ECONOMEC ASPECW (3F PEASANT RUBBER PRODUCING” EN MIDWESTERN M’SERIA Thesis for 3519 Degree of Ph. D. MECHIGAN STATE UNIVERSETY V Kurt R. Ansche! 196.5. {mags Hill!!!" 1293 10 "MUN" Will!!! H WWW LIBRARY, Michigan State University This is to certify that the thesis entitled Economic Aspects of Peasant: Rubber Production in Midwestern Nigeria presented by Kurt: R. Anschel has been accepted towards fulfillment of the requirements for Ph, D, degree inmlnmphy Major professor Date August: 17, 1965 0-169 C. ‘\ N& J . .5. u. s G v v... up... 3. s . . so .. ABSTRACT ECONOMIC ASPECTS OF PEASANT RUBBER PRODUCTION IN MIDNESTERN NIGERIA by Kurt RiiAnschel Production of rubber, the primary industry of Midwastern Nigeria, utilizesabout 10 percent of the Region's land and labor resources. Smallholders who grow most of the rubber produced in Nigeria own an average of ten fragmented acres planted with unselected seedlings. Itinerant laborers whose main interest is maximizing their. own short- run gains tap the rubber." The marketing system discourages production of high quality rubber by paying farmers a uniformtprice regardless of quality. The result is low volume production of the lowest quality rubber. ' The rubber industry is now faced with a declining market for rubber. Because of competition with synthetics many experts predict a continued decline of rubber prices until the Malaysian price of high quality sheets is approximately 18 cents per pound, about 5 cents less than current prices. The objectives of this study are: (l) to provide a description of the techniques of Nigerian rubber production, (2) to determine the rela- tive profitability of the various organizations now extant, (3) to evaluate the impact of falling world market prices on the profitability of ordinary smallholdings as they are now organized, (4) to evaluate the profitability of farms'planting high yielding trees under alternative price and cost assumptions and (5) to suggest methods for implementing change in the rubber industry. ‘1 WI... he. Kurt R. Anschel - 2 Surveys of 111 smallholders in 19 villages in six divisions of Mid- western Nigeria were conducted to determine technology, resources avail- ablity and farm.organization. A subsample of 18 farms were surveyed to determine actual inputs and production of rubber. Budgets of these farms . were then constructed assuming alternative rubber prices and factor costs. Inladdition, 30 smallholders who planted clonal seedlings purchased from the Ministry of Agriculture and Natural Resources were surveyed and bud- gets assuming alternative yields, costs and prices were then constructed. It was found that all existing organizations of rubber production at l96h prices and costs provide only slightly more than a £2 per acre income to the farmer. The most profitable organization, the production of sheets processed in privately-Owned factories and smokehouses, yields owners who hire tappers £3 to £5 per annum per acre, and the production of ordinary lump and low quality sheets provides incomes of t2/15/- and fiB/lhl- respectively. When rubber prices are decreased 20 percent and domestically produced input prices increased 20 percent, the incomes generated by private procesSing fall to £1 to £3 per acre and incomes from ordinary lump and R.S.S. VI production fall to El/lO/- and fil/lZ/- respectively. At 196h prices and costs, smallholder rubber production provides approximately the same earnings as smallholder oil palm produc- tion, but if rubber prices fall 20 percent and costs increase 20 percent, palm production will be more profitable. Production of rubber from trees purchased from the Ministry of Agriculture and Natural Resources yielding 800 pounds per acre provides and income of over £20 per acre currently and will provide £10 even if prices fall 20 percent and costs increase 20 percent. At 1964 prices I 1" Ms Kurt R. Anschel - 3 and costs, mature rubber yielding 800 pounds or more provides returns to the economy and owner equal to or greater than oil palms producing 9,000 pounds of bunches. But if rubber prices fall 20 percent and costs in- crease 20 percent, yields of 1,000 pounds of rubber must be achieved to exceed the returns from oil palm. It is recommended.to the Government of Midwestern Nigeria that its rubber planting program.insure yields of 1,000.pounds by continuing farmer supervision and training after planting. Further, it is suggested that the Gavernment undertake.a thorough investigation of the alternative organizations of rubber processing so that when the highqyielding trees are tapped, the most effective organization can be utilized. Finally, in order to encourage production of higher quality lumps and sheets, it is recommended that the Government deveIOp grades for lumps and initiate grading of all rubber produced in the Region. EOONOMIC.ASPECTS 0F PEASANT RUBBER PRODUCTION IN MIDWESTERN NIGERIA by ("h 1 Kurt R: Anschel A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of mCTOR OF PHILOSOPHY Department of Agricultural Economics 1965 Q. a : ACKNOWLEDGMENTS I wish to express my sincerest appreciation and gratitude to Dr. Glenn L. Johnson for his untiring assistance throughout this study and to Dr. Vernon L. Sorenson for his advice and counsel throughout my graduate studies. Much appreciation is also due to It» Iawrence W} Witt, Er. James Hendry and Dr. Dale E. Hathaway for reviewing and criticizing the manuscript. I am grateful to Dr. Carl K. Eicher and the other staff members of the Economic Development Institute of the University of Nigeria for their criticisms and suggestions throughout the study's formulation and data collection. Thanks are extended to Mr. Tom Mulder, former Rubber Development Officer of the Midwestern Nigeria Ministry of Agriculture and Natural Resources and Mr. Ihvid Robertson, U. S. Agency for International DevelOpment Advisor to the Mfidwestern Nigeria Rubber Experiment Station for teaching me the rudiments of rubber cultivation and advising and helping me throughout my year in Nigeria. I wish to acknowlege with appreciation the unfailing efforts of Mr. Mathew Nwabueze and Mr. Cyprian O. Muojindu during the arduous task of data collection. I am also grate- ful to the Ministry of Agriculture and Natural Resources and the U. 3. Agency for International Development and their staffs for making their resources available to me and thus enabling me to carry out the field work and for advising and helping me on many occasions. I am indebted to Dr. Lawrence L. Boger and the Department of Agri- cultural Economics and Dean Glen L. Taggart and the International Programs Office for making the funds available for my graduate training and my ii research in Nigeria. ' Finally, my thanks are extended to my fellow graduate students, Mr. William L. Miller and Mr. Delano E. Welsch, for their friendship, encouragement and advice during my research in Nigeria. And I cannot fully express my gratitude to my wife, Sally Anschel for her encourage- ment, patience, understanding and help through six years of graduate traininge iii TABLE OF CONTENTS AcmmmmTS O O O C C O O O O O O O HST 0F TABLE 0 