Effects of Oil Exploitation on the Efficiency of Artisanal Fishing Households in the Niger Delta Region, Nigeria
ABSTRACT
This study presents the empirical analysis of the effects of oil exploitation on the efficiency of artisanal fishing households in the Niger Delta region, Nigeria. The selection of respondents was multi-staged and involved purposive sampling as well as random sampling methods. A structured questionnaire and interview schedule were used to elicit information from a randomly selected sample of 160 artisanal households from Delta and Bayelsa States, Nigeria. Descriptive statistics, stochastic frontier production and cost function models, inefficiency effects model and multiple regression analysis were used in analyzing the data. Among the major findings were that 84% of the respondents were male-headed households. Fifty percent were between 41-50 years. Sixty three percent were illiterates while 87% were married. The average household size was 7 persons. About 49% of the respondents had fishing experience of above 16 years with a mean experience of approximately 15 years. The average annual income per household was N96, 386.00. About 85%, 6%, 6% and 4% used different fishing gears such as nets, trap, longline and hooks, and fence fishing, respectively. The mean technical efficiency was 73%. The Cobb-Douglas stochastic frontier model showed that labour, quantity of bait used and capital inputs had positive signs and were highly significant at 1% level of probability. Age, access to credit and gender had significant inverse relationship with technical inefficiency while fishing distance, membership of co-operative society, fishing experience, number of trips and oil spill had significant positive relationship with technical inefficiency. Model showed that wage rate, price of baits and output adjusted for statistical noise had direct relationship with the total cost of production and were significant at 1% level of probability. The mean economic efficiency was 68%. The factors influencing economic efficiency showed that Age and household size had a negative relationship with economic inefficiency while access to credit, membership of co-operative society, number of trips and oil spill had significant positive relationship with economic inefficiency. Ninety seven percent of the households confirmed that oil exploitation activities had serious effect on their socio-economic life. Variables such as fishing equipment, non-fishing income and household size were significant at 1%, fishing experience was significant at 5% while micro-credit and compensation received were significant at 10% probability levels. The overall regression result was statistically significant at 5% level of probability as 86% of the total variation was explained by the socio-economic variables. Therefore, the study calls for policies that could reduce the level of oil pollution and increase their technical and economic efficiency.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The search for oil in Nigeria started in 1906 when the Nigerian Bitumen Corporation (NBC) drilled fourteen wells in Lagos area (Pearson, 1970). This move was however called off due to the outbreak of World War I. Pearson (1970) stated that Shell made Nigeria’s first commercial oil discovery in 1956 at Oloibiri located in Bayelsa State. This according to Pearson (1970) and Ozobia (1998) led to the discovery of numerous other oil fields and subsequently to the development of various terminals. Oil spillage and pollution are some of the negative by-products of the petroleum industry and its effect on socio-economic life of the artisanal households is a source of major concern. The exploration and exploitation have had impacts on the environment through frequent spills, pipe explosions, pollution, sabotage, gas flaring and effluent emission. Other sources of oil pollution to the environment include transportation, effluent water from oil refineries, lubrication oils and other wastes in the form of sludge, bitumen, slops and oil sand/sediment present in large amount within oil flow stations, storage terminals and tanks (Ogri, 2001; Nwilo & Badejo, 2005).
Oil production and consumption has probably brought both the best and worst of modern civilization in Nigeria. It has contributed enormously to the country’s economic growth and on the other hand, has left profound adverse impact on the natural environment. Nigeria is currently the largest producer of crude petroleum in Africa and sixth largest in the World. Estimates of Nigeria’s oil reserve range from 16 billion to 22 billion barrels, mostly found in small fields in the coastal areas of the Niger Delta (Chindah & Braide, 2000). Agriculture is however the major economic activity in the Niger Delta region. The Federal Office of Statistics (F.O.S, 1995) stated that crop farming and fishing account for about 90% of all forms of activities in the areas. However, the level of agricultural production in the Niger Delta is somewhat low given the abundant resource endowment. In the 1960s, Nigeria relied heavily on the agricultural sector for economic development, contributing over 70% of the Gross Domestic Product (GDP). Nevertheless, with the oil boom of the 1970s, the contribution of agricultural sector fell drastically to the extent that the nation became an importer of fish for instance.
