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PROFITABILITY ANALYSIS OF NATURAL RUBBER TAPPING IN SOUTHERN NIGERIA
Tapping is defined as the controlled wounding of a matured rubber tree with the aim of extracting from it the economic fluid called latex while at the same time ensuring that the economic life of the tree is preserved.16 to 25 years( age of plantation) is considered economical and if not rehabilitated would lead to decline in yield hence reduction in income. For profit maximization, it is advisable that the plantation be opened for tapping when 70 to 75 percent of the trees in the plantation have reached tappable girth of 50 cm, this gives 315 to 338 trees/ hectare. Criteria to be observed include: seedling trees should be attain a girth of 50 cm taken from a height of 75 cm and for budded trees, a girth of 50 cm and from a height of 150 cm from the base of the tree. A girth measuring caliper is used for this determination.
The conventional system of tapping expresses the frequency of tapping as a fraction of daily tapping on a full circumference; alternate daily tapping denoted by 1/2Sd2 is adopted by many plantations in Nigeria. This means that half the circumference of the tree is cut during tapping and is done on alternate days and ideal for older plantation(Tappan and Okogie, 1970). Schroth et al.,(2004) agreed that the system improves the general health of the trees as compared to tapping all round the trunk, reduces bark consumption and liberate time to tap perhaps 50 percent more trees without any reduction in per – tree yields. Empirical evidence suggests that yields derivable from Hevea tree is controlled by several factors such as tappers skill, level of field maintenance, clonal characteristics, climate, degrees of exploitation, tapping efficiency and socio- economic factors( RRIN, 1983). Bark consumption and depth of cut is another factor affecting yield/ tree. Tapping cut should penetrate deep enough very near the cambium layer but should not touch the cambium. If the cambium is damaged, it will result to irregular bark regeneration and frequently lead to bark bursting, hence the need for efficient exploitation as the bark of the rubber tree is the economic reserve of the farmer. Removal of 1 to 1.5 mm is ideal ( Delabarre and Serier, 2000). Ehika and Onyeanakwe( 1998) reported that an ideal tapping system is expected to maximize yield, minimize costs, give satisfactory growth, ensure good bark regeneration and reduce incidence of disease attack especially bark burst.
On aspect of clones and field maintenance RRIN (1983) reported that unselected clones have lower yields of 200 t0 300 kg/ha, but Williams etal.,(2001) suggested the use of improved clones. However, for quality control, the plantation must be slashed regularly to ground level. Wind broken trunks and branches should be removed as soon as they occur. This is done to create airy and less humid environment. Tapping panels should also be cleaned, pieces of barks, leaves should not be allowed into latex as these introduce impurities with consequences such as poor pricing of output and production of inferior automobile products( Ehika and Onyeanakwe, 1998).
Studies have indicated that several factors affect net return from tapping of natural rubber in Nigeria. Product adulteration by farmers is one factor. World market price affect expected revenue as indicated in Table 1.Aigbekaen and Alika (1984) in their studies found out an average daily output of 9.56 kg/ day of dry rubber/ tapper. With the price of 70 kobo per kilogramme, net revenue of N1.88 per tapper was realized after adjusting for tappers’ wage of N N4.81, this according to the authors is uneconomical as the rubber industry depends solely on tappers daily output.
Suyanto et al.,(2001) in a study to identify the impacts of land tenure institutions on the efficiency of farm management based in customary land areas osf Sumatra, identified age and ownership systems as determinants of gross revenue and residual profit. Age of rubber trees is a major factor affecting profit, which peak at 32 and 34 years. They further stated that profits are also higher under borrowing and renting through share tenancy, counter to the familiar argument that share tenancy is inefficient because tenants shirk from their tasks. Since both borrowing and renting tend to be short term agreements in the study area, temporary operations may seek to squeeze much output from rubber tree as possible in the short run. This over tapping can have detrimental effect on profitability over time, since tapping intensity is negatively related to future latex production. They suggested a close – knit social relation in these areas to prevent overtapping
Cost of production of natural rubber in many rubber producing countries have continued to be on the increase over the years, but despite these, profits are still reasonable. Rubber Research Institute of Sri – Lanka, RRIS( 2002) reported a tapper’s daily productivity of 7.6 kg, which is low. This was attributed to intermittent wet weather, which also affected tapping days. The report indicated that total tapping days of 186, 208, 204 and 302 respectively. And yields per hectare of 728, 820, 838 and 879 for 1999 to 2002 production periods.