O O O O O O O O O O 0 LIST OF.APPENDIXES . . . . . . . . . . Chapter I. II. INTRODUCTION . . . . . . . . The Problem Situation . Importance of the Rubber Importance of the Rubber Nigeria 0 O O O O O O O O O O O 0 Problems of Nigerian Rubber Production ObJQCtivea e e e e e e e Justification . . . . . Previous Research . . . THE'HORII’RUBBER MARKET . . . Current Trends . . . . . Production of Rubber . . United States Production RubborPr1CQSeeeeeeeoeee Industry to Industry to O O O 0 Nigeria . . Midwestern and Consumption . . . . The Supply of Natural Rubber . . . . . . . The Supply Function Prices of Rubber and Stock 0 O O O O 0 Price Fluctuations Mature Acreage . . Age Composition . Clonal Composition The Demand Function . . Incomeeeeeee Price of Synthetics Synthetic Rubber Capacity 8. eeeee'zje O O C O O O O O t r O O O O O O O O O O O O O O 0 Rubber Manufacturers' Technology and The Future Market for Natural Rubber Implications for the Nigerian Rubber iv of Production Preferences Indus try 0 Page ii 39 Chapter III. OIL PALM AND FOOD: ALTERNATIVE CROPS TO RUBBER . . . . . . FOOd Crops e e e o o e o o e e e e e 011 P‘ In e e e e e e e e e e o e e 0 3m .. e e e e e e e e e e e e e e IV. THE 141me NIGERIA RUBBER INDUSTRY . The Development of the Industry . . The Early Years: 189h=l921 . . Period of Stagnation: 1921-1935 The Modern Rubber Industry: 1936 to the Present The Organization of the Nigerian Rubber Industry . . . Nigerian Rubber Plantations . Nigerian Rubber Smallholdings mddleman.......... malarSeeeeeeeeeee Processor-Exporters . . . . . O O O O O O O O O 0 O O O O O O O O 0 O O O O 0 O O O O O O O O O O O O O O O 0 Government Programs to Improve the Smallholder ‘ Indus try 0 O O O O O O O O O O O O O O O O O O O 0 Rubber Improvement Campaign, l957~6u . . . . . . Rubber Rehabilitation Scheme and WOrld Bank RubborPrOjeCt,196u’ eeeeeooooeee Smry. O O 0 O O 0 O O O O O O O O O 0 O O C O V. mmmIOGI FOR DATA COLLECTION ON PEASANT SMALLHOLDINGS. . Samplosalafitioneoeeeeeeooeeoeoeeee General Survey . . . InputoOutput Survey . . . . 0 Population Size . . . . . . . . . . Interviewers . . . . . . . . . . . . General Survey . . . . . . . . InputaOutput Survey . . . . . mta @116 ction O O O O O O 0 0 O 0 General Survey . . . . . . . . Input=0utput Survey . . . . . Page 68 68 70 7O 7O 73 75 75 75 76 76 76 77 Chapter VI. SHALLHOLDER RUBBER PRODUCTION IN MIDWESTERN NIGERIA . . . The Agricultural Economy . . land and Land Tenure . Agricultural Labor . . capital 0 O O O C C . Tree Crops Grown in Midwestern Nigeria 0 O O O C O O O O O O 0 Rubber Establishment Prictices in Midwestern Nigeria Clearing and Planting Maintenance . . . . . Physical Inputs Required for Land . . . . . . . . . Labor . . . . . . . . Meals . . e . . . . . TOOlSeeeccceo Tapping and Processing . . . Tapping . . . . . Processing . . . . Yields..oo.. Tapping Equipment Chemicals . . o . O O 0 O O O O 0 O 0 Conclusions . . . . . . . . Establishing Rubber . . O 0 O O O O O O O O O O O O O O O O 0 O O O 0 O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O VII; BUDGETARY ANAHSIS OF ORDINARY SMALLHOLDINGS . . . . . . Budgeting as a Tool of Analysis . . . . . . . . . . JDefinition of Budgeting Budget Assumptions . . O O O O O O O O O O O O The Applications of Budgeting . . . . . . . . The Budgeting Process . . . Budget Descriptions . Assumptions Common to All Budgets . . Assumptions of the Individual Budgets Budget Computations . Subsistence Income . . Taxes and Foreign Exchange Earnings . Page 100 101 101 102 105 107 110 111 Chapter VII. Continued Mgot Results 0 O O O 0 0 O O O O O O O 0 Ordinary Lump . . . . . . Sun-Dried Sheet Production . . . . . Cooperative PTOCOSSing e c e e c e 0 Private Processing . . . . . . . . . Clean Lum Production . . . . . . . . Improved Tapping e e e e e e c e e 0 Conclusions . . . . . . . . . . . . . . . Current Prices and Costs . . . . . . . . . . . . Prices Decreased 20 Percent and Costs increased 20 Percent . . . . . . . . . . . Tax Revenues and Foreign Exchange . VIII. SURVE!.AND BUDGETS OF IMPROVED SMALLHOLDINGS . Introduction . . . . . . . . . . . . . . . Data Collection . . . . . . o . . ._. . . Sample SGIGCtion e c o o c e e e e 0 sample Size 9 v 0 O O O O O O O O O O Interviewer Background and Training Interfi ews O O O O O O O O O O O O 0 Survey Findings . . . . . . . . . . . . . Labor and Meals . . . . . . . . . . Budgetary Analysis . . . . . . . . . . . . Budget Descriptions and Asssumptions meet Results 0 O O O I O 0 O O O O O O O 0 O 0 Improved Smallholdings Yielding 1,000 Pounds Improved Smallholdings Yielding 800 Pounds . Improved Smallholdings Yielding 600 Pounds Cooperative PTOCOSSing e e e c c e e e e e COnCIuSions e e e c e e e e e e e e e e e e o 0 11:. CONCLUSIONS AND RECOMIENDATIONS . . . . . . . . . . . Conclusions . . . . . . . . . . . . . . . . . . vii OOO‘O-O.‘ Page 116 120 129 131 131 131 .133 13“ 136 136 136 136 138 139 lhO IUD 140 1h3 1h3 IN? IN? lh9 153 155 159 161 161 Chapter Page IX. Continued Ordinary Smallholdings . . . . . . . . . . . . . 161 Improved Smallholdings . . . . . . . . . . . . . 165 Recommendations .A. . . . . . . . . . . . . . . . . . 169 Rubber RehabilitAtion 83119315 0 c c e e e e e e e 170 Nucleus and Government Plantations . . . . . . . 172 Tapping and Processing Rehabilitated Small- holdings O O O O O O C O O O O O O O O O C O 172 met Whty e e c e c e e e e c e e e e e e 176 Sumry O O O O O O O O O O O 0 O O 0 O O O O O O O O 178 mnn O O O O O O O O 0 O O O O O O O O O O 0 O O O O O O O O O O 181 BIBuumO.looooooecccooccccoeccececc 280 viii Table 10 13 1h 15 16 LIST OF TABLES Mbnthly Average Value of Principal Nigerian Agricultural mp0rts,1955-19620eeeceeeeeceeececcc .Enployment in the Nigerian Rubber Industry, 1963-64 . . . . . Estimate of Employment in the Rubber Industry in Midwestern Nigerh.1963‘&eeeeeecccceceeceeccc Production of Rubber in Nigeria by Region, 1962=63 . . . . . Production of Synthetic and Natural Rubber, Non-Communist Nations and U.S.A., 1939, 1951 and 1953 . . . . . . . . Unweighted Average of Annual Prices of R.S.S. No. 1 on the New York Market by Decade, 1900-1963 . . . . . . . . . . High and Low Spot Price of R.S.S. I and High and Low Annual Average Spot Price for R.S.S. I on the New York Market during each Decade since 1920 . . . . . . . . . . . . . Estimated Acreage of Rubber in the World for Selected Years . Projections of WOrld Production of Natural Rubber, 1966, 1967, 196 9 . 1980 O O O O O O O O O O O O O O O I O 0 O O O O O Projections of Consumption of Rubber in the Non-Communist - Nations, l965“67, 1969“70, 1980 e c c o c c e e e c e 0 Synthetic Rubber Capacity, Production and Utilization, Non- Communist Nations 1955, 1959, 1962, 1963 . . . . . . . . Projections of Synthetic Rubber Capacity in Non-Communist nations 0 O O O O O O O 0 O O O O O O O O O O C O O O 0 Owners Returns from Production of Oil Palm from Wild Trees: Altormtive Prices, COStS and Yields 0 e e e c c e e c 0 Owners Returns from Improved Oil Palm Production: Alternative Prices and wage Rates . . . . . . . . . . . . . . . . . Nigerian Rubber Exports by Grade, 1958-1963 . . . . . . . . . Three Classes of Exports as a Percent of Total Exports, Nigeria,1958-1963eeeeeeeeccooeeeceee ix 15 17 22 2h 27 30 33 33 “5 53 55 Table Page 17 P1antation.Rubber Production, Nigeria, 1958 and 1963 . . . . 