Fish production makes immense contribution to agricultural development as recognized in Bada (2005); Bene and Heck (2005). In terms of Gross Domestic product (GDP), the fishery sub-sector has recorded the fastest growth rate in agriculture. The contribution of the fishery sub-sector to GDP at 2001 factor cost rose from N76.76 billion to N162.61 billion in 2005 (CBN 2006).Fish is an important source of protein to a large number of fishing households in Nigeria. It is consumed in a variety of forms, including smoked, dried, fried or steamed. Fish provides 40-50% of the dietary intake of animal protein of the average household in Nigeria (FDF, 2007). According to Adekoya and Miller (2004), fish and fish products constitute more than 60% of the total protein intake in adults especially in rural areas of Nigeria. Amiengheme (2005) enumerated the importance of fish in households Nutrition as follows.
- Fish has a nutrient profile superior to all terrestrial meats (beef, pork and chicken, etc) being an excellent source of high quality animal protein and highly digestible energy;
- Fish is a good source of sulphur and essential amino acids such as lysine, leucine, valine and arginine. It is therefore suitable for supplementing diets of high carbohydrates contents,
- Fish is also a good source of thiamine as well as an extremely rich source of omega-3polyunsaturated fatty acids, fat soluble vitamins (A, D and E) and water soluble vitamins (B complex) and minerals (calcium, phosphorus, iron, iodine and selenium);
- It has a high content of polyunsaturated (Omega III) fatty acids, which are important in lowering blood cholesterol level and high blood pressure. It is able to mitigate or alleviate platelet (cholesterol) aggregation and various arteriosclerosis conditions in adult populations;
Nigerians are large consumers of fish with demand estimated at 1.4 million metric tonnes per annum. Moreover, the recent concern is that the demand is out- stripping the supply as explained in Kapadia (2002). The annual state of economic report by sector published by Central Bank of Nigeria shows that, Nigeria imports over US$ 200 million worth of frozen fish per annum to offset the gap in the domestic demand in the country (CBN, 2006). Food and Agricultural Organization (FAO) categorized fishing types as artisanal fishing, aquaculture and industrial fishing (FAO, 2004). It is worthy of note that the artisanal fishing households supply the greatest percentage of Nigeria’s annual fish output as shown in Table 1.1. The table shows that the relative contribution of artisanal households to domestic fish production ranged between 83.0% in 1985 to 81.7% in 2007 with an annual average of 86.1% (FDF, 2007).
Table 1.1: Domestic fish production in Nigeria by sectors (metric tonnes)
| Years | Artisanal | % | Aquaculture | % | Industrial | % | Total |
| 1985 | 201,383 | 83.0 | 15,000 | 6.2 | 26,142 | 10.8 | 242,525 |
| 1986 | 267,136 | 87.0 | 14,881 | 4.8 | 25,042 | 8.2 | 307,059 |
| 1987 | 248,987 | 86.1 | 15,221 | 5.3 | 24,900 | 8.6 | 289,108 |
| 1988 | 297,624 | 85.1 | 15,764 | 4.5 | 36,549 | 10.4 | 349,937 |
| 1989 | 303,500 | 83.7 | 25,607 | 7.1 | 33,645 | 9.3 | 362,752 |
| 1990 | 283,534 | 89.6 | 7,297 | 2.3 | 25,529 | 8.1 | 316,360 |
| 1991 | 291,286 | 84.8 | 15,840 | 4.6 | 36,226 | 10.6 | 343,352 |
| 1992 | 283,943 | 82.8 | 19,770 | 5.8 | 39,365 | 11.5 | 343,078 |
| 1993 | 201,176 | 78.7 | 18,703 | 7.3 | 35,644 | 13.9 | 255,523 |
| 1994 | 234,601 | 82.8 | 18,104 | 6.4 | 30,488 | 10.8 | 283,193 |
| 1995 | 320,955 | 86.5 | 16,619 | 4.5 | 33,479 | 9.0 | 371,053 |
| 1996 | 309,200 | 86.9 | 19,490 | 5.5 | 27,244 | 7.7 | 355,934 |
| 1997 | 360,220 | 87.2 | 25,201 | 6.1 | 27,703 | 6.7 | 413,124 |
| 1998 | 433,069 | 89.6 | 20,299 | 4.2 | 29,955 | 6.2 | 483,323 |
| 1999 | 426,786 | 89.0 | 21,578 | 4.5 | 31,139 | 6.5 | 479,503 |
| 2000 | 418,069 | 89.5 | 25,689 | 5.5 | 23,308 | 5.0 | 467,066 |
| 2001 | 433,537 | 89.1 | 24,414 | 5.0 | 28,378 | 5.8 | 486,329 |
| 2002 | 450,965 | 88.1 | 30,651 | 6.0 | 30,091 | 5.9 | 511,707 |
| 2003 | 439,317 | 88.8 | 26,493 | 5.4 | 29,154 | 5.9 | 494,964 |
| 2004
2005 2006 2007 |
451,760
513,537 513,537 504,227 |
88.9
85.2 81.3 81.7 |
27,247
56,355 84,533 85,087 |
5.4
9.7 13.3 13.8 |
29,003
32,595 33,778 28,193 |
5.7
5.6 5.3 4.3 |
508,010
602,482 631,848 617,507 |
| Total | 8,188,349 | 86.1 | 629,842 | 6.6 | 697,550 | 7.3 | 9,515,741 |
Source: Federal Department of Fisheries; Fisheries Statistics of Nigeria, various editions
