickly

abandoned or vandalized,

• That often, community assisted projects do not get to the target communities and are not

initiated in consultation with the people,

• And dubious and corrupt chiefs and opinion leaders often collude to cheat both the

communities and the oil companies (CRP, 1999).

In another vein, Pegg, (1999) reports that the deprived peasants currently make demand for

social services from oil companies than they can make from the often- inaccessible Nigerian

state. This often led to conflict as the oil companies are engaged in the process of collaborating

with the Nigerian regime to use violence as a means of pacifying the protesting communities.

These social conflicts in the Niger Delta Region have resulted in social instability, loss of

working hours by farmers, loss of lives and properties, loss of cultural heritage and poor living

conditions. This scenario does not guarantee efficient resource use, improved and sustainable

agricultural production.

39

2.11 Theoretical Framework

The issue of environmental pollution and its attendant effects/impact has remained a topical one

in the field of Environmental Economics. Consequently, several frameworks or models have

emerged over the years to study the impact of environmental pollution.

Apart from the methods of conducting environmental impact analysis of projects highlighted in

2.8, there is the integrated environmental impact model for Oil and Chemical Spills.

2.11.1 Integrated Environmental Impact Model for Oil and Chemical Spills

Emphasizing on this model, French and Reed (1996) opined that there is an increasing need for

quantitative and objective assessment of environmental impact (injury) and natural resource

damage resulting from the release of toxic substances. Accidental spills, chronic releases, and

continued contamination from historical dumping all need to be assessed for effective planning

and decision making in order to minimize environmental impact and natural damage.

Thus, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980

(CERCLA) was put in place which according to French and Reed (1996) provides two types of

damage-assessment methodologies:

(1) Type A, standard simplified procedures requiring minimal field observations;

(2) Type B, more complex and detailed studies for conducting assessments in situations that

warrant further attention. In this study, the biological effects component of Type A

Assessment Models will be a reference point.

The biological effects model uses habitat - specific and seasonally varying estimates of the

abundance of fish, shell fish, birds, mammals and the productivity of plant and animal

40

communities at the base of the food chain in the environment of the spill to determine biological

injury.

2.11.2 Concept of Agricultural Resource Productivity

Any productive activity requires the use of inputs or resources and cassava production is no

exception. Olayide and Heady (1982) described productivity of agricultural resources as the

index of the ratio of the value of total farm output to the value of the total inputs used in farm

production. They accepted the fact that resource productivity is definable in terms of individual

input or resource, or in terms of a combination of them, hence, land, capital, labour and

management productivity can each be defined as the ratio of total output to inputs of land,

labour, capital and management respectively.

Meanwhile, Patinkin (1965), in his general equilibrium model, assumed that production of all

goods and services is characterized by constant returns to scale. The production process

according to him follows the following production function:

Q = f (Ls, E), ----------------------- (1)

where

Q = Consumption good produced which in the context of this study is cassava

Ls = Labour supply or input

E = Vector of emissions of pollutants to the environment.

He noted that emission of pollutants is regarded as a factor of production. This approach will be

adopted in this study to determine the effects of oil exploitation on cassava yield, land

productivity, and cassava farm income.

41

2.12 Analytical Framework

2.12.1 Multiple Regression Analysis

This is an econometric method of analysis used to study the relationship involving more than two

variables. It is an analytical technique, which features prominently in social science studies

because most events involve cases of multiple causation and interconnections (Ezeh, 2003). Most

works involving multiple regressions used the Ordinary Least Square (OLS) method because of

its desirable properties which include: unbiasedness, least-variance, efficiency, best, linear,

unbiaseness (BLU) among others and suitability and suitability (Walters, 1969; Koutsoyiannis,

1977).

The multiple regression model is usually stated as follows: -

Y = f (X1, X2, X3, X4, ..., Xn) + e --------------------------- (2)

where Y is functionally related to X’s. The ‘e’ or ‘u’, which is the error term, is usually

introduced to capture the effects of omitted variables, errors of measurement, error of

aggregation and the erratic nature of human beings (Koutsoyiannis, 1977).

2.12.2 Gross Margin/Profit Function Analyses

The gross margin analysis involves evaluating the efficiency of an individual enterprise (or farm

plan) so that comparison can be made between enterprises or different farm plans (Olukosi and

Erhabor, 1988).

Gross margin (GM), by definition is the difference between the gross farm income (GI) and the

total variable cost (TVC). That is,

GM=GI - TVC

42

The gross farm income, also called total value of production, is the total physical product

multiplied by the unit price of the product. Thus, gross margin could also be stated as: GM =

TVP - TVC.

The total profit (π) according to Nweze (2002), is the difference between total revenue (TR) and

the total costs (TC).

Total Profits (π) = Total Revenue (TR) - Total Costs (TC).

Using symbols, π = TR - TC

But TR = PY Y and TC = PX X + F where PX X is total variable cost while F is the fixed cost.

The fixed cost component of total costs (TC) may not be included in the analysis since the

analysis of this study will be based on the short run effects of input costs. Thus,

π = TR-TVC

= PYY - PxX

The gross margin and profit function analyses will be used in this study to determine the costs

and returns, and hence profitability of cassava farming as influenced by oil exploitation.

2.12.3 The Student’s ‘t’ Test

The student’s ‘t’ test according to Asika (1991) is a test of the difference between two population

means for small samples. Justifying the use of this technique, Koutsoyiannis (1977) stated that

the t - distribution is always symmetric with mean equal to zero and variance (n - 1)/(n - 3)

which approaches unity when n is large.

The analytical student’s ‘t’ technique is explicitly stated by Akuezuilo (1993) as:

43

t =X 1−X2

SD1

√n1+

SD2

√n2

at n1 + n2 – 2 degrees of freedom

where

X1 = Mean values of 1st population

X2 = Mean values of 2nd population

SD1= Standard deviation of 1st population

SD2 = Standard deviation of 2nd population

n1 = Number of observations (sample size) of 1st population

n2 = Number of observations (sample size) of 2nd population

The student’s ‘t’ technique will be used in this study to test for significant effects of crude oil

exploitation on cassava yield, land productivity and farm income before and after oil spill

incidents in Delta State.

44

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Study Area

The area of study is Delta State. Delta State is one of the states created on the 27 th of August,

1991 by the Babangida administration out of the old Bendel State, with its capital at Asaba.

Geographically, the state is bordered towards the South by the Atlantic Ocean, West by Edo

State, North by Kogi and Anambra and to the East by Rivers and Bayelsa States.

Delta State has an estimated land area of 17,698 km2 (Nigeria Hand book and Review, 2002) and

an approximate population of 4.1million (NPC, 2006). The topography of the area is low-lying

with a coastline of about 160kilometers on the River Niger with rivulets and streams, criss-

crossed with creeks through which the River Niger empties into the Atlantic Ocean, thus forming

the larger part of the Niger Delta Area. Delta State falls within the equatorial region of Nigeria.

Thus, it has two distinct seasons: the dry and rainy seasons. The dry season occur between

November and April, while the rainy season begins in April and last till October, with the month

of July witnessing the heaviest rainfall. The average annual rainfall in the coastal areas is about

2665mm and 1905mm in the northern fringe of the state. The humidity is high; the relative

humidity is on average of about 80%. The temperature is uniformly high throughout the year at

about 270C and the annual range is very small just about 20C or 30C (Emielu, 2004).

The State has abundant mineral and human resources in addition to tremendous agricultural base.

Delta State is the leading producer of crude oil and natural gas in Nigeria (Nigeria Handbook and

Review, 2002).

45

Currently, the state has 25 local government areas with diverse ethnic and tribal groupings,

which include the Delta Ibos, Urhobos, Izons, Isokos and Itsekiris. Delta State is divided into

three (3) senatorial districts. The senatorial districts and their component local government areas

are as follows:

1. Delta North: comprises Aniocha North, Aniocha South, Ika North East, Ika South,

Ndokwa West, Ndokwa East, Oshimili North, Oshimili South and Ukwuani.

2. Delta South: comprises Bomadi, Burutu, Isoko North, Isoko South, Patani, Warri North,

Warri South and Warri South West.