55 18 Location, Ownership and Acreage, Nigerian Rubber Plantations, 1963-ateeeeeeeeeeeeeeeeeeeeeeee 57 19 Area and Production of Rubber Plantations, Smallholders and FCrn Settlements, 1962.63 e e e e e e e e e e e e e e e 60 20 Smallholder Rubber in Midwestern Nigeria by'Ldvision, 1958- 59 O O O O O O 0 O O O O O O O O O O O O O O O O O O O 61 21 Area Replanted with Seedlings Sold by the western Nigeria and Midwestern Nigeria Ministry of Agriculture and Natural Resources, Midwestern Nigeria, 1958-64 . . . . 67 22 Villages in the General Survey, Midwestern Nigeria, 1963- 19 O O C C O I O O O O O O O O O O 0 O O O O O O O O O 72 23 Success in Locating Respondents for the General Survey, Midwestern Nigeria, 1963-196“ e e e e e e e e e e e e e 73 24 Location, Product and Estimated Acreage of Farmers in the Input-Output Survey, Midwestern Nigeria, 1964 . . . . . 74 25 Hired hily Labor and Wage Rates, General Survey, Mid- western Nigeria, 1963-1964. . . . . . . . . . . . . . . 81 26 Average Number of Free Farm Laborers, Midwestern Nigeria, 1963-196Ll'eeeeeeeeeeeeeeeeeeeeeee 82 2? Timing of 1963 Rubber Establishment Operations, Input- Output Survey, Midwestern Nigeria, 1964 . . . . . . . . 84 28 Rubber Planting Distances Utilized by Farmers Planting in Rows, General Survey, Midwestern Nigeria, 1963- 1'98+ . . C C . O C O C o O O C O O O C O C C C O C C C O 86 29 Actual Densities of Immature Farms, InputuOutput Survey, Midwestern Nigeria, 1964 . . . . . . . . . . . . . . . 86 30 Average Labor Requirements for Establishing Rubber, In- putpOutput Survey, Midwestern Nigeria, 1964 . . . . . . 90 31 Meals Served Laborers by Operation, Input-Output Survey, Midwestern Nigeria, 1964. . . . . . . . . . . . . . . . 91 32 Number, Unit Costs, Annual Cost of Tools and Expected Life per Item, InputaOutput Survey, Midwestern Nigeria, 1 O O O O O O O O O O O O O O O 0 O O O O O O O O O O 92 Table Page 33 Estimated TappinguLife, Input-Output Survey, Midwestern N18 aria ’ 19 O O O O O O O O O I O O O O O O O O O O O O 0 g‘ 34 Estimated Yields of DnyIRubber Per Annum, Input-Output Survey, Midwestern Nigeria, 1964 . . . . . . . . . . . . . 96 35 Average Tapping Equipment Requirements and Costs per Farm, Input-Output Survey, Midwestern Nigeria, 1964. . . . 97 36 Average Chemical Costs Per Acre, Input-Output Survey, MRduestern Nigeria, 1964 . . . . . . . . . . . . . . . . . 97 37 Costs per Acre Included in the Budgets of Five Ordinary Smallholder Organizations, Midwestern Nigeria, 1964. . . . 103 38 Revenue from Ordinary Lump Production: Alternative Prices, Costs and Planting Methods for Selected Years, Midwestern Nigeria, 1964 . . . . . . . . . . . . . . . . . 113 39 Lfiscounted Net Revenues and Discounted Rate of Return from ' Ordinary Smallholdings: Alternative Products,Costs, Prices and Planting Methods, Midwestern Nigeria, 1964. . . 114 40 Government Revenue and Foreign Exchange Per Acre of Mature Ordinary Smallholdings, Midwestern Nigeria, 1964 . . . . . 115 41 Revenue from Sun-Dried Sheet Production: Alternative Prices, Costs and Planting Methods for Selected Years, Midwestern Nigeria, 1964° . . . . . . . . . . . . . 117 42 Revenue from High Quality Sheet Production Processed COOperatively: Alternative Prices, Costs and Planting Methods for Selected Years, Midwestern Nigeria, 1964 . . . 119 43 Revenues from High Quality Privately Processed Sheet Pro- duction on a FiveuAcre Smallholding: Alternative Prices, Costs, Planting Methods and Processing Plants for Selected Years, Midwestern Nigeria, 1964 . . . . . . . . . 122 44 Revenues from High Quality Privately Processed Sheet Production on a TenaAcre Smallholding: Alternative Prices, Costs, Planting Methods and Processing Plants « for Selected Years, Midwestern Nigeria, 1964 . . . . . . . 124 45 Revenues from High Quality Privately Processed Sheet Production on a 20-Acre Smallholding: Alternative Prices, Costs, Planting Methods and Processing Plants for Selected Years, Midwestern Nigeria, 1964. . . . 127 xi Table 46 4? 48 49. 50 51 52 53 55 56 Revenues from Clean Lump Production: Alternative Prices, Costs and Planting Methods for Selected Years, Mid- w.8t°rn N18.ria, 196+ O O O O O O O O O O O O O O O O O O 0 Increase of Discounted Net Revenue from.Improved Tapping Techniques: Alternative Products, Costs and Prices, MidwesternNigeria,1964................. Number of Improved Farmers Interviewed and Number of Obser- vations, Improved Smallholders Survey, Midwestern. Nigeria . 198‘ O O O O O O O O O O O O O O O 0 O O O O O O 0 Cost and Quantity of Labor and.Mbals per Acre, by Establish- ment Operation, Improved Smallholdings, Midwestern ”18°ri‘ . 198* C O C O O O O O O O O O O 0 O O O O O O O O 0 Establishment Costs, Discounted by 7 Percent to Year of Planting, Improved Smallholders, Midwestern Nigeria, 1964. Revenues from.an Improved Smallholding Yielding 1,000 Pounds Per Acre: Alternative Acreages, Prices, Costs and Processing Plants for Selected Years, Midwestern N18 oria ’ 196+ . O O O O O C O O O O O O O O O O O O O O O 0 Discounted Net Revenue and Discounted Rate of Return from Improved Smallholdings Producing 1,000 Pounds Per Acre: Alternative Costs, Prices and Processing Plants, MidwesternNigeria,1964................. Foreign Exchange Earnings and Tax Revenues from Mature Improved Smallholdings: Alternative Yields and Prices, Mfldwestern Nigeria, 1964 . . . . . . . . . . . . . . . . . Revenue from Improved Smallholdings Yielding 800 Pounds Per Acre: Alternative Acreages, Prices, Costs and Processing Plants for Selected Years, Midwestern Nigeria, 1964. . . . . . . . . . . . . . . . . . . . . . . Discounted Net Revenue Per Acre and Discounted Rate of Returns from Improved Smallholdings Producing 800 Pbunds Per Acre: Alternative Acreages, Costs, Prices and Processing Plants, Midwestern Nigeria, 1964. . . . . . Revenues from Improved Smallholdings Yielding 600 Pounds Per Acre: Alternative Acreages, Prices, Costs and Processing Plants for Selected Years, Midwestern Nigeria , 196+ O O O O O O O O G O O O O O O 0 O O O O O O O xii Page 130 132 139 142 144 148 150 151 152 154 255 was Table Page 57 Discounted Net Revenues and Discounted Rate of Returns from Improved Smallholdings Producing 600_Pounds Per Acre: Alternative Acreages, Prices, Costs and Processing Plants, Midwestern Nigeria, 1964. . . . . . . 156 58 Revenues from Improved Smallholdings Processing Coopera- tively: Alternative Yields, Prices and Costs for Selected Years, Midwestern Nigeria, 1964 . . . . . . . . 157 59 Discounted Net Revenues and Discounted Rate of Returns from Improved Smallholdings Processing Cocperatively: Alternative Yields, Prices and Costs, Midwestern ' Nigari" 198‘ O O O O O O O O O O I O O O O O O O O O O O 158 60 Foreign Exchange Earnings, Taxes, Returns to Owners and wages from Ordinary Smallholder Production of Rubber and Palm: Alternative Prices and Costs, Midwestern Nigeria, 1964. . . . . . . . . . . . . . . . . . . . . . 