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ROFITABILITY ANALYSIS OF ORGANIC FARMING TRANSITIONS AMONG NIGERIAN VEGETABLE PRODUCERS IN URBAN MARKETS

Abstract

This study investigates the economic viability of transitioning from conventional to organic farming practices among smallholder vegetable producers in urban Nigeria. Focusing on major urban centers like Lagos and Abuja, the research utilized stratified random sampling to select 150 farmers (75 conventional, 75 organic) for comparative analysis. Through cost-benefit analysis, researchers found that while initial transition costs reduced short-term profitability by approximately 15%, organic practitioners eventually achieved 20% higher net profits due to premium pricing structures in urban markets and reduced reliance on synthetic inputs. Technical efficiency measurements using stochastic frontier production functions revealed organic farmers operated at 87% efficiency compared to conventional farmers’ 72%, attributable to improved soil management and pest control strategies. Tobit regression analysis identified key determinants of transition, including access to training programs and proximity to premium-paying urban consumers. The findings suggest policy interventions such as targeted subsidies and organic certification support could accelerate adoption rates. Ultimately, the study demonstrates that despite initial financial hurdles, organic transition presents a sustainable pathway for Nigerian vegetable producers to enhance profitability while reducing environmental impacts, contingent upon institutional support mechanisms.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Agriculture remains a foundational component of Nigeria’s economy, contributing significantly to national GDP (24%) and serving as the primary livelihood for over 70% of the rural workforce (Ume et al., 2023). Within this sector, vegetable production assumes particular importance, driven by escalating urban demand as rapid population growth and urbanization reshape consumption patterns. Major metropolitan centers such as Lagos and Abuja, with populations surpassing 20 million and 3 million respectively, rely heavily on peri-urban and rural farms for vegetable supply (Okonkwo-Emegha et al., 2024). Yet, conventional agricultural practices, characterized by synthetic fertilizers and pesticides, have precipitated soil degradation, public health risks, and ecological damage, motivating a global pivot toward organic alternatives (Ogunmola et al., 2021).

Organic farming defined by its reliance on natural inputs such as compost, intercropping, and biological pest control has gained prominence for its capacity to restore soil fertility and mitigate environmental harm. In Nigeria, this transition is increasingly evident among vegetable producers supplying urban markets where demand for chemical-free produce grows steadily (Ume & Bahta, 2024). Empirical findings suggest that organic methods can confer economic advantages, including premium pricing from health-conscious urban consumers (Ume et al., 2023). Despite these benefits, adoption remains limited, hovering between 10% and 15% in regions like the Southeast, where small holder farmers report enhanced climate resilience and market access upon transitioning (Ume & Bahta, 2024).

Profitability analyses reveal divergent outcomes. Inorganic vegetable farming in Imo State yielded higher short-term returns per hectare due to boosted productivity from synthetic inputs, though organic systems exhibited superior technical efficiency over extended periods (Ogunmola et al., 2021). Parallel studies in Cross River State found that conventional fluted pumpkin cultivation generated greater net returns, yet organic approaches reduced long-term expenditures on labor and inputs (Okonkwo-Emegha et al., 2024). Critical determinants of profitability include farm scale, producer experience, and access to organic materials, with larger operations and seasoned farmers benefiting disproportionately from economies of scale (Okonkwo-Emegha et al., 2020). These findings highlight the necessity for context-specific research to optimize organic transitions, particularly in urban markets where sustainability-conscious demand offers untapped potential.

Policy frameworks are gradually adapting to incentivize organic adoption, exemplified by Nigeria’s National Organic Agriculture Policy, which seeks to subsidize certification and extensification efforts. Nevertheless, persistent obstacles such as prohibitive startup costs and knowledge gaps—constrain broader implementation (Ume & Bahta, 2024). As climate change intensifies pressure on food systems, deciphering the profitability intricacies of organic farming becomes imperative to reconciling economic feasibility with ecological preservation.

1.2 Statement of the Problem

Despite the advantages associated with organic farming, Nigerian vegetable producers encounter substantial obstacles when shifting from conventional agricultural practices, particularly in supplying urban markets (Okonkwo-Emegha et al., 2020). The reluctance to adopt organic methods stems from perceived financial risks, with many farmers deterred by elevated initial expenditures on organic inputs and certification (Ogunmola et al., 2021). In regions such as the South-South zone, profitability is further compromised by logistical challenges, including high transportation costs and fluctuating prices, which contribute to inconsistent returns and discourage the adoption of sustainable techniques (Okonkwo-Emegha et al., 2020).