3. Delta Central: consisting of Ethiope East, Ethiope West, Okpe, Sapele, Udu, Ughelli

North, Ughelli South and Uvwie.

3.2 Sampling Procedure

The sampling procedure used in this study is the stratified random sampling technique. The study

area (Delta State) was stratified into three (3) agro-ecological zones – Delta North, Delta South

and Delta Central agro-ecological zones. From each of the three agro-ecological zones which

represent the strata, two (2) local government areas where there are intensive crude oil

production activities were drawn using the simple random sampling technique. This gave a total

of six (6) local government areas that were involved in the survey. From each of the 6 local

government areas, two (2) communities known to have suffered high degree of oil spillages

between 2001 and 2005 were selected giving a total of twelve (12) communities. With the

assistance of some of the community members, a list of all the farmers involved in cassava

production was compiled from the 12 communities to get the sampling frame. From the sampling

frame, a sample of seventeen (17) cassava farmers was randomly drawn using the simple random

sampling technique from each community.

46

Thus, a total of 204 cassava farmers (respondents) was used for the study. The communities that

were drawn and the sample size is presented in table 3.1.

Table 3.1: Communities surveyed and the number of respondents sampled

Agro-Ecological Zones

Local Govt. Areas Communities Surveyed

No. of Respondents

Delta North Ndokwa East i. Ashaka

ii. Abor

17

17

Ndokwa West i. Ogume

ii. Okpai

17

17

Delta South Isoko South i. Uzere

ii. Olomoro

17

17

Isoko North i. Otor – Iyede

ii. Owhe-Ologbo

17

17

Delta Central Ughelli South i. Otu-ghievwen

ii. Iwhrekan

17

17

Ethiope East i. Kokori

ii. Orhoakpor

17

17

Total 6 12 204

Source: Survey Data, 2008.

3.3 Data Collection

Data for this study were collected from both primary and secondary sources. Primary data were

obtained by the use of well structured questionnaires which were administered to the 204 small

scale cassava farmers drawn from the 3 agroecological zones of the study area. This was done by

the researcher and the assistance of some trained officers.

Data collected include: socio-economic characteristics such as age, educational background, sex,

size of household, household income, marital status, farm size, labour supply, output and

prevailing market price per kilogramme of cassava products (garri). Other information gathered

using the questionnaire include the type(s) of farming practices adopted by the farmers, trend in

47

their production activities before and after oil spills incidence, types of resources they employed

in production and their general level of awareness or perception of the effects of oil pollution on

their means of livelihood. The data set covered the years 2001-2005 based on the assumption that

the farmers will be able to recollect their input and output levels before and after possible oil

spillages during this time frame. Moreso, qualitative data were equally generated for the study.

This was done using the Participatory Research Approach (PRA) wherein the research and the

trained officers were in close contact with the farmers and to a large extent, using the local

language to elicit responses on corporate social responsibility of the oil companies to their host

communities and to what extent this has affected their farming activities.

The information obtained from the field were augmented with publications from journals,

textbooks, Federal Office of statistics and other published and unpublished materials. These

constituted the secondary sources of information for the study.

3.4 Data Analyses

Due to non-response and inadequate information, some of the questionnaires were discarded and

data from only 150 respondents were used for analysis. The attrition rate is further attributed to

outright misplacement of questionnaires by some respondents and field workers. The data

obtained from the field were analyzed using descriptive and inferential statistics such as

percentages, means, frequency distribution tables and regression. Objectives (i) and (v) were

achieved using descriptive statistics. Objectives (ii) and (iii) were realized using regression

analyses while objective (iv) was achieved using the Gross Margin analytical techniques.

48

3.4.1 Model Specification and Estimation

The analytical tool used here is the Ordinary Least Square (OLS) multiple regression analytical

technique. In this regard, the postulated regression models to measure the effect of oil spillage on

land productivity is specified as:

(i) LTZ = f (X1, X2, X3, X4, X5) ε…… (1)

where

LTZ = Land productivity measured as the ratio of cassava yield to farm size (Kg/ha)

X1 = Labour input (man days)

X2 = Quantity of planting materials used measured in terms of number of bundles of

cassava stems.

X3 = Cassava farming experience (years)

X4 = Age of cassava farmers (years)

X5 = Oil spill dummy (oil spillage = 1; no spillage during cropping season = 0).

ε = error term

The oil spill dummy is included as an index to capture the effect of crude oil exploitation on

cassava production. However, in order to estimate the relevant parameters, different functional

forms including the linear, semi-log and double-log functions of the general model were

specified and fitted.

Linear Function

The linear form of the model is given as:

LTZ = bo + b1 X1 + b2 X2 + b3 X3 + b4 X4 + b5 X5 + ε … (2)

All the variables are as defined earlier in equation (1)

49

To measure the effect of crude oil exploitation on farm income, the model is specified as:

(ii) CFNC = f (Y1, Y2, Y3) ε…… (3)

where

CFNC = Cassava farm income (N)

Y1 = Quantity of garri produced per hectare (kg)

Y2 = Average market price per kg of garri (N)

Y3 = Oil spill dummy

ε = error term

The following functional forms of the general model were specified and fitted.

Linear Function

CFNC = α 0 + α 1 Y1 +α 2 Y2 +α 3 Y3 + ε…. (4)

The postulated regression model to achieve objective (iii) is specified as follows:

CYD = f (Z1, Z2, Z3, Z4, Z5, Z6, Z7) ε…… (5)

where

CYD = Yield of cassava (kg)

Z1 = Cassava farm size (ha)

Z2 = Labour input (man days)

Z3 = Quantity of planting materials used measured in terms of number of bundles

of cassava stems.

Z4 = Cassava farming experience (years)

Z5 = Age of cassava farmers (years)

50

Z6 = Cassava farmers’ educational level (years of formal education)

Z7 = Oil spill dummy (oil spillage = 1; no spillage during cropping season = 0).

ε = error term

To estimate the relevant parameters, the linear and semi-logarithmic functions of the general

model were specified and fitted as follows:

Linear Function

CYD = bo + b1Z1 + b2Z2 + b3Z3 + b4Z4 + b5Z5 + b6Z6 + b7 Z7 + ε …… (6)

All the variables are as defined earlier in equation (5).

3.4.2 Gross Margin Analysis

This was used to achieve objective (iv). The average prevailing market prices of cassava

products (garri) was used to derive the relevant monetary values of output and the average

prevailing prices of inputs was used to derive the relevant monetary values of inputs. The costs

and returns in cassava production and hence profitability is presented as follows:

Costs and returns in cassava production:

GM = TR – TVC where

GM = Gross Margin (N)

TR = Total Revenue (N)

= Py.Y

TVC = Total Variable Costs (N)

NFI = GM – TFC where

NFI = Net Farm Income (N)

TFC = Total Fixed Costs (N)

51

TC = TVC + TFC. Where

TC = Total Costs (N)

3.4.3 Hypotheses Testing

The hypotheses for the study (i.e. hypotheses i, ii, and iii) were all tested using the F-statistic

obtained from the ANOVA table of the corresponding lead equations of the various regression

models.

Further tests of significance in cassava yield, land productivity and cassava farm income before

and after oil spill incidence was carried out using the Paired t-test statistic.

This is given by the following formula:

t =

dSD√n where

d = Mean of difference between variables (e.g. cassava yield) before and after oil spill

incidence.

SD = Standard deviation of difference between variables

n = Number of respondents (cassava farmers)

52

CHAPTER FOURRESULTS AND DISCUSSION

The results of the analysis of data collected from the field survey are presented and discussed in

this chapter. Both descriptive and econometric analyses were employed.

4.1 Farming Systems of Cassava Farmers

The farming systems adopted mainly by cassava farmers in Delta State are shown in table 4.1.

Majority of the cassava farmers in the study area adopted mixed cropping. This is indicated by

112 respondents accounting for 74.67% of the total number of cassava farmers. About 38

cassava farmers adopted mono or sole cropping, accounting for 25.33% of the total number of

respondents.