162 61 Foreign EXchange Earnings, Taxes, Returns to Owners and wages from Improved Smallholders Production of Rubber and Palm: Alternative Prices and Costs, Midwestern Nigeria ’ 19a; 0 O O O O O O O O O O O O O O O O 0 O O O O 16* xiii LIST OF APPENDIXES Page An Introduction to Rubber Production . . . . . . . . 182 Exports of Nigerian Rubber 1893-1963 , . . . . . . . 201 Questionnaires . . . . . . . . . . . . . . . . . . . 205 Nigerian Rubber Output in world Production . . . . . 233 Additional Survey Results. . . . . . . . . . . . . . 235 Ordinary Smallholder Budgets . . . . . . . . . . . . 242 Improved Smallhoder Budgets . . . . . . . . . . . . 268 xiv CHAPTER ONE INTRODUCTION Nigeria, like other newer nations, hopes to improve its economy by more fully utilizing its agricultural resources. At present, rubber ranks with the most important of these resources, with production accounting for approximately one percent of Nigeria’s Gross Domestic Product, one percent of Federal Government revenues and, most significantly, seven percent of export sales. Although the industry has grown rapidly since 1936, future progress is jeopardized. Costly, primitive production methods and decreasing prices in the world markets may combine to undercut these economic contributions. little can be done to temper the external threat: rather, production improvements must be found. This thesis will suggest several improvements and methods for implementing these improvements. Four major areas will be considered: decreasing world market rubber prices, the techniques of Nigerian rubber production, the economy of rubber production and the before mentioned suggestions for improvement. Because most of the rubber is produced in Midwestern Nigeria, the dis- cussion will pertain mainly to this region. Before proceeding to this main discussion, however, it is important to discuss in some detail the problem situation -- the importance of rubber to Nigeria's economy and the threats to the future of Nigeria's rubber industry -- to pre- sent in more detail the objectives and justification of this work and to briefly recount previous pertinent studies of rubber production in Nigeria. The Problem Situation Importance of the Rubber Industry to Nigeria The rubber industry contributes significantly to Nigeria's foreign exchange earnings, tax revenues, income and employment. Since 1962, when it comprised seven percent of merchandise exports, rubber has been Nigeria's fifth most important export. Rubber exports have doubled since 1955, making rubber Nigeria fastest growing agricultural export. (See Table 1.) Table 1: Monthly Average Valge of Principal Nigerian Agricultural Exports, 1955-1962. All Ground- Phln Film Year Echorts Rubber Cocoa nuts Kernels 011 Thousands 1955 3 10,818 E "'65 t 2,182 3 1,928 g 1,600 3 1,096 1956 11,022 534 1,999 2,31“ 1,703 1,239 1957 10,3“8 585 2,170 1,678 1,097 1,150 1958 11,066 636 2,222 2,246 1,70“ 1,055 1959 13,375 967 3,191 2,293 2,160 1,1“6 1960 13,802 1,187 3,064 1,906 2,172 1,165 1961 11+.172 219 2,812 2,686 1,657 1,102 1962 13,668 9M6 2,779 2,702 1,u07 7h“ Source: Federation of Nigeria, Federal Office of Statistics, Digest of Statistics, Vol. III, No. h (October 1963), p. 12. 1Petroleumis fourth in importance. 2! 5.: ’3' Vi 3 Moreover the rubber industry, taxed for £1,275,000 in 1963, an important source of Federal Government revenues.1 These funds, collected by a ten percent ad valorem duty, constitute over ten per- cent of all export duties and about one percent of Federal Government revenues from.a11 sources. In addition, the regions collect a farthing per pound sales tax. Because no estimates are available, it is necessary to estimate the rubber industry's contribution to Nigerian gross domestic product. Gross domestic product is the sum of personal consumption, domestic investment, government purchases and net foreign balance. The rubber industry primarily affects net foreign balance. If ten percent of the value of rubber exports is deducted to offset imported capital equip- ment, profits transferred out of the country by foreign-owned firms and personal income exported by foreign nationals working in Nigeria, the industry's contribution is about $10,000,000. In 1963 gross domestic product was £1,125,000,000, hence, the rubber industry adds about one percent of the total G.D.P.2 Obviously the rubber industry provides substantial employment opportunities. But, because no published estimates exist, employment must be estimated by examining data available. The Industrial Directory 196k catagorizes 50 rubber processors, plantations and manufacturers according to number of employees: 50-99, 100-199, 200499, 500-999, 1Federation of Ni eria, Federal Office of Statistics, e t o §tg§igtigg, XII, No. 4 fiOctober 1963), p. 12 2"Report on the Nigerian Economy,“ Economic Development Institute, University of Nigeria, Enugu, March 18, 196h, p. l. (Mimeographed.) 1+ 1,000-1,999, 2,000 and ever.3 Assuming each firm hires the middle number of its category and those in the highest category hire 2,500 employees, about 10,000 are employed by the 50 firms. Smallholders own 900,000 to 1,500,000 acres of rubber in holdings averaging ten.acres, hence, there must be 90,000 to 150,000 smallholders in the Midwest. Assuming each tapper can tap three acres and they tap between 225,000 and 375,000 acres, then 75,000 to 125,000 workers must tap rubber. If another 5,000 to 15,000 workers help market, then 180,000 to 300,000 workers earn their incomes in the rubber industry. Table 2 summarizes the above computations. If 60 percent of the total population of Nigeria is of working age, then the rubber industry employs Table 2: Employment in the Nigerian Rubber Industry, 1963 ‘6‘ e Egptngggt Low High Subsector Estimate Estimate Plantations, Processing and Manufacturing 10,000 10,000 Farming 90,000 150,000 Tapping 75,000 125,000 Marketing 5,000 15,000 Total 180,000 300,000 from.five-tenths to nine-tenths of one percent of the working age 3Federation of Nigeria, Federal Ministry of Commerce and Industry, Ingggtzta; Dirggtozx l26h, Iagos, p. 16. '11 population. Importance of the Rubber Industry to Midwestern Nigeria With the exception of a few plantations and rubber manufacturing plants, Nigeria's entire rubber industry is located in the Midwest Regions“ Midwestern Nigeria exports annually rubber valued at approxi- mately £9,000,000, over 80 percent of all Nigerian rubber exports, and approximately one half of the region's exports.5 In addition to pro- viding the Regional Government with about. £100,000 annually through a farthing per pound sales tax, the industry employs from 12 to 20 percent of the region's 1,500,000 residents of working age. Table 3 shows that between 178,000 and 298,000 people are employed in the Midwest's rubber industry. Table 3: Estimate of Employment in the Rubber Industry of Midwestern Nigeria, 1963-60. Emnlgyment Low High subsector Estimate Estimate Plantations , Processing and Manufacturing 8,000 8,000 Firming 90,000 150,000 Tapping 75,000 125,000 Marketing 5,000 15,000 Total 178,000 298,000 14. A region is analogous to a state in the United States. 