According to Mathew (2001), “traditional”, “small-scale” or artisanal fisheries are used to characterize those fisheries that were mainly non-mechanised with low level of production. The fisheries sector is almost entirely dominated by small scale, poor fishing households who produce 95% of total marine catch in Nigeria (Mathew, 2001). In Nigeria, the coastal artisanal households use the traditional dug-out canoes or pirogue, ranging from 3-18 metres in length while the gears used include cast nets, handlines, basket traps, longlines, set gillnets and beach and purse seines. The operating range of small-scale fisheries is around the 20 metres depth contour, with operations extending occasionally to a maximum depth of 40 metres (Inoni & Oyaide, 2007). In artisanal fisheries, individual and household groups used labour intensive gears (Coates, 2000). For a long time, fishing has been regarded as one of the most important activities, which form the basis of livelihood of households living along the coast.
The household is normally made up of a father, his wife and children; leadership and responsibility for the wellbeing of the entire household is vested on the head of the family. Omonona (2000) defined artisanal household as a unit consisting of people eating from the same bowl and sharing the same catering services. Grosh and Munoz (1996) in their view defined the household as a group of people who share a roof and a cooking pot. In addition, Agbola, Ikpi and Kormawa (2004) defined a household as a group of individuals who contributed to, shared a common economic resource base, and relied on the income from that base for the greater part of their food acquisition and utilization. The artisanal household is a concept similar to the model of the peasant studies and economic history in Europe and Latin America. The artisanal household is perceived as a major decision making unit in fish production. In practice, the term artisanal fishing household is used interchangeably with the fishing family.
The capacity of artisanal fisheries to play its triple role of food supplier, employment provider and income earner for the artisanal households in the Niger Delta depends on the adoption of appropriate management strategies that will ensure their sustainability in the face of intensive oil exploitation activities. Fishing has substantial social and economic importance. It was estimated that 12.5 million households were employed in related fishing activities in Nigeria and value of fish traded internationally was estimated at US $ 40 billion per annum for the early 1990s. The total production from capture fisheries and aquaculture during the same period reached a total mass of 100 million tonnes in Nigeria (FAO, 1995). The Federal Department of Fisheries (FDF) (2007) reported that the bulk of fish supply in Nigeria comes from the artisanal fishing subsector. Recent accounts show that domestic demand for fish in Nigeria could not be met by dependence on artisanal fisheries, which experts say is fast depleting (Nwosu, Oguoma & Ohajianya 2007;Ojo & Fagbenro, 2004 ). Available statistics show that Nigeria’s inland water bodies are producing less than 13% of their estimated fishery potential (Sule ,Ogunwale & Atala 2002).These water bodies have been reported to have over 200 species of fish, 14 species of reptiles, 7 species of mammals, 59 species of amphibians and 72 species of water-associated birds (Ita, 1993). Inoni and Oyaide (2007) noted that fishing in African rivers, lakes and associated wetlands are usually haphazard. This may however not be unconnected with the oil exploitation activities by oil companies.
The environmental consequences of oil pollution on the artisanal households are enormous. Aghalino (1998) observed that the impacts of oil exploitation on the oil- producing communities are three fold: first, it leads to environmental pollution, second, it destroys the ecosystem and the ways of life of the households; and third, it further impoverishes the oil producing communities. Anderson, Nelf, Cox, Taken and Hightower (1974) reported cases of oil spillage in Sangana, Koluama, Akassa and Brass Communities in Bayelsa State, in which tremendous damage was done to fisheries in the wild. In Nigeria, in particular, the Niger Delta, problems related to oil spillage have caused severe financial losses and implication for economic development. The financial losses to oil spillage run into billions of dollars therefore affecting the economy of the nation (Adebowale, 1996). Government, aware of this discouraging trend, has since put in place various policies and programmes. These measures and programmes include, National Accelerated Food Production Programme (NAFPP), Fisheries Extension Programmes, Fishermen Co-operatives and Fish Exploitation Reforms. These policies and programmes were aimed at raising the productivity and the efficiency of artisanal fishing households.