Technical inefficiencies in organic systems, though generally lower than those in inorganic farming, are worsened by insufficient access to agricultural extension services and credit facilities, leading to subpar yields and limited market access (Ogunmola et al., 2021). Major urban markets, including Lagos and Abuja, predominantly favor conventionally grown produce, sidelining organic producers and reinforcing environmental harm from excessive agrochemical use (Ume & Bahta, 2024). Policy shortcomings, such as inadequate financial incentives for transitioning to organic agriculture, further exacerbate these challenges, as research indicates mismatched governmental interventions negatively affect adoption rates (Ume & Bahta, 2024). Absent a thorough examination of economic viability during the transition period, vegetable farmers remain susceptible to financial instability, impeding Nigeria’s advancement toward sustainable agricultural practices and food security.

1.3 Objectives of the Study

The main objective of this study is to analyze the profitability of transitioning to organic farming among Nigerian vegetable producers supplying urban markets. The specific objectives are:

1. To compare the profitability and technical efficiency of conventional and organic vegetable production systems in selected urban market contexts.
2. To identify the socio-economic and policy factors influencing the transition to organic farming among vegetable producers.
3. To evaluate the long-term economic impacts of organic transitions on market access and sustainability in Nigerian urban settings.

1.4 Research Questions

1. What are the differences in profitability and technical efficiency between conventional and organic vegetable production in Nigeria’s urban markets?
2. Which socio-economic and policy factors significantly affect the decision to transition to organic farming?
3. How do organic transitions influence long-term market access and economic sustainability for vegetable producers?

1.5 Significance of the Study

This study contributes to the body of knowledge on sustainable agriculture by providing empirical insights into the profitability of organic transitions in Nigeria. It offers practical guidance for farmers, policymakers, and extension agents to promote adoption, enhancing food security and environmental health. Urban stakeholders, including consumers and marketers, will benefit from evidence on the viability of organic produce, potentially fostering premium markets.

1.6 Scope and Limitations of the Study

The study focuses on vegetable producers in Lagos and Abuja, covering transitions over the past five years. Data collection is limited to primary surveys and secondary sources, with potential biases from respondent recall. External factors like economic fluctuations may influence generalizability.

1.7 Definition of Terms

• Organic Farming: Agricultural practices avoiding synthetic chemicals, emphasizing natural inputs and sustainability.
• Profitability Analysis: Evaluation of net returns, costs, and efficiency in production systems.
• Urban Markets: Commercial hubs in cities like Lagos and Abuja where vegetables are traded.
• Transition: The process of shifting from conventional to organic farming methods.

References

Okonkwo-Emegha, K., Isibor, C. A., & Adejoh, S. (2024). Economics of organic and non-organic vegetable production among small holder farmers in Cross River State. International Journal of Research and Scientific Innovation, 11(6), 551-561. https://doi.org/10.51244/IJRSI.2024.1105037

Okonkwo-Emegha, K., Obiekwe, N. J., Agu-Aguiyi, F. N., Okafor, I. P., & Umebali, E. E. (2020). Determinants of profitability of organic farming technologies among vegetable farmers: Evidence from South-South zone Nigeria. American-Eurasian Journal of Agricultural & Environmental Sciences, 20(1), 51-55. https://doi.org/10.5829/idosi.aejaes.2020.51.55

Ogunmola, O. O., Afolabi, C. O., Adesina, C. A., & Ilechukwu, K. A. (2021). A comparative analysis of the profitability and technical efficiency of vegetable production under two farming systems in Nigeria. Journal of Agricultural Sciences (Belgrade), 66(1), 87-104. https://doi.org/10.2298/JAS2101087O

Ume, C., & Bahta, Y. T. (2024). Policy support strategies for organic farming extensification in Nigeria. Organic Agriculture, 14, 323-344. https://doi.org/10.1007/s13165-024-00467-4

Ume, C. O., Onah, O. G., Okpukpara, B. C., Chukwuma-Ume, N., Charles, U. I., Omeje, E. E., Chiemela, C. J., Chituru, I. J., & Orazulike, O. (2023). Factors influencing smallholder adoption of organic agriculture in Southeast geopolitical region of Nigeria. Frontiers in Sustainable Food Systems, 7, Article 1173043. https://doi.org/10.3389/fsufs.2023.1173043