5"mdwestern Nigeria," New York Times, January 20, 1961+, p. 63. The importance of the Edwast to the rubber industry is indicated in hbl’ he Table #. Producti n of Rubber in Nigeria by Region, 1962-63.g Proportion of Region Production Total, Lanes. 1222.223 Midwest 115,820,000 91 Nest 3.300.000 3 East 7,708,000 6 Total 126,836,000 100 Source: lMulder, unpublished paper prepared as background for the Nigerian representative to the International Rubber Study Group, May, 1960. 1There are only a few rubber trees in Northern Nigeria. Problems of Nigerian Rubber Production The Nigerian rubber industry is dominated by peasant smallholders who own 95 percent of the rubber growing in the country.6 0f the country's 1962-63 exports of 127,000,000 pounds, peasant smallholders produced 86 percent.7 But this production is far below the country's potential. IOM'yielding planting materials, poor planting technique, infrequent maintenance and destructive tapping result in low production per acre, and poor marketing organization results in low quality 5A.1Mulder, Unpublished paper prepared as background for the Nigerian representative to the International Rubber Study Group, Mhy, 196“. 7mm. of the rubber produced. The smallholder usually plants unselected seedlings volunteering in mature farms. The 400 pounds per acre average yield of these un- selected seedlings compares unfavorably with the 1,000 to 3,000 pounds average yield of selected seedlings. Planting techniques delay and reduce production. Typically, after completing the sowing of food crops, the peasant goes to an old rubber farm, pulls two or three years old volunteer seedlings and transplants them to his food crop farms. To plant a seedling, a sharpened stick is pushed into the ground, the seedling is placed in the holeamd the earth is pressed around it. To assure that a suffi- cient number of trees survive to maturity, 500 seedlings or more are planted to the acre. Because of the high density and crude method of planting, maturity is significantly delayed and yields are permanently reduced. Poor maintenance further reduces yields. Maturity is delayed by allowing the trees to grow choked by weeds. Usually farmers weed their rubber once a year or less and allow weeds completely to cover the seedlings. Plantations tap five or six years after planting, but the typical smallholder seldom taps before the eighth year and usually not before the tenth. Poor tapping is the most important cause of low productivity of peasant smallholding. Nigerian tappers have little conception of how to treat the tree to obtain the maximum lifetime output. Instead, they attempt to extract as much rubber from the trees as possible currently without concern for future productivity. They often tap a tree in several places and usually out too deeply, thus, ruining the tree's long term potential. Because of these practices, the life- time output of the trees is reduced to a half or a third. Poor organisation of marketing contributes to the low quality of the Nigerian product. Smallholders sell their rubber to middlemen, who in turn sell it to dealers who sell it to exporters for processing and packing. All sales except to exporters are by gross weight only, without deductions for moisture, dirt, sand or stones. Because sales are by weight, no attempt is made to grade the rubber. Therefore, smallholders are not motivated to incur expense to improve the quality of their products. On the contrary, because rubber adulterated with dirt, stones and sticks weighs more, most smallholders producing lumps purposefully adulterate them. Sheets cannot be seriously adulterated, but, without price motivation, the producer has no reason to produce a high quality sheet. A. 3. Cook of the Nigerian Federal Institute of Industrial Research estimates that Nigerian exports could be at least 100,000 tons, approximately 40,000 tons greater than 1963 exports given the land area planted to rubber.8 Moreover, 56 percent of current exports is low quality crepe. If yields and product quality are improved, the value of rubber exports would be increased by £8,000,000. Declining Rubber Prices The most significant problem.facing the Nigerian rubber industry 8A. 3. Cook, Rubber Ecodueuog and migration in Niggzia, Technical Memorandum No. l Iagos: Federal Ministry of Commerce and Industry, December 1962), p. h. is the declining world market price of rubber. Relatively cheap syn- thetic rubber is increasingly substituted for natural rubber. Since Hbrld War II, the physical characteristics of the synthetics have gradually improved so that today, they are almost perfect substitutes for natural rubber. Only one major use of rubber remains in which nat- ural rubber is the superior ingredient, heavy duty tires.9 Most authorities now agree that the price of rubber will fall to between 15 and 20 cents (0.8.) per pound. L. C. Bateman, Director of Research for the Natural Rubber Producers Association, argues that the rubber industry must be prepared to sell its rubber at 18 cents.10 Some observers believe that the falling price of rubber may eliminate the Nigerian rubber industry. Because smallholders are high cost producers, they will not be able to compete. This is the rationale of the Rubber Improvement Campaign initiated by the western Nigeria Ministry of Agriculture and Natural Resources in 1957. Introduction of the announcement of the campaign to the field staff states: The future level of management of Nigerian rubber plantations and the handling and processing of the latex will need to conform to a very high standard because of the high-level of efficiency which is being attained both in the plantation and small holding industries in come peting countries. The world market for rubber is at present an expanding one but in view of the large acreages now being planted in all the rubber producing countries of the world, it must be expected that in the not too distant future, there will be competition for markets and inefficient 9Tropical Products Institute, The Rubber Trade (Iondon: Trapical Products Institute, January 1963). P. 11. 10Tropical Products Institute, loc, cit., p. 15. 