In spite of the dominance of petroleum as the major revenue earner in Nigeria, agriculture still constitutes a very significant sector of nation’s economy. Almost 70% of the Nigeria populace obtains their means of livelihood from agriculture which also provides raw materials for the manufacturing sector and the generation of foreign exchange (Odoemenem and Inakwu, 2011).
Rice, Oryza sativa, has been cultivated in parts of the Northern parts of Nigeria since the sixteenth century but its importance in the food economy of the nation dates back to the early 20th century (Agboola, 1979). Today, rice is cultivated in virtually all the agro-ecological zones in Nigeria, but on a relatively small scale. According to PCU (2001), in the year 2000, out of about 25 million hectares of land cultivated to various food crops, only about 6.7% was under rice. According to WARDA (1993), rice has become a staple food of considerable strategic importance in many rapidly growing African cities where its consumption among urban poor households has increased substantially. It is one of the most popular food commodities in Nigeria being widely accepted and consumed in one form or another by households across all ethnic, religious, and geopolitical zones in the country. Its economic importance is also strengthened by the fact that unlike other cereals, rice is less prone to storage pest attacks and as such, may be stored over a relatively longer period (Aderinola, 1997).
Despite efforts by several government agencies in Nigeria, a wide gap continues to exist between domestic rice supply and demand in the country. The insufficiency in rice production in Nigeria has been attributed to low (and declining) yield. Specifically, rice yield in Nigeria dropped from about 1.5 tons per hectare in 1997 to 1.01 tons per hectare in 2003 (FAO, 2004). As a result of divergence in supply and demand gap, imported rice has continued to be sourced to supplement domestic production. The rice import bill for Nigeria, which was N123.61 million in 1980 (Okorji and Onwuka, 1994), was projected to rise to N9.72 billion in year 2000 (FOS, 1998). This did not only drain the nation’s foreign exchange reserves but almost virtually crippled the domestic rice industry. In Nigeria, the diverse rice production conditions cover three major ecologies of rain-fed upland, rain-fed lowland and irrigated lowland (Odoemenem and Inakwu, 2011).
The south western Nigeria which is noted for its large land area (916,380 ha), suitable for rain-fed upland rice production, had the highest indices of productive efficiency in rice in the country (Aderinola, 1997). However, much of the estimated potential hectarages suitable for rain-fed upland rice production had not been put into productive use (Adesimi and Fabiyi, 1995). Despite the great potential of rain-fed upland rice production in Southwestern Nigeria, no empirical study had been conducted to economically appraise and compare the performance of rain-fed upland production in Osun and Oyo states of south western Nigeria.
Thus, this paper examined the demographic and production characteristics of rain-fed upland rice farmers; determined the profitability of rain-fed upland rice production; estimated and compared the technical efficiencies of rain-fed upland rice farmers in the study areas.
It was therefore hypothesized that: (1) rain-fed upland rice farmers were producing in the efficient region of production surface, and (2) there was no technical inefficiency effects in rain-fed upland rice production in the study areas.