Table 4.1: Farming Systems of Cassava Farmers

Parameters Frequency Percentage (%)

Mixed Cropping 112 74.67

Sole Cropping 38 25.33

Total 150 100

Source: Computed from survey data, 2008.n = 150

The above result tends to agree with the findings of Richards (1985), that the cropping system

commonly practiced by farmers in the West African sub-region is mixed cropping. The adoption

of mixed cropping as the major farming system by cassava farmers in the study area is due to

scarcity of productive resources notably land. The system, according to the respondents, also

serves as insurance against total crop failure. It was also gathered from the respondents that crops

53

which are scattered among others are less vulnerable to pest attack than single stands. The

system (mixed cropping), according to the cassava farmers, also enables them to have access to

variety of crops throughout the year. This is also in line with the findings of Nweke (1981) that

most small scale farmers practice mixed cropping as an insurance against crop failure and loss of

capital and labour input. Some of the crops commonly grown together with cassava in the study

area include: maize, okro, pumpkin, pepper, melon among others in two crop mixture as

indicated by 65 respondents and three crop mixture as indicated by 47 respondents.

4.2 Socio-Economic Characteristics of Cassava Farmers

The socio-economic characteristics of the cassava farmers are presented in table 4.2.

Table 4.2: Distribution of Socio-economic Characteristics of Cassava Farmers

Parameter Frequency Percentage (%)GenderMale 88 58.67Female 62 41.33n 150Age of Farmers (Years)25-29 5 3.3330-34 4 2.6735-39 16 10.6740-44 34 22.6745-49 46 30.6750-54 26 17.3355-59 15 10.0060-64 4 2.67n 150Household Size5-8 63 42.009-12 67 44.6713-16 14 9.3317-20 6 4.00n 150Educational LevelNo formal Education (1) 54 36.00Primary School (2) 34 22.67Secondary School (3) 32 21.33Tertiary Education (4) 30 20.00n 150Farm Size (ha)< 1 46 30.671 – 2 89 59.333 – 4 10 6.675 – 6 3 2.007 – 8 2 1.33n 150Annual Farm Income (N)14,500-39,500 61 41.23

54

40,000-65,000 60 40.5465,500-90,500 19 12.8491,000-116,000 4 2.70116,500-141,500 3 2.03142,000-167,000 1 0.68n 148Source: Computed from Field Data, 2008.

The results reveal that both male (58.67%) and female (41.33%) are involved in cassava farming

in the study area. The reason for participation of both sexes in cassava production could be

explained by the fact that cassava is a major staple food crop and appreciable source of income

in the area of study.

The age of cassava farmers is a major determinant of cassava productivity. Thus, 83.34% of the

farmers had ages ranging between 40 and 64 years. Available evidence as reported by Oboh et

al’s study (as cited in Akpan, 2010) suggests an ageing farming population in Nigeria with an

average age of 47 years and an active farming age of between 21-50 years. Thus with such an

aged agricultural work force, agricultural productivity is bound to be low. Rural-urban migration

of able-bodied young men and women, as well as land resource degradation occasioned by

incessant oil spills in the area, is implicated in the relatively old age of the farmers.

A relatively large household size was found in the study area. About 58% of the farmers sampled

had family sizes of 10-20 persons. This supports the preponderance of large family sizes among

the poor in rural areas of Nigeria (Eboh, 1995). Though a very large family size may constitute a

social burden, large families use their labour input to an advantage in farming and forest products

exploitation. In fact, the intensity of agricultural production has been found to have a direct

relation to household size (Adhikari, 2002).

The level of educational attainment of the respondents is also revealed in table 4.2. A significant

proportion of the cassava farmers sampled had no formal education (36 percent), while 22.67%

55

had only primary education. On the whole, about 64% of the farmers had some form of formal

education. This observation, according to Inoni et al, (2005), tends to refute the alarming rate of

illiteracy prevalent in rural communities. Biswanger (1989) in Inoni, (2006) has asserted that

educated farmers tend to be more likely to adopt modern agricultural practices. However, a high

level of educational attainment may discourage some people from cassava production as such

persons may likely crave for white-collar jobs.

The sizes of farm holding in the study area are relatively small. About 59.33% of the respondents

had farm sizes ranging between 1 and 2 hectares while 30.67% of the farmers have farm sizes

less than one hectare (<1ha). This land fragmentation due to traditional ownership structure as

asserted by Inoni et al (2005), is antithetical to agricultural growth, because it does not support

mechanized and commercial farming. The level of income realized from cassava production by

the respondents reveal that farm incomes are very low. The annual farm income of the cassava

farmers which comprises mainly of the sales from cassava products, notably garri ranges

between N14,500 and N167,000 with an average of N41,835.87. This scenario could be

attributed to the sizes of farm holdings observed in the study area and the fact that rudimentary

methods of crop production involving the use of simple farm implements with little or no

application of fertilizers are employed.

4.3 Profitability Analysis of Cassava Farming

4.3.1 Cost Analysis in Cassava Farming

Total cost involved in cassava production is the sum of all the variable cost and fixed cost items.

Fixed costs include the cost of land and depreciation costs of farm tools and other accessories.

The depreciation costs represented the loss in value of the farming asset as a result of their use in

one production year. Items of fixed costs identified in the study included land, cutlasses, hoes,

56

spades, axe, diggers, files, sieve, frying pans and bags/sacks/bins. Variable cost items identified

in cassava farming from the study included labour, fertilizers, planting materials (cassava stems),

transportation, processing, among others.

Table 4.3 shows the average fixed and average variable cost of cassava farmer per hectare in the

study area.

Table 4.3: Average fixed and variable costs in cassava production per hectare

Fixed Cost Items Cost (N) Variable Cost Items Cost (N)

Land size 11,803.61

(42.73)

Labour 5,300.50

(27.74)

Cutlasses 2,628.72

(9.52)

Fertilizer 3,930.50

(20.57)

Hoes 955.31

(3.46)

Planting Materials 2,715.00

(14.21)

Spades 1,833.33

(6.64)

Transportation (2,827.40)

(14.80)

Axe 1,400.00

(5.07)

Processing 2,190.28

(11.46)

Diggers 3,073.53

(11.13)

Others 2,145.00

(11.23)

Files 478.38

(1.73)

Sieves 1,312.50

(4.75)

Frying pans 3,352.70

(12.14)

Bags/sacks/bins 786.41

(2.85)

Average fixed cost (N) 27,624.49 Ave. Var. cost (N) 19,108.68

(100) (100)

57

*Figures in parenthesis are percentages of total fixed costs and variable costs. Sources: Computed from Field Data, 2008.

From table 4.3, it is evident that average fixed cost per unit area was N27,624.49. This is

relatively low due to the fact that virtually all the fixed cost items used by cassava farmers in the

study area are crude with relatively low market prices. The locations of the study area which are

mainly of rural setting also contributed immensely to the low costs of fixed cost items, especially

land. The proportions of the fixed cost items are land (42.73%), cutlasses (9.52%), hoes (3.46%),

file (1.73%), sieve (4.75%), frying pans (12.14%) and bags/sack (2.85%).

Unlike fixed costs shown above, the variable or operating cost depends largely on the volume of

production and they included labour cost, fertilizer, cost of planting materials (cassava stems),

transportation and processing costs among others. The annual operating cost for the entire area of

study is N19,108.68. Among the operating cost items, labour, fertilizer, planting materials,

transportation and processing are the major expense components accounting for 28%, 21%, 14%,

15% and 11% respectively of the total variable costs. Variation in the cost of labour could be

attributed to differences in wage rates across the study areas. Moreso, the fact that majority of the

respondents used family labour instead of hired labour, coupled with the high rate of out

migration of able-bodied young men and women to nearby urban centers are other factors

implicated for the differences in operational costs of cassava farmers in the study area. The cost

of fertilizers as revealed from the study is relatively high (average cost prize of N3, 930.50 per

bag), hence only few farmers applied fertilizer to their cassava crop. The fact that most of the

respondents are not in cooperatives and could not have access to loans may have also led to their

inability to procure this vital input for their production activities.