However, Ite (2007) asserted that the emergence of a petroleum sector in the Nigerian economy has been of great benefit to the agricultural sector of the rural economy because of the agricultural developmental activities of oil companies operating in the country. For instance, Shell Petroleum Development Company as part of her commitment to the development of the host communities, ventures into agricultural support services with a sole mission of contributing to the sustainable development of these communities. This is because over 70 percent of the households are directly involved in artisanal fishing as their primary occupation. The various SPDC Agricultural Projects and services are aimed at helping fishing households improve their mode of operation and quality of life. The Shell community’s assistance programmes can be classified into agricultural practices, infrastructure, education, health services and vocational training. The Nigerian Agip Oil Company (NAOC) Ltd is also involved in farming and fishery projects in some of the rural areas covered under its concessions.
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 hand, when considered in respect of its negative impact on the socio-economic life of the fishing households and the environment of the immediate oil producing communities and its inhabitants, it has left a balance sheet of ecological and socio-physical disaster. This rightly provides a framework to analyze the effects of oil exploitation on the artisanal fishing households in the Niger Delta region.
1.2 Problem Statement
Fishing activities remain low, production costs remain unacceptably high, thus, adequate quantity and quality of fish cannot be afforded by many poor rural fishing households (Maduagwu, 2000). This situation is aggravated by losses that occur because of environmental problems such as oil spillage and gas flaring in the oil-producing region of Nigeria especially Delta and Bayelsa States. The exploitation activities have adversely affected the artisanal fishing households by reducing aquatic lives, economic, social and environmental benefits. Oil exploration and exploitation has at least over the last decade (2000-2010) influenced the socio-economic wellbeing of artisanal households and physical environment of the Niger Delta oil producing communities, threatening the subsistent economy and their entire livelihood (Babatunde, 2010). It is obvious that domestic demand for fish in Nigeria has never been met by dependence on output from available aquatic sources. Supply of fish from capture fisheries by artisanal household is decreasing due to oil spills. FAO (1995) maintained that the World fish catches appear to be leveling off below the estimated maximum sustainable yield of 100 million metric tonnes per annum. For example, it was projected that developing countries like Nigeria needed an additional 22.5 million metric tonnes of fish by the year 2000, which highlighted the need to increase fish production by artisanal households.
Although, the importance of fishing to households welfare in oil producing areas has often been raised in policy debates on coastal resources and oil spill management, little empirical evidence is available on the validity of such arguments (Sesabo & Tol, 2005). This implies that there is a need to understand the nature of artisanal fishing operations and fishing households’ level of technical and economic efficiency in the face of oil spills. This will enable policy makers develop efficient policies targeting coastal resources conservation and households’ welfare. It is pertinent to note also that when oil spills occur, they cover the surface of the water. This reduces oxygen exchange thereby causing death of fishes because the oil coats the gills of the fishes preventing them from inhaling oxygen. In addition, oil spills endangers fish hatcheries in coastal waters, contaminates commercially valuable fish and oil slicks prevent sunlight from reaching deeper levels of water where coral thrive, thus limiting food production of plants (photosynthesis). It also brings a setback to households whose main source of survival is fishing and consequently a decrease in their income earning capacity, exacerbating hunger and poverty on fishing households. This has also increased the spread of different types of diseases among the fishers and their household, which include conjunctivitis, cholera, dysentery etc (Okonta & Douglas, 2001; Edwin-wosu & Kinako, 2004). As intensive oil exploitation activities takes place, the issue of having enough artisanal households labour for fishing becomes a problem in the Niger Delta area of Nigeria as many rural dwellers now prefer working as temporary staff in oil related contracting firms around the villages instead of fishing. This has led to labour shortage, underemployment for many fishing operations and has resultantly caused fish shortage. The main challenge for the growth of artisanal fisheries is how to improve production performance while at the same time ensuring sustainable level of fisheries resources for artisanal fishing households. Therefore, measurement and analysis of artisanal fishing households’ performance become important.