10 producers will either have to drop out or be satisfied with lower return per unit of effort and hence a lower standard of living than their competitors.11 The writer of the introduction perceived the danger of falling prices to Nigerian smallholders: elimination or lower incomes. Objectives This study is conducted in the context of a declining world market for rubber and inefficient use of existing resources in the Nigerian rubber industry. The Midwestern Nigeria Ministry of Agricul- ture and Natural Resources has recently redesigned its program to help the region's farmers to adjust to the changing market and to utilize their resources more effectively. To provide the continuing leadership that is so essential at this juncture in the development of the country and region, the Ministry will reappraise and redesign its programs as further experience is gained with them. The purpose of this study is to provide some of the information necessary for such a step. Specifically the objectives are: (l) to provide a description of the techniques of peasant rubber production, (2) to determine the rela- tive profitability of the various organizations now extant, (3) to evaluate the impact of falling world market prices on the profitability of peasant smallholdings as they are now organized, (u) to evaluate the profitability of farms planting high yieldiné trees under alternative price and cost assumptions and (5) to suggestnmfiho;z Jr'igy1;renthy;chmtn in the rubber producing industry. . llWestern Nigeria Ministry of Agriculture and Natural Resources, "Rubber Improvement Campaign," Benin Circle File No. 5806, Ogba Farm, Benin City, p. l. ll Justification To determine policy and construct programs for the improvement of the rubber industry, it is necessary to know how the industry func- tions. Government planners must predict their program's impacts. But they cannot predict accurately unless they understand the economic, social and political structure of the industry. The fulfillment of objective (1) will, in part, satisfy the needs of the policy makers for understanding the industry. Objective (2) provides for determining the profitability of the three most important productive organizations:lump production, sundried sheet production and cooperative processing. The purpose for doing so is two-fold. First, it is essential to know if a primary reason for the partial failure of the government's program to establish process- ing cooperatives is their relative unprofitability. The failure of many cooperatives has usually been blamed on causes other than the most obvious one, that farmers can make more money by producing lump or sundried sheet rather than high quality sheet. If the Ministry is to design effective policy, it must know the relative profitability of cOOperative processing. Second, it is commonly thought that lump producers are being cheated by the processors, that the price they are being paid is inferior to the one they would receive producing sundried sheet. It is a hypothesis of this study that lump production is more profitable than low quality sheet production and that a program to force farmers to produce sheets rather than lumps W111 decrease farm.incomes. 12 The Nigerian rubber industry's most critical problem is the im- pact of prospective lower prices. To determine whether the industry as it is presently organised can survive, the study investigates the profitability of the present productive organisations under low price and high cost assumptions. The most commonly suggested solution to the problem caused by the declining market for rubber is the introduction of highqyielding trees. A major determinate of whether such a programwwill.successfully solve the problem is the profitability of producing rubber with high- yielding trees. Finally, methods for implementing changes in the industry are suggested based on the empirical results of the study. Previous Research Nine studies and reports of the Nigerian rubber industry exist of‘which eight are descriptive.12 The descriptive reports are general 12The eight descriptive reports are: C. G. Ackhurst, Rgpggt_tg_ 122 Government 0; Nigeria on Natural Rubber Production, Etap Report No. 52 Rome: Food and Agricultural Organization of the united Nations, August 1962); Peter von Blanckenburg, ”Rubber Farming in Benin Area,” Nigerian Institute of Social and Economic Research, University of Ibadan, Ibadan, N.D. (Mimeographed.); C. N. Brookson, J. E. Morris, and Nong Mun Yun, Re art on Rubber Research in the Federation of Ni eria and in the Qggeroong (Kuala Lumpur: Rubber Research Institute of Malaya, A t 1961): 'Caoutchouc au.Nigeria (Ie),” RevugiGenerale de Caoutchouc, XXV February 1958), pp. 138-03; A. 8. Cook, Rubber Production and Utilisation in Ni ria Technical Memorandum No. 16 (Iagos: Federal Ministry of Commerce and In- dustry, December 1962); E. O. Ojurongbe, ”Rubber Rehabilitation and Tapping Technique,” Ibadan, (December 1963), (Mimeographed.); H. A. Oluwasanmi, 'Notes on Peasant Rubber Production in Nigeria,” Ibadan, 1962 (Mimeographed.) and H..A. Oluwasanmi, "Rubber Production and Marketing in Nigeria: A Pro- liminary Survey,“ Ibadan, 1962 (Mimeographed.); The only empirical study of the industry is A. 5. Cook and J. B. Downes, Preliminagy figpgrt cg Rgtber Ergdggttqg Cogts t2 Nigeria (Lagos: Federal.Nfinistry of Commerce and In- dustry, December 19 2 . 13 studies of the industry's structure, government programs and production and processing techniques. Very little detail is provided. Often the data that does exist come from untrustworthy sources and conflict with other existing information. The two most important works are by Brook- son, Morris and Wong Mun fun of the Rubber Research Institute of Malaya and by von Blanckenburg of UNESCD. Brookson, Morris and Wong Mun Yun visited Nigeria in 1960 to evaluate the need for a rubber research station. Their report contains the most complete description of the industry available. Included is a general description and discussion of the technical problem of pro- ducing rubber. Peter von Blanckenburg conducted a socio-economic study of rubber farmers in three villages near Benin City. This study had the dual objectives of investigating the relationship between location and change and describing the rubber growing economy. His conclusions are (l) cultural values depreciate farming, (2) the tenure system encourages uneconomic planting of rubber, (3) the share tapping system causes waste of rubber, (N) the marketing system does not encourage high production and (5) there is a need to improve the extension service.13 The ninth study, by Cook and Downes, analyzes costs-profit relation- ships in the various subsectors of the industry. They collected data 1L3Peter von Blanckenburg, ”Rubber Farming in Benin Area,‘I Nigerian Institute for Social and Economic Research, University of Ibadan, Ibadan, N.D., pp. 36-39. 10 in February and March of 1960 from 15 dealers, exporters, government employees and plantation managers. The data are unreliable and be- cause they are aggregated in large categories, unusable. CHAPTER II THE WORLD RUBBER MARKET Current Trends Production of Rubber The most striking trend in the world rubber market is the in- creasing production and consumption of synthetic rubber. In 1939, natural rubber was virtually a unique material, but only six years later, synthetic rubber was produced in large quantities. As shown .in Thble 5, this production increased steadily through the 1950's and-early 1960's: production in non-communist countries increased from 25,000 tons in 1939, to 908,000 tons in 1953 to 2,025,000 tons in 1963. Table 5: Production of Synthetic and Natural Rubber, Non-Communist Nations and U.S.A., 1939, 1951 and 1963. l ' Synthetic Year Natural in U.S.A. All Synthetic Thousand Tons .......... a----s-- 1939 1,005 .3 25 1951 1.885 805.2 908 1963 2,050 1,608.0 2,425 Source: Commodity Research Bureau, Inc., ngppdit~ Year Book 1251 (New York: Commodity Research Bureau, Inc., 1901), p. 465. Commodity Research Bureau, Inc., Commodit Year Book 1 0 (New York: Commodity Research Bureau, Inc., 1950 , p. 23 . Commodity Research Bureau, Inc., Commodity Year Book 1960 (New York: Commodity Research Bureau, Inc., 1960), p. 276: Enrico Ferraris, "SBR," Materie Plastiche Ed Elastomeri, XXIX (1963), p. 1012. 