Abolagba etal.,(2003) in a study conducted on farm gate marketing of natural rubber in south east Nigeria discovered a positive correlation between world market prices and local prices of rubber in Nigeria. Schroth et al., (2004) also found out that Brazilian rubber tappers earn about R$200( minimum salary) by tapping 1000 trees in two days and a world market price of $0.30/ kg. Rubber Asia( 2006) identified price volatility and unseasonal rains disrupting tapping as factors that affect profit.
The objectives of the study were describe socio- economic characteristics of rubber tappers, estimate cost and return associated with rubber tapping and to identify problems affecting rubber tappers.
Table 1: World Price of Natural Rubber 1988 – 2003
Year World market price( N /kg)
Source: Abolagba et al.,( 2003), CBN Annual Reports and Statement of Accounts( various issues)
Materials and Methods
Descriptive statistics used include frequency counts, means and percentages. Budgeting technique was used to estimate income generated from rubber tapping. The specific type of budgeting technique used was the gross margin. Gross margin is the difference between gross income and the total cost of production. The gross margin analysis is manually used to study the performance of an enterprise that is the productive components of a firm to obtain information about the business strength or weakness( Bucket,1988). The item of tapping income considered were cost of inputs like labour, formic acid, ethephon( ethrel) and fuel ( diesel and petrol) while fixed costs considered included depreciation values on tapping equipment such as tapping knives, cup hangers, spouts, sharpening stones, buckets, churns( bulking containers), coagulating pans, rain boots, rain coat, Avarice weighing balance, metrolac or latexometre and tractor. The straight- line method was adopted in the computation of depreciation on fixed cost items. This method according to Adegeye and Dittoh( 1985) is easy to compute and despite the advantages which other methods have over it, it is usually used for most planning purposes. When compared with other methods carefully, it yields similar results. The model used for the estimation of the Gross margin was explicitly stated thus:
Gross margin (GM) = GI – TVC (1)
Where: GM = Gross Margin, GI = Gross Income, TVC = Total variable cost.
Results and Discussion
Socio- economic characteristics of respondents
Table 2: Socio- Economic Characteristics of Respondents.
Variable Frequency Percentage
Secondary 23 17.83
Total 129 100
≤14 75 58.14
15- 21 38 29.46
22- 28 16 12.40
Total 129 100
Task( no. of trees)
≤300 1 0.70
301 – 350 46 35.66
351- 360 6 4.65
361- 400 54 41.86
401- 450 22 17.05
Total 129 100
Source: Field survey, 2006
One can infer from Table 2 the preponderance of the educated tappers and this would enable them adopt tapping techniques without much difficult as they are likely to learn with ease and disseminate innovations. It can thus be observed that majority of tappers were trained for 14 days with a mean training duration of 18 days. It is expected that with training, the output of the tappers will be high. It was also found out that a mean of 387 trees were tapped per day as against the 450 to 500 trees recommended by Schroth et al.,(2004).Several factors have been identified for low number of trees tapped and include the following: weedy plantations, wind damages to rubber trees and incidences of pest and diseases of natural rubber.
Gross margin analysis
Table 3: Average Cost and Return of Permanent and Non-Permanent Rubber Tappers
A. Variable cost 45,638.92
Total output 2,971.85 kg
Price/ kg 50.00
Total Revenue 148,592.50
Gross margin (TR-TVC) 102,953.58
NFI( GM – TFC) 14,214.11
Return to gross investment 0.11
Source: Field survey, 2006
Major Problems Affecting Tappers Productivity
Table 4: Distribution of tappers based on problems affecting their productivity
Problem Frequency Percentage * Rank order**
Plantation management constraints 105 81.39 1
Conclusion and Recommendations
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