58

The relatively low cost of planting materials (cassava stems) (N2,715.00) per hectare may be due

to the fact that most of the respondents, as gathered from their responses, used the cassava stems

from previous farming seasons. Others obtain theirs as free gift from neighbours. Only few

cassava farmers actually purchased their planting materials. Transportation and processing costs

were very crucial in the cassava production process accounting for 14.80% and 11.46%

respectively of the total operating costs. The relatively high cost of transportation and processing

may be attributed to the remote nature of the study areas and their distances to the market places.

The continual increase in the retail pump prices of petroleum products during the period of study

may have also contributed to variations in operational costs of cassava producers in the study

area especially in terms of transportation. The cost implications of other variable and fixed cost

items are presented also in table 4.3.

4.3.2 Returns in Cassava Production

Due to the poor storability of cassava tubers, most of the respondents processed the tubers into

various forms notably garri which they sold either at home, local market or urban market as the

case may be. Thus, gross return in cassava production from the study is the products of garri

produced and market price per kilogramme during the period of study. Because different output

of cassava products (garri) was produced and sold at different prices, the average market price

per kilogramme of garri was computed as shown in table 4.4. The descriptive statistics of garri

output in the study area showed that garri price ranged from N120.00/kg to N220.00/kg with a

mean price of N160.00/kg both before and after oil spill incidents. This, according to the

respondents is attributed to other garri sellers who also brought their products from non-oil spill

communities to the local market for sale. Thus, they have no option than to sell at the prevailing

mean market price even in the face of reduction in garri output occasioned by oil spillage.

59

Table 4.4: Total and Average Yield of Garri per Cassava Farmer before and after Oil Spill Incident (n=148)

Total Yield (kg) Χ (kg) Average Price (N)

Before oil spill 48,536 328 160

After oil spill 40,549.22 274 160

Source: Computed from Field Data, 2008.

Total yield of garri as shown in the table before the incidents of oil spills in the study area was

48,536kg with an average yield of 328kg. After spill incidents, total output of garri decreased

markedly to 40,549.22kg with an average output of 274kg. This reduction may be attributed to

the fact that when spills occur on soils, there is likely to be loss of soil fertility as essential

nutrients for plant growth become deficient and decomposition of organic matter would either be

slowed down or terminated. This supports the claims of Ukpong and Akpabio (2003).

Meanwhile, Chindah and Braide (2000), in a study on the effect of oil spill on crop production in

the Niger Delta, had reported that oil spill on crops cause great damage to the plant community

due to high retention time of oil occasioned by limited flow.

Also, Inoni et al, (2005), citing Anoliefo and Vwioko (1994), affirmed that germination, growth

performance and yield of crops are stifled by oil spillage. This scenario may have accounted for

a drastic reduction in yield of cassava tubers with attendant effect on the output of garri produced

in the study area.

Furthermore, a paired t-test was carried out to examine whether observed differences in yield of

garri before and after oil spill incidents were statistically significant as presented in table 4.5.

Table 4.5: Test for Difference in Yield of Garri before and after Oil Spill Incidents. Mean Output

(kg)

Mean Difference

(kg)

T-cal T-tab

60

Before spill 328 54 10.693 2.58

After spill 274

Means are significantly different at (p>0.01*)Source: Computed from survey data, 2008.

The results show that differences in yield of garri before and after oil spill incidents were highly

statistically significant (p>0.01). The devastating effect of oil spills on soil on which crops grow

may have accounted for this.

4.3.3 Net Farm Income Analysis

The net margin per garri production unit is gross margin (GM) less total cost of production. It is

the amount of money that the cassava (garri) producer receives after all costs have been deducted

from the gross revenue from the production process.

The results of the net margin analysis are presented in table 4.6

Table 4.6: Cost and Returns in Cassava (Garri) Production per Cassava Farmer in Delta State

Parameter Before Spill After Spill

Gross Revenue from Garri (N) 52,480 43,840

Less Variable Costs (N)

Labour 5,300.50

Fertilizers 3,930.50

Planting materials 2,715.00

Transportation 2,827.40

Processing 2,190.28

Others (miscellaneous) 2,145.00

Total variable costs (TVC) 19,108.68

Gross Margin (N) 33,371.32 24,731.32

Less Fixed Cost

Depreciation of land 2,360.72

Depreciation of farm tools 2,336.35

61

Deprecation of accessories

(frying pans, sacks, bins etc) 8,27.82

Total fixed costs (TFC) (N) 5,524.89

Net margin = [GR – (TVC + TFC)] 27,846.43 19,206.43

Source: Computed from Field Data, 2008

From table 4.6 above, the net margin (i.e. profit) per cassava farmer was N27,846.43 before oil

spill and N19,206.43 after spill in the study area. This shows that there was a reduction in profit

per cassava farmer by 31%.

The depreciation of the fixed cost items (land, farm tools and other accessories) was computed

using the straight line method. Since data were collected for a period of five (5) years, the fixed

cost items were assumed to have life span of five (5) years. The computation is shown below in

table 4.7.

Table 4.7: Depreciation of Fixed Cost Items

Items Initial Cost

(N)

Life Span (Years) Depreciation (N)

Land 11,803.61 5 2,360.72

Farm tools 11,681.77 5 2,336.35

Accessories 4,139.11 5 8,27.82

Total depreciation 55,24.89

Source: Computed from Field Data, 2008.

Meanwhile, the individual respondents’ net margin before and after oil spill incidence was

computed and after which, a paired t-test was carried out to test whether the observed differences

in net margin per cassava farmer before and after oil spill incidence were statistically significant.

The test results are presented in table 4.8.

62

Table 4.8: Test for differences in net margin (profit) per cassava farmer before and after oil spill incidents

Mean Net Mean t-cal t-tab

Margin (N) Difference (N)

Before spill 27,846.43 8,640 10.07 2.58

After spill 19,206.43

Means are significantly different at p = 0.01*

Source: Computed from Survey Data, 2008.

The results showed that t-calculated is higher than t-table at p = 0.01. This is an indication that

differences in net margin and hence profit per cassava farmer before and after oil spill incidents

in the study area are highly statistically significant (p = 0.01). This scenario could be attributed to

the low yield of cassava as a result of the negative impact of crude oil spills on soils leading to

low output of garri produced by cassava farmers for the market. This may have consequently

resulted in low returns on sales.

4.4 Corporate Social Responsibility of Oil Companies and Cassava Farming Activities

A total of 86 male cassava farmers and 64 female cassava farmers were interviewed using focus

group discussion method to ascertain the extent to which corporate social responsibility of oil

companies has improved the activities of cassava farmers in the study area. Corporate social

responsibility was evaluated on the basis of basic amenities provided in the study area. The result

is shown below:

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Table 4.9: Responses of Male Cassava Farmers (n = 86)Basic Amenities Provided No. of Responses %

Feeder road 35 40.70

Cottage hospital 30 34.88

Rural electrification 2 2.33

Classrooms’ blocks 21 24.42

Portable water 63 73.26

Skills acquisition training programme 4 4.65

Scholarship award 12 13.95

Others (town hall etc) 5 5.81

Not provided 17 19.77

Source: Computed from survey data, 2008.

Table 4.10: Responses of Female Cassava Farmers (n = 64) Basic Amenities Provided No. of Responses %

Feeder road 20 31.25

Cottage hospital 25 39.06

Rural electrification 1 1.56

Classrooms’ blocks 18 28.13

Portable water 48 55.81

Skills acquisition training programme 7 8.14

Scholarship award 13 20.31

Others (town hall etc) 3 4.69

Not provided 10 15.63

Source: Computed from Survey Data, 2008.

64

The responses gathered from both the male cassava farmers’ group and female cassava farmers’

group revealed some degree of corporate social responsibilities shown by oil companies to their

host communities. Provision of portable drinking water, cottage hospitals and feeder roads

ranked highest among the basic amenities mostly provided. 73%, 41% and 35% of the male

cassava farmers responded in favour of provision of portable drinking water, feeder roads and

cottage hospital respectively by the oil companies.