15 16 Although natural rubber production also increased during this period, it was surpassed by the increase of synthetic rubber produc- tion. Between 1939 and 1963, natural rubber production increased 100 percent while synthetic rubber production increased nearly one hundred fold. More significant, because of the comparison between two already established industries, are the 1951 to 1963 rates of growth: only 9 percent for natural rubber compared with 169 percent for synthetic rubber. By 1963, 50 percent of all rubber produced.was synthetic, comp pared with 33 percent in 1951 and 7 percent in 1939. United States Production and Consumption Nowhere was this increase more striking than in the United States, the world's largest consumer of rubber and producer of synthetic rubber.1 From.negligible amounts prior to world war II, U. S. production of syn- thetic reached 805,200 tons in 1951. About 93 percent of all synthetic rubber produced in the non-communist nations in 1951 was produced in the U. S. From 1951 to 1963, U. S. production of synthetic rubber grew _ 190 percent to 1,608,000 tons. -During this same period, the proportion of natural rubber in total U. 8. rubber consumption fell from 38 percent to 26 percent.2 In 1963, the rest of the world consumed 63 percent natural rubber. Many experts believe that the U. 5. pattern will become 1Kurt Maier, ”Die Synthesekautschuk - Kapasitaten der welt,” Kautgghpg BEE Qgggt Kumststoffe, XVII (May 1960), pp. 287e290. 2 Commodity Research Bureau, Inc., Commodit Year Book 1 64 (New York: Commodity Research Bureau, Inc., 1965;, p. 277. 17 world wide. Rubber Prices Despite the tremendous increase in the production of rubber, the prices in the 1950's were higher than in any decade since the 1920's. (See Table 6.) Table 6: Unweighted Average of Annual Prices of R.S.S. No. 1 on the New York Market by Decade, 1900-1963. Average Price Decade per Pound U,S. ants 1900-09 109.8 1910-19 s 93.6 1920-29 32.75 1930-39 12.09 1 who-1+9 21.452 (19. 92) 1950-59 28.73 Computed from: Commodity Research Bureau, Inc., Commodity Year Book 19h0 (New York: Commodity Research Bureau, Inc., 19QOX, p. #72. Charles F. Phillips, Jr., Competition in the Synthetic Rubber Industry (Chapel Hill: The University of North Carolina Press, 1961), p. 258. Commodity Research Bureau, Inc., Commodit Year Book 1 6“ (New York: Commodity Research Bureau, Inc., 19%55, p. 279. 1Average omitting l9hlahé when price was fixed by the govenment at 22.50 cents. 2 Omits l951.when all sales were to the U.S. Government after March 31. These higher prices resulted from a .60 percent increase in 18 consumption during the decade.3 Since the combined production of natural and synthetic rubber did not exceed this higher consumption, prices were high. But synthetics absorbed most of the demand in- creases, thus, preventing further price rises for natural rubber. Since mid-1960 the price of natural rubber has steadily de- clined, the first period in history of falling rubber prices during an industrial expansion. The average spot price in New York was 38.5 cents in 1960 and 26.3 cents in 1963.“ Because price continues to fall'while industrial output increases, it appears that the demand for natural rubber is not increasing as rapidly as it did during the 1950's. The Supply of Natural Rubber The Supply Function The supply function of natural rubber on the world market is summarized by the equation: s-rP,M,M,M,o,P,w,I,... 1 n ( N A P C F ) ( ) ‘where Sn 3 quantity of natural rubber, PN price of natural rubber, MA 8 nature acreage of natural rubber, Mp ' age composition of the mature acreage, MC = clonal composition of the mature acreage, O = 3Commodity Research Bureau, Inc., Commodit§ Year Book 1263 (New York: Commodity Research Bureau, Inc., 19 3 , p. 27h “Commodity Research Bureau, Inc., Commodity Year Book 1264, 221211.. P- 279- 19 price of products using the same factors, PF = price of factors in rubber production, U = weather and I = stock of rubber.5 Because acreage, age and clonal composition of mature rubber are not subject to rapid change, the supply of rubber is very inelastic. A resource is fixed when the marginal value product of that resource is less than the cost of acquiring another unit and greater than the amount received by selling a unit.6 Prices of Rubber and.Eactors of Production At any given time, the stock of living trees is fixed; trees are both difficult to acquire and unprofitable to sell in any market except rubber. It takes five to seven years to grow a tappable rubber tree: as far as the total rubber industry is concerned, rubber trees cannot be acquired in any other way, or within a shorter time. Firewood is the next best use for the rubber trees. The price of rubber must fall considerably before the marginal value product of a tree is below its salvage value as firewood. 5The classical work on the economy of the rubber industry is P. T. Bauer, The Rubber Ind t (London: The London School of Economics and Political Science, l9h8 . The best available recent discussion of the rubber economy is Clifton R. Wharton, Jr., "Rubber Supply Condi- tions: Some Policy Implications,” he Po t cal E c c o e t ed. T. H. Silcock and E. K. Fisk, Canberra: The Australian National university, 1963), pp. 121-162. 6This study utilises Glenn L. Johnson's ”fixed asset theory" to explain changes in resource use. 20 But the fixity of trees does not imply that all other inputs are fixed. Land and trees clearly are nearly perfect complements, but la- bor and processing facilities are less than perfect complements of land or trees. It would be very unusual for insufficient processing facilities to limit increases in production because capacity can be increased in a few months. Also, plantations have sufficient unused processing capac- ity to accommodate any increases in production. On the other hand, ca- pacity cannot be reduced easily because processing facilities are pri- marily buildings and equipment which can only be sold as scrap. The price of rubber would have to fall to very low levels before the mar- ginal value product of processing facilities would be less than scrap value. The extent of labOr use could vary when the price of rubber changes. The acquisition cost and salvage value of labor are nearly equal, beu cause it costs little to expand or decrease the labor force in the rub: ber industry. Labor use could be altered by changing the frequency of tapping, periodicity of tapping,or the length and number of tapping cuts. Empirical supply response studies indicate that plantations do not alter resource use when prices change, but that smallholders do. Wharton, utilising estimates computed by Chan, states that while the price elaSa ticity of supply from plantations does not differ significantly from zero, the price elasticity of supply from smallholders varies between +0.13 and +0.37, differing significantly from zero.7 Plantations do not alter tapping procedures in response to price changes; they only increase .