In realization of the adverse effects of oil exploitation on agricultural productivity, the oil companies have embarked on agricultural development activities in areas covered under their concessions. For instance, Shell Petroleum Development Company (SPDC) and Nigeria Agip Oil Company (NAOC) Ltd are involved in infrastructure, education, health services, construction of road, provision of micro-credit, provision of materials and implements aimed at facilitating the development of agriculture within their concession areas. The aims of the oil companies are to: increase agricultural productivity, prevent further deterioration of the economic life of artisanal fishing households by equipping them with better fishing techniques, improve the incomes of fishing households, and make them more self-sufficient (Okpara, 2004). Despite the efforts of the oil companies and the Federal Government to improve sustainable fish production and living standards of households in the crude oil producing communities, fish productivity, output and income in these areas have tended to dwindle over the years. Finally, some studies have been conducted on oil exploitation in the crude oil producing riverine areas of Niger Delta. Gbigbi (2008) studied socio-economic implication of oil exploitation on farming communities in oil producing areas of Delta State. The result showed that crop farmers in the affected areas recorded comparatively lower output per hectare and lower earnings than their counterparts in those areas that were not polluted. Nwosu (2007) also studied economics of resource use by farmers in crude oil and non-crude oil producing communities of Imo State. The result showed that there were dissimilarities in age, education, farming experience and income level of food crop farmers, except in marital status. In addition, Inoni, Omotor and Adun (2006) investigated the effects of oil spillage on crop yield and farm income in Delta State. The result showed that oil spill reduced crop yield, land productivity and greatly depressed farm income. However, nothing has been documented for artisanal fishing enterprises, particularly with respect to their level of efficiency under intense oil exploitation. These studies centered on crop production with no attempt made at examining artisanal fishing households’ efficiency. Examining the efficiency of these households will help provide information on their level of performance under oil exploitation and equip policy makers with the necessary and empirical basis for intervention in their case. It is against this background that this research is being carried out. The relevant questions are: what are the socioeconomic characteristics of the fishing households? what are the artisanal fishing systems in the area? What is the fishing households’ level of technical and economic efficiency? What factors drive these indices? What is the effect of oil companies relief programmes on their income? What are the general constraints faced by these households in the course of fishing?
1.3 Objectives of the study
The broad objective of this study is to examine the effects of oil exploitation on the efficiency of artisanal fishing households in the Niger Delta region, Nigeria.
The specific objectives are to:
- describe the socioeconomic characteristics of artisanal fishing households;
- describe the artisanal fishing systems of artisanal fishing households;
- determine factors affecting technical and economic efficiencies of artisanal fishing households;
- estimate the technical and economic efficiencies of artisanal fishing households;
- describe from the perception of the respondents, the general effects (environmental, social and economic) of oil exploitation on the households;
- determine the effects of relief programmes on household income and the socioeconomic characteristics of the household heads.
1.4 Research hypotheses
The following hypotheses were tested;
- Artisanal fishing households in the study area are technically efficient.
- Artisanal fishing households in the study area are economically efficient.
1.5 Justification of the study
Nigeria is endowed with abundant natural and human resources and weather, which support agricultural production throughout the year. Despite the availability of these resources, the artisanal fishing households are plagued with problem of low fish output and productivity (Abowei, Akankali, Tawari & George 2008). To turn the situation around, there is need to step-up the rate of fish production by improving the living conditions of the artisanal households and encouraging the fertility of artisanal fishing and water environment. The prevailing situation in the communities of Delta and Bayelsa States as major oil producing communities whereby the subsistent peasant economy and the environment are being threatened as well as the entire livelihood by oil spillage can neither guarantee increased productivity of fish catch nor better living condition for artisanal fishing households. This situation, which makes fishing households of oil producing communities impoverished, has often resulted in violent conflicts between the affected communities and oil companies.
This study will provide up-to-date information that will guide artisanal households in crude oil producing communities in decision-making and the governments in formulating appropriate policies towards the solution of fishing problems in the Niger Delta region. The study will present a guide for future studies on oil exploitation and artisanal households’ vis-à-vis environmental sustainability and protection and a baseline document that can be updated from time to time. It will equally provide a suitable basis upon which future comparative studies can be undertaken. Besides, the results of the study will arm the NDDC to formulate environmentally compatible strategies to increase fish production and productivity of artisanal households.
1.6 Limitations
A key limitation was inadequate finance. Again, high cost of transportation and speed boat availability was generally problematic. The distance to travel from one community to another was a serious constraint since they were far from each other. Some trained enumerators were employed to solve the problem. There was observed apathy and general indifference of the respondents to questionnaire and interview in terms of objectivity and sincerity. Hence, a lot of persuasion was used to obtain as much of these information as possible. However, these limitations did not in any way impair the reliability of the findings and could therefore be taken to represent the true situation in the study area.
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