In the female focus group, 56%, 39% and 31% support the provision of portable drinking water,

cottage hospitals and feeder roads respectively by the oil companies. The above responses

support the claim of Lale, (2004), that the oil companies are responsible to the host communities

in a number of ways. Notable among them is community development through the provision of

social amenities (e.g. health, educational, religious and recreational facilities, etc) and

infrastructures (e.g. rural electrification, roads etc) to ameliorate the negative impact of their

activities on host communities.

In a bid to describe the extent to which corporate social responsibility of oil companies has

impacted on cassava production in the study area, the cassava farmers were interviewed if

actually, the provision of these basic amenities has improved their farming activities within the

years under review. The farmers responses are presented in table 4.11.

Table 4.11: Farmers Response as to Whether Corporate Social Responsibility (CSR) of Oil Companies has Improved their Farming Activities

Farmer’s Responses No. of Responses % Responses

Improvement with CSR 16 10.67

No improvement with CSR 134 89.33

n = 150

Source: Computed from Field Data, 2008.

65

From table 4.11, about 134 cassava farmers, representing 89% responded that the corporate

social responsibility of oil companies has not improved their farming activities. Only 16 farmers,

representing 11% of the respondents, responded in the positive. Thus, it can be inferred that

corporate social responsibility of oil companies, whether in terms of provision of basic amenities

or otherwise has little or no significant improvement on cassava production in the study area.

The above results tend to support the view of Ogunfuyi and Ejekwu (2004) that the gestures of

the government and its Joint Venture Partners (i.e., the multi-nationals), though may stimulate

agricultural development but certainly not peace needed for the economic vibrancy of the region

as these gestures cannot actually make up for the damage done to the environment through oil

exploration and production activities. The incessant militancy activities in some of the areas of

study which had led to the presence of heavy security operatives is attributed largely to the

negligence of the area despite the huge contribution to national development in terms of crude oil

production. Majority of the farmers have fled their homes for safety as lives are no more secured

in some of these areas. This, in no small ways has affected their farming activities notably

cassava production.

4.5 Effects of Crude Oil Exploitation on Land Productivity and Farm Income of

Cassava Farmers

The results of the regression analysis to estimate the effects of crude oil exploitation on land

productivity of cassava farmers in the study area in shown in table 4.12. Other explanatory

variables were equally estimated in the analysis. Different functional forms of the model-linear,

semi-logarithmic and double-logarithmic functions were fitted for the data as shown below.

66

Table 4.12: Regression Results on Factors affecting Land Productivity in Delta State Functional Forms

Variables Linear Semi-Log Double-LogLabour Inputs 7.704

(0.656)*328.520(0.842)*

0.023(0.729)*

Planting Materials -40.694(-2.661)

-237.348(-0.985)

-0.020(-0.014)

Farming Experience -13.203(-0.481)

-88.458(-0.182)

-0.006(-0.163)

Farmer’s Age 25.707(2.145)*

1008.742(0.996)*

0.081(0.984)*

Oil Spill -6.240(-2.090)*

-65.233(-0.125)*

-0.018(-0.031)*

R – statistic 0.60 0.21 0.21Adjusted R2 0.432 -0.006 -0.007DW – statistic 2.08 2.05 2.02F – statistic 1.118 0.772 0.756n 148 148 148Figures in parentheses are t-statistic *significant at the 5% level**significant at the 1% levelSource: Computed from Survey Data, 2008.

On the bases of economic theory, statistical as well as econometric criteria spelt out by

Koutsoyiannis (1977) and Olayemi (1998), the linear function was chosen as the lead equation.

This is because, the adjusted R2 of 0.432 shows that the independent variables jointly explained

about 43% of the variation in land productivity of cassava farmers compared to the other

functions. The regression analysis revealed that labour input and age of cassava farmers

impacted positively on land productivity with labour inputs having a coefficient of 7.704 and t-

ratio of 0.656 and farmers’ age having a coefficient of 25.707 and t-ratio of 2.145. The positive

67

and statistically significant impact of labour input is therefore an indication that labour is a very

critical factor at every stage involved in cassava production.

The effect of the oil spill dummy on land productivity turned out to be negative with a

coefficient of -6.240 and t-ratio of -2.090. The negative effect could be attributed to the fact that

crude oil exploitation, at any of its stages have either reduced land availability for agriculture or

has reduced the size of land available for farming (CRP, 1999). This in turn has reduced yield

and hence land productivity.

Hypothesis 1

Oil pollution has no significant effect on land productivity of cassava farmers:

H0: b5 = 0

Ha: b5 ¿ 0

Using a two-tail test at 1% and 5% level of significance, the f-calculated as shown in the

regression analysis is 1.118 while the F-tab is 1.00. Since the F-calculated is greater than the

corresponding table value, the null hypothesis which states that oil pollution has no significant

effect on land productivity of cassava farmers (H0 at p < 0.01, b5 = 0) is rejected and the

alternative hypothesis accepted.

The above hypothesis was further tested using the paired t-test for a difference in land

productivity before and after oil spill incidence. The result of the paired t-test shows that a

statistically significant difference existed in land productivity of cassava farmers before and after

oil spill incidence in the study area at 1% level of significance. This is because, the calculated t-

value (6.55) is greater than the t-tab, value (2.58) at the given probability level. Again, the null

hypothesis is rejected and the alternative accepted.

68

4.6 Effects of Oil Pollution on Cassava Farm Income

The result of the regression analysis of the effects of crude oil pollution on farm income of

cassava farmers in Delta State is shown in table 4.14, where different functional forms of the

model (i.e. model II - linear, semi-log and double log) were estimated. The estimated regression

results for all the functional forms fit the data well with an adjusted R2 value ranging between

0.918 to 0.953 implying that the independent variables jointly explain about 92-95% of the

variation in farm income.

Table 4.13: Factors affecting Cassava Farm Income in Delta State Functional Forms

Variables Linear Semi-Log Double-Log

Quantity of garri 145-379

(53.820)**

40932.550

(41.390)**

1.017

(39.723)**

Garri price 168.925

(8.363)**

28515.629

(6.668)**

0.753

(6.806)**

Oil spill -135.273

(-3.775)**

-25725.755

(-13.450)**

0.500

(6.410)**

R – statistic 0.954 0.925 0.919

Adjusted R2 0.953 0.924 0.918

DW – statistic 1.537 1.837 1.793

F – statistic 1496.490 892.508 825.493

n 148 148 148

Figures in parentheses are t-statistic**Significant at the 1% levelSource: Computed from Survey Data, 2008.

The result reveals that all the explanatory variables – garri quantity, garri price and oil spill

dummy exerted statistically significant effects on farm income of cassava farmers in Delta State

69

in a manner which to a large extent is in consonance with a prior expectation. However, the

linear function proved to have the best fit on the bases of economic theory, statistical as well as

econometric criteria (highest coefficient of correlation (R2) and adjusted R2 – 0.954 and 0.953

respectively) and hence, was chosen as the lead equation.

Although the signs of the independent variables are quite consistent with theoretical

expectations, only oil spill has negative impact on cassava farm income. The above result, thus

accentuated the negative impact of crude oil exploitation on crop production as farm income is

depressed due to the twin effects of land degradation and poor plant growth. This corroborated

the findings in Inoni et al (2005), in a similar work conducted in the South and Central Agro-

ecological Zones of Delta State.

Hypothesis III: Crude oil exploitation has no significant effect on farm income of cassava

farmers

H0: b3 = 0

Ha: b3 ≠ 0

Using a two-tail test at 1% and 5% level of significance, F-calculated is 1496.490 and F-tab is

1.00. Since the F-calculated is greater than the corresponding table value, the null hypotheses is

rejected and accept the alternative hypothesis that crude oil exploitation has significant effect on

farm income of cassava farmer.

To further test the above hypothesis, the paired t-test for a difference in farm income of cassava

farmers before and after oil spill incidence was computed. The result of the paired t-test revealed

that there is a statistically significant difference in farm income of cassava farmers before and

after oil spill incidence in the study area at 1% level of significant. This is because, the calculated

70

t-value (18.10) is greater than the t-tab value (2.58) at the given probability level. The null

hypothesis is thus rejected and the alternative accepted that oil exploitation has a significant

effect on cassava farm income in the study area.

4.7 Effect of Crude Oil Pollution on Cassava Yield

The regression results of the effects of crude oil pollution and other relevant explanatory

variables (model III) on cassava yield in the study area are presented in table 4.14. Two

functional forms of the model-linear and semi-log were estimated.

The estimated regression results also fit the data well with an adjusted R2 value ranging between

0.901 and 0.950 implying that all the independent variables jointly explain about 90-95% of the

variation in cassava yield. The detailed regression result is shown below:

Table 4.14: Factors affecting Cassava Yield in Delta State Functional Forms

Variables Linear Semi-LogFarm Size 11255.788

(35.393)**7682.467(5.328)**

Labour Inputs 50.842(2.213)**

3046.242(2.791)**

Planting Materials 9.366(0.188)**

1431.948(2.329)*

Farming Experience -119.764(-2.560)**

1019.083(0.843)*

Farmer’s Age 81.846(2.040) *

-3312.939(-1.277)*

Educational Level -219.193(-1.091)*

-611.477(-1.095)*

Oil Spill -201.143(-1.084)**

-521.277(-1.135)*

R-Statistic 0.952 0.905Adjusted R2 0.950 0.901DW – Statistic 2.015 2.101F – statistic 468.751 190.135n 148 148Figure in parenthesis are t-statistic *significant at the 5% level

71

**significant at the 1% levelSource: Computed from Survey Data, 2008.

The results from both functional forms indicate that all the explanatory variables-farm size,

labour inputs, planting materials, farming experience, farmer’s age, educational level of the

farmers and oil spills have a statistically significant effect on cassava yield in a manner which to

a large extent consistent with a prior expectations. This is similar to the findings of Inoni et al,

(2005).

However, on the bases of economic theory, a statistical as well as econometric criterion, the

linear function was chosen as the lead equation.

The regression equation reveals that farm size, labour input, quantity of planting materials and

farmers’ age impact positively on cassava yield. The positive and highly statistically significant

effect of farm size on cassava yield is an indication that the size of land cultivated, all things

being equal will determine the volume of harvest, that is the larger the farm size, the highest the

volume of harvest. Also, the positive and statistically significant influence of labour input shows

that labour input is a very crucial factor in cassava production. This is because, every stage

involved right from land preparation, planting, weeding, fertilizer application, harvesting,

processing, storage to final marketing of cassava products require an adequate amount of human

effort. This tends to refute the findings of Inoni et al (2005), where they found out that the

impact of labour input on crop yield was negative but not significant.

Oil spill, however, which is the major factor of the study exerted a negative and highly

statistically significant effects on cassava yield in consistent with theoretical expectations. This

scenario could be attributed to dearth of fertile arable land in the study area which itself is a

72

consequence of environmental degradation resulting from incessant crude oil exploitation in the

area. This corroborates the claims of Inoni et al, (2005).

Hypothesis II: Oil pollution has no significant effect on cassava yield in Delta State.

H0: β7 = 0

Ha: β7 ≠ 0

Using a two-tail test at 1% and 5% level of significance, the F-calculated from the relevant

ANOVA result, is 548.751 and F-tab is 1.00. Since the F-calculated is greater than the

corresponding table value, the null hypothesis is therefore rejected and the alternative accepted

that oil pollution has significant effect on cassava yield in Delta State.

To further test the above hypothesis, the paired t-test for difference in cassava yield before and

after oil spill incidence in the study area was computed.

The results of the paired t-test indicate that a statistically significant difference exist in cassava

yield before and after oil spill incidence in the study area at 1% level of significance. This is

because, the calculated t-value (9.376) is greater than the t-tab value (2.58) at the given

probability level.

The result of the test of means of differences are similar to those of Gbadegesin (1997) and

Ihejiamaizu (1999) as cited in Inoni et al; (2005) in studies they conducted in oil producing

communities in the Niger Delta region.

73

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary of Findings

The study was carried out to determine the economic effects of crude oil exploitation on cassava

production in Delta State. Specifically, the study was aimed at examining the farming systems

and socio-economic characteristics of cassava farmers, assessing the effects of crude oil

exploitation on land productivity, farm income and yield of cassava farmers in the study area.

Other specific areas of the study are the costs and returns in cassava farming as influenced by

crude oil exploitation and the degree to which corporate social responsibility of oil companies

has improved the activities of cassava farmers in the study area.

Stratified random sampling and simple random sampling techniques were used to select 204

small scale cassava farmers from six (6) local government areas where there are intensive oil

production activities. Two (2) communities known to have suffered oil spillage between 2001

and 2005 were selected from each local government area which made a total of twelve (12)

communities for the field survey from the three (3) agro-ecological zones of Delta State. Copies

of questionnaires were used to collect primary data that were used for the study. Data were

collected from the field between October, 2007 and February, 2009. The data collected include

farmer’s age, educational background, household size, household income, gender, farm size,

labour supply and cost, farming experience, input costs, level of cassava output and prevailing

market price per kilogramme of cassava product (garri). Influence of corporate social

responsibility of oil companies on cassava production activities in the study area were also part

of data collected from the field survey. The data were analyzed with descriptive statistics, costs

74

and returns analyses, net margin and ordinary least square (OLS) multiple regression analyses

using SPSS package.

The results showed that annual fixed cost per hectare was N27,624.49 while total variable cost

per hectare cassava farmer is N19,108.68. Land, frying pans, diggers and cutlasses were the most

critical items of fixed costs in cassava production accounting for 43%, 12%, 11% and 10% of

total fixed costs respectively. Labour, fertilizers, planting materials, transportation and

processing were the major operating cost components accounting for 28%, 21%, 14%, 15% and

11% respectively of the total variable costs. Total output of cassava product (garri) before and

after oil spills incidence in the study area are 48,536kg and 40,549.22kg with an average yield of

328kg and 274kg respectively per cassava farmer. The results further revealed that significant

differences exist in yield of garri before and after oil spill incidents. The study also found a net

margin of N27,846.43 and N19,206.43 respectively per cassava farmer before and after oil spill

incidents in the study area. This shows a 31% reduction in profit per cassava farmer due to oil

spillages. The test of difference computed also indicated that a significant difference exists in net

margin (i.e. profit) of cassava farmers before and after oil spill incidents.

In order to examine the influence of crude oil exploitation on cassava production, various

econometric models were specified and subsequently estimated. The results of the regression

analyses indicate that crude oil exploitation has a statistically significant effect on cassava

production, in consonance with a prior expectations. Specifically, using the linear functions as

the lead equation in all the models specified, land productivity, cassava farming income and

cassava yield were all significantly affected negatively by crude oil exploitation. The study

further revealed that there is some degree of corporate social responsibilities of oil companies to

their host communities in terms of provision of basic social amenities. However, the responses

75

gathered indicate that the provision of these amenities has little or no significant improvement on

the activities of cassava farmers in the study area looking at the extent of degradation done to the

environment through crude oil exploration and production activities.

5.2 Conclusion

The impact of crude oil exploitation on the degradation of the environment of the Niger Delta

region of Nigeria has raised questions of great concern to stakeholders, particularly oil producing

communities who have suffered polluted air, water resources, degraded forests and farm lands,

and very high atmospheric temperatures for over four decades. The results revealed that crude oil

exploitation represented by oil spill incidence in the study, exerted a negative and statistically

significant effect on cassava yield, land productivity and cassava farm income in a manner

consistent with a prior expectations.

Profitability of cassava production was also negatively affected by crude oil exploitation as net

farm income of the cassava farmers reduced considerably after oil spill incidence. To halt the

continual degradation of the Delta environment and its attendant effects on farmers, the

government at all levels must take pragmatic steps at enacting and enforcing stringent

environmental laws that will protect the oil-bearing communities as well as guarantee the people

a better means of livelihood.

5.3 Recommendations

Based on the results of the study, the following recommendations are made for purpose of policy

making and implementation.

76

1. A leading role should be played by the Federal Government in enacting and enforcing

stringent environmental laws that will protect the oil producing areas as well as guarantee

the people a better livelihood.

2. In order to protect and preserve our environment for meaningful farming activities, a long

term and comprehensive environmental monitoring programme should be put in place.