‘ 7Wharton, op, cit.. Pp. 105-106. 21 or decrease rates of planting. Although the smallholders' supply response is also rather inelastic, they do alter the intensity of resource utilization in response to price changes. When prices changq,smallholders adjust the intensity of tapping by altering the number of trees in tapping and the length of time each tree is tapped. Stock The supply of natural rubber is also a function of the stocks of rubber held in the producing countries by producers, traders and processors. The volume of stocks depends on the frequency of sales; when prices are high, the stocks are depleted. And in succeeding periods, sales will be lower because of smaller stocks. When prices are low, larger stocks are maintained in hopes of a price increase. Because rubber deteriorates with time, sales must be increased above normal levels after any period of holding. Horowitz tests the impor- tance of stocks in determining supply by fitting a supply function in which the exogeneous variables are the prices in the last two quarters. He finds an insignificant coefficient for the last quarter, but a sig- nificant and negative coefficient for price during the quarter before the last.8 Horowitz also finds that the supply in the New York market is significantly price inelastic (+0.46)? In view of the much lower producers' price response reported by Wharton, fluctuation probably results from behavior in the market involving variations of stocks. 8Ira Horowitz, “An Econometric Analysis of Supply and Demand in the Synthetic Rubber Industry,” International Economic Rewiew IV (September 1963). p. 333. 991.91.. p. 331:. 22 Price Fluctuations Because the supply of natural rubber is price inelastic, prices formerly fluctuated wildly when demand shifted. (Table.7 shows the high and low spot price on the New York market experienced each de- cede since 1920.) The advent of synthetic rubber dampened price fluctu- ations. Table 7: High and low Spot Price for R.S.S. I and Righ and low Annual Average Spot Price for R.S.S. I on the New York Market During Each Decade Since 1920. W .__lhilL__ Decade Price Price per Pound Year Price per Pound Year Cents (0.3.) Cents (0. s.) pg; popgg pgr;pound 1920 High 121 1925 72.06 1925 Low 11 1/2 1921 16.36 1921 1930 High 26 7/8 1937 19.39 1937 Low 2 1/2 1932 3.1+9 1932 19101 Hi h 25 1907.48 22.50 1913.06 105 15 7/8 1909 17.57 1919 19502 High 86 1950 111.10 1950 Low 18 1950 23.61 1951» 19603 Righ 06 1960 38. 50 1960 Low 23 1963 26.30 1963 Source: Charles F. Phillips, Jr., Competitign in the Synthetic (Chapel Hill: The University of North Carolina Press, 1 l , p. 2 . 1The U. S. Government fixed the price at 22.5 cents on August 6, 1991. Free trading resumed May 1, l9”?. 2Free trading suspended from March 31, 1951 to July 1, 1952. Government price ranged from 52-66 cents. 31960 to 1963 only. 23 During the 1920's, the highest recorded price differed 110 cents from the lowest recorded price. Excluding the high prices of the Korean Whr period, the difference between the highest and lowest prices of the 1950's was 34 cents. For several reasons, the price.now fluctup ates less. Most important is the response of synthetic rubber pro- ducers to changes in.demand. When demand increases, the synthetic producers expand output, absorbing the increased demand in greater sales rather than higher prices. Because the synthetic industry is cligopclistic, individual producers find it difficult to revise their prices. During Hag,l956,.GoodrichnGulf increased its price of Styrene- Butadiene Rubber (SBR), but was forced to retract the increase when the other firms maintained the former price.10 When one company de- creases its price, the others follow, so that no firm can win customers from its competitors through price reductions. lowering the price only moves the whole industry downward on its demand function. Since Ubrld Uhr II, the quoted price of SBR has changed only three times: it has been 23 cents since the early 1950's.11 Mature Acreage Three variables have been assumed fixed in the above discussion, Bi, Mp, and MC. These variables are fixed in periods of less than five to seven.years, the time it takes to grow a mature tree. To simplify loCharles I". Phillips, Jr., Cc t t o the s t ti Industry (Chapel Hill: The University of North Carolina Press, 1 .1, p. 182. ' 11.12111. 24 the following.discussion of the fixed variables, it will be assumed that all variables other than the one under discussion are constant. Table 8: Estimated Acreage of Rubber in the world for Selected Years. ' 1937-39 Average . 1960 . 1962 Thousand acges ”9197311 3.332 3.500 “.572 Indonesia 4,687 21,0 53 0,469 Thailand 339 1,004 1,400 Ceylon 608 669 674 Viet Nam 3191 178 260 Nigeria , --2 -~~2 2882 Congo (Leopoldville) 21 230 --- Cambodia 319 93 1232 Other 67"" 1 9 173 n- Total 9,980 11,300 11,786 Sources: Commonwealth Economic Committee, Plantatio Cro 3 (London: The Commonwealth Economic Committee, 19635, p. 149; Inter- nationa1.Rubber Study Group, Prospects for Rubbe; and a Programme for Action: International Commodity Problems Geneva: United Nations Con- ference on Trade and Development, 19 , p. 9. 1Includes all of the former French IndowChina. 2N0 estimate included. Mature acreage (MA) is the most important determinant of long run production. At any given time the acreage planted more than five to seven years ago will be the current mature acreage. The amount of acreage planted is primarily a function of three variables: rubber prices, prices of products competing for the same resources and acreage available for planting. Unfortunately, acreage statistics are poor 25 throughout the world. Usually plantation acreage is known, but in- formation about smallholdings is unreliable. As can be seen in Table 8, the International Rubber Study Group estimates that there were 11,786,000 acres of rubber in the world in 1962. The Commonwealth Economic Committee estimates that in 1960 there were 11,300,000 acres in the principal producing countries. The best available evidence indicates that the area under rubber has increased only slightly in the last 30 years. The estimated 1937-39.average acreage is 9,980,000 acres, only 800,000 acres less than the estimated acreage in 1962. Acreage is expected to be stable in the near future. Age Composition Changes in the age of mature acreage (Mp) can significantly alter output. When a tree is first tapped, its yield is only about 1/4 of maximum. Output per tree reaches a peak in the sixth or seventh year after tapping begins and stays at that level until the eleventh or twelfth year, when renewed bark is first tapped. Not much is known about the age composition of the world population of rubber trees, but Cyriax estimates that about 40 percent of all trees are over 30 years old.12 Because of low prices, werld War II and pessi- mistic market pro;e:tions, little planting took place between 1930 and 1950. Since 1950, replanting with high-yielding clones has been exten- sive. About 725,000