Thus, the current monitoring programme instituted by the Petroleum Inspectorate needs

to be expanded. Regular inspection of crude oil facilities should be carried out by the oil

industries and other relevant agencies to detect and ensure prompt replacement of all

worn-out facilities such as pipelines and weak and leaking valves that can provoke

spillage. Moreso, arrest, prosecution and necessary penalty should be meted out to any

person or group of persons involved in oil facilities vandalisation.

3. The damaging effect of oil spills on soil fertility with its resultants negative effects on

yield requires that concerted effort be made by the oil companies concerned at ensuring

that prompt soil fertility management practices are carried out after such spills are

cleaned up. In this regard also, fertilizers should be made available to the farmers at

subsidized rate.

4. Environmental awareness and education should be promoted in all aspects of our national

life both at formal and informal levels. This will with time raise the development of

positive attitudes and commitments of the people towards environmental management

and preservation.

5. That the entire operations and production of the oil industry are for the benefit of man

cannot be overemphasized. However, environmental management and resolution of such

77

conflicts as youth restiveness and militancy in the Niger Delta region due to

unprecedented neglect of the region in terms of infrastructural development merits policy

support by government due to the social and economic consequences of protracted

violence in the region. This, no doubt, will create a peaceful environment for cassava

farmers to carry out their farming activities.

5.4 Contribution to Knowledge

1. Contrary to many beliefs in the study area that cassava production is mainly carried out

by females, the study has revealed that cassava production is not gender specific. Both

men and women are actively involved in cassava production.

2. The study also brought to lime-light the positive and statistically significant impact of

labour on cassava production, contrary to some studies that labour input always has

negative and non-significant impact on crop production.

3. The multi-nationals have always been of the view that they have impacted positively on

the lives of farmers through their corporate social responsibility programmes. However,

the study has shown that these programmes had not improved significant activities of

cassava farmers in the study area.

5.5 Suggestion for Further Study

To make a more detailed inference, it is suggested that a comparative study of the economic

effects of crude oil exploitation on cassava production in oil-producing and non-oil producing

communities in Delta State should be researched into. The economic impact of crude oil

pollution on other farm enterprises such as fishing activities, small ruminant production,

vegetable production, alternative farm enterprises – agritourism, ecotourism and heritage

tourism, palm wine production, etc. should be explored.

78

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93

APPENDIX

ECONOMIC EFFECTS OF OIL EXPLOITATION ON CASSAVA PRODUCTION IN DELTA STATE

IDENTIFICATION

Questionnaire Identification Number: ________________________________________

Location/Place Name: _____________________________________________________

State: __________________________________________________________________

Local Government Area: ___________________________________________________

Name of Interviewer: ______________________________________________________

Data of Interview: ________________________________________________________

Name of Field Supervisors: _________________________________________________

SECTION 1: PERSONAL DATA OF RESPONDENTS

Please, tick () and fill where applicable

1. Local Government Area of Origin: _____________________________________

2. Locality/Town: ____________________________________________________

3. Gender (Sex) of Respondent: Male ( ) Female ( )

4. Highest Level of Education Attained:

Primary School ( )

Secondary Modern School ( )

Teacher Training College (TC II) ( )

Vocational School/Technical College ( )

NCE/Polytechnic, School of Agriculture ( )

University ( )

Adult Education ( )

No Formal Education ( )

Others: ______________________________________________________

Specify

5. Total number of years spent in school. Please specify: _____________________

_________________________________________________________________

94

6. Marital Status: Married ( ) Single ( )

Widowed ( ) Divorced ( )

7. Date of Birth: Day _________________________

Month _________________________

Year _________________________

8. Age of Respondent: ___________________________ years

9. What is your family size?

Wives/Husband __________________________________

No. of Boys ___________________________________

No. of Girls _____________________________________

Relatives: _______________________________________

Total: __________________________________________

10. Major Occupation: Farming ( ) Fishing ( ) Hunting ( )

Civil Servant ( ) Others (specify) __________________________________

11. Minor Occupation: Farming ( ) Fishing ( ) Hunting ( )

Petty Trading ( ) Civil Servant ( ) Others (Specify) ________________

SECTION II: CASSAVA PRODUCTION ACTIVITIES

1. State the number of years you have been involved in cassava farming:_________ _____________________________________________________________years

2. For the number of years stated above, have you participated in any farm training? Yes (

) No ( )

3. If yes, what was it about? Crop production ( ) Animal production ( ) Fish

production ( ) Soil conservation ( ) Others (Specify) ________________

4. What system of farming do you adopt in cassava production?

Sole Cropping ( ) Mixed Cropping ( )

5. If it is mixed cropping what are the crops you normally grow together with cassava on

your farm? (Name them): ___________________________________

6. What is the approximate size of your farm? < 1ha ( ) 1 – 2 ha ( )

3 – 4 ha ( ) 5 – 6ha ( ) 7 – 8ha ( ) 9 – 10ha ( ) above 10 ha ( )

7. How do you acquire your land for cassava production? Inherited ( ) Purchased ( )

Hired/Rent ( ) Gift ( ) Lease ( )

95

8. If purchased, state how much N: _______________________________________

9. If rented, state the number of years and the rentage

1 – 2 years ( ) Amount N: __________________________

3 – 4 years ( ) Amount N: __________________________

5 – 6 years ( ) Amount N: __________________________

7 – 8 years ( ) Amount N: __________________________

9 – 10 years ( ) Amount N: _________________________

10. How many bundles of cassava stems do you use for planting on your farm? (Specify):

_______________________________________________

11. How do you obtain your cassava stem? As gift ( ) from previous farm ( ) Purchased (

) Others (Specify): ______________________________

___________________________________________________________

___________________________________________________________

12. Tick (√) the type of tools/implement and state the number used by you for the period

2001 – 2005

S/n Tools/Implement Do you use?Yes No

Number used (Please specify)

i.ii.iii.iv.v.vi.vii.viii.ix.x.xi.

Cutlass West Indian HoeWest African HoeSpadeShovelAxeDiggerGarden ForkHead PanFileOthers

( ) ( )( ) ( )( ) ( )( ) ( )( ) ( )( ) ( )( ) ( )( ) ( )( ) ( )( ) ( )( ) ( )

13. Labour InputsActivity Family Labour Hired Labour

No. of M/days

Unit Cost(N)

Total (N)

No. of M/day

Unit Cost (N)

Total (N)

Land preparationPlantingWeedingFertilizerHarvestingProcessingStorageTransport

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SECTION III: FINANCE

1. Where do you source for finances for your cassava production activities?

Formal source ( ) Informal source ( ) Both ( )

2. If formal source(s), tick (√) among the following the specific formal source(s) of your

finance? Agric Banks ( ) Co-operative Organization ( ) NGOs ( ) Others

______________________________________

3. If informal source tick (√) among the following the informal source(s) of your finance?

Esusu ( ) Money lenders ( ) Relative ( ) Friends ( )

Personal Saving ( ) Others ________________________________

4. Have you taken any loan for your cassava production activities for the period 2001 –

2005? Yes ( ) No ( )

5. If yes, how much was the loan? N _______________________________

6. Was there any collateral required from you? Yes ( ) No ( )

7. What is the interest rate? ______________________________________

(Specify)

8. What is the payback of duration of loan? (Specify) ___________________

9. Have you defaulted in loan repayment? Yes ( ) No ( )

10. If defaulted, how much? (Specify): N _____________________________

11. If defaulted, for how long? (in years) ______________________________

12. If defaulted, state the reason(s): ___________________________________

____________________________________________________________

13. Are you a member of any co-operative or cassava producers association?

Yes ( ) No ( )

14. How many cooperatives or cassava producers associations do you belong to specify:

_____________________________________________________

15. Name them: (i) ______________________ (ii) _____________________

(iii) _____________________ (iv) _____________________

(v) _____________________ (vi) ______________________

16. What benefits do you enjoy from them? Tick (√) as many as applicable

i. Loan Yes No

ii. Bulk purchase of inputs ( ) ( )

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iii. Credit purchase of inputs ( ) ( )

iv. Marketing of cassava products ( ) ( )

v. Hiring of facilities ( ) ( )

vi. Social functions ( ) ( )

vii. Training of members ( ) ( )

viii. Others (...................) ( ) ( )

Specify

17. Did you experience any difficulty in obtaining loans? Yes ( ) No ( )

18. If yes, what difficulties did you encounter in obtaining loans?

(Tick (√) as applicable)

Formal sourcesYes No

Informal SourcesYes No

i.ii.iii.iv.v.vi.vii.

Cumbersome lending procedure Difficult collateral requirement Request for gratificationUnnecessary delay in disbursementHigh interest rateInadequacy of the loansOthers ......................................... Specify

( ) ( )( ) ( )( ) ( )( ) ( )( ) ( )( ) ( )( ) ( )

( ) ( )( ) ( )( ) ( )( ) ( )( ) ( )( ) ( )( ) ( )

SECTION IV: OIL SPILL INCIDENTS

1. Is there any crude oil production activity taking place in your locality? Yes ( ) No (

)

2. How many oil companies operate in your locality?

Specify: ___________________________________

3. Name them: (i) .............................................. (ii) ...........................................

(iii) ........................................... (iv) ..........................................

(v) ........................................... (vi) ........................................

4. Has there been any incident of oil spillage in your area between 2001 – 2005?

Yes ( ) No ( )

5. If yes, describe briefly the nature of the spills on the area?

________________________________________________________________

________________________________________________________________

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6. Please, state if there was any concerted effort by the oil company concerned at cleaning

up the soil: ________________________________________________

________________________________________________________________

SECTION V: OIL SPILL’S EFFECT ON LAND PRODUCTIVITY, CASSAVA YIELD

AND FARM INCOME

a. Farm Size

1. What was the approximate size of your farm before the incidence of oil spillage in your

locality? <1ha ( ) 1 – 2 ha ( ) 3 – 4 ha ( ) 5 – 6ha ( ) 7 – 8ha ( )

9 – 10ha ( ) above 10 ha ( )

2. Has there been any decline in the size of your farm between 2001 – 2005 as a result of oil

spills incident? Yes ( ) No ( )

3. If yes, state the approximate size of your farmland after the oil spill incident?

___________________________________________________

b. Yield/Output of Cassava

1. Before the incidence of oil spills in your community, what was the average yield

or output of cassava tubers in terms of number of basins/baskets harvested from

your farm?

Average No. of Basin/Baskets: ___________________________

Kg. Equivalent: _______________________________________

2. Has there been any reduction or decline in the level of output or yield of cassava

tubers between 2001 and 2005 after the spills incident?

Yes ( ) No ( )

3. If yes, state below the yield or output of cassava tubers in terms of average

number of basins/baskets harvested from your farm since the incidence of oil spill

between 2001 – 2005

Years Yield/Output of Cassava TubersNos. of Basins Kg. Equivalent

20012002200320042005Χ

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c. Farm Income

1. Marketing of Cassava Products

1. Where do you normally sell your cassava product?

Local Market ( ) Urban Market ( )

At home ( ) On farm ( ) Local and Urban market ( ) At

home and local market ( ) On farm, local and urban market (

) Others (specify) _____

2. What is the distance you cover to sell your cassava products? (in

km) ___________________________

3. Who are your customers? Retailers ( )

Wholesalers ( )

Institutions ( )

Final Consumer ( )

Others: _______________

Specify

4. In what form do you market or sell your cassava products?

Yes No

i. As tubers ( ) ( )

ii. As garri ( ) ( )

iii. As starch ( ) ( )

iv. As tapioca ( ) ( )

v. As starch and garri ( ) ( )

vi. As tapioca and starch ( ) ( )

vii. As tapioca and garri ( ) ( )

viii. As tapioca , garri and starch ( ) ( )

ix. Others __________________

Specify

4. How many baskets/buckets of garri does your basin of cassava tubers yield before and

after spills incidence

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Before Spillage After SpillageNo. of Baskets/Bucket Kg. Equivalent No. of Baskets/Buckets Kg. Equivalent

6. How many buckets of starch does your basin of cassava tubers yield?Before Spillage After Spillage

No. of Bucket Kg. Equivalent No. of Buckets Kg. Equivalent

7. How many buckets of tapioca does a basin of cassava tubers yield?Before Spillage After Spillage

No. of Bucket Kg. Equivalent No. of Buckets Kg. Equivalent

ii. Sales of Cassava Products Before and After Spills Incidents between 2001 – 2005

1. Sales of cassava tubersa. Before oil spills incident

Average No. of Basins Sold (Kg) Unit Price (N) Total (N)

b. After Spills Incident (Between 2001 - 2005)

Years No. of Basins Sold (Kg) Unit Price (N) Total (N)20012002200320042005Χ

2. Sales of Garri

a. Before Oil Spills Incident Average No. of Baskets/Buckets Sold (Kg) Unit Price (N) Total (N)

b. After spills incident (between 2001 - 2005)Years No. of Basins Sold (Kg) Unit Price (N) Total (N)20012002200320042005Χ

101

3. Sales of Starch

a. Before Oil Spills Incident Average No. of Buckets Sold (Kg) Unit Price (N) Total (N)

b. After spills incident (between 2001 - 2005)Years No. of Buckets Sold (Kg) Unit Price (N) Total (N)20012002200320042005Χ

4. Sales of Tapioca

a. Before Oil Spills Incident Average No. of Buckets Sold (Kg) Unit Price (N) Total (N)

b. After spills incident (between 2001 - 2005) Years No. of Buckets Sold (Kg) Unit Price (N) Total (N)

20012002200320042005Χ

SECTION VI: Cassava Production Inputs Cost

State how much you spent on the following inputs in each of the years shown below Inputs/Years 2001 N 2002 N 2003 N 2004 N 2005 NFertilizerAgro-chemical Cassava StemsFarm toolsTransportationProcessingStorage Others

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SECTION VII: Corporate Social Responsibility of Oil Companies in the Study Area (Focus Group Discussion Approach)

Focus Group A: Male Cassava Farmers

1. Which of these facilities/amenities are being provided by oil companies in your area?

(Tick as many as applicable)

a. Feeder Road ( )b. Cottage Hospital/Health Centre ( )c. Electricity ( )d. Classroom Blocks ( )e. Portable Drinking Water ( )f. Provision of Farm Inputs to Farmers ( )g. Organizing Extension Programme for Farmers ( )h. Skills Acquisition Training Programme ( )i. Scholarship Award to Deserving Children ( )j. Others __________________________

Specify ( )

k. None ( )

2. Would you say that the provision of these amenities in your locality has improved your

farming activities within the last five years?

Comment: ___________________________________________________

3. How would you rate the level of improvement of these amenities on your farming

activities? Very high ( ) High ( ) Low ( ) Very low ( )

Focus Group B: Female Cassava Farmers

1. Which of these facilities/amenities are being provided by oil companies in your area?

(Tick as many as applicable)

a. Feeder Road ( )b. Cottage Hospital/Health Centre ( )c. Electricity ( )d. Classroom Blocks ( )e. Portable Drinking Water ( )f. Provision of Farm Inputs to Farmers ( )g. Organizing Extension Programme for Farmers ( )h. Skills Acquisition Training Programme ( )i. Scholarship Award to Deserving Children ( )j. Others __________________________

Specify ( )

k. None ( )

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2. Does the provision of these amenities in your locality improve y our farming activity

within the last five years? Yes ( ) No ( )

3. How would you rate the level of improvement of these amenities on your farming

activity? Very high ( ) High ( ) Low ( ) Very low ( )

4. Which of the following would you consider as effect(s) of oil exploitation on cassava

production in your locality?

(Tick as many as applicable)

Yes Noi. Decline in size of farmland ( ) ( )ii. Decline in family size available for labour ( ) ( )iii. Lack of interest in farming activities ( ) ( )iv. Reduced yield/output of cassava per hectare ( ) ( )v. Reduced farm income of cassava farmers ( ) ( )vi. Others ________________________________________________

(Specify)Make any general comment on the effect of crude oil exploitation on cassava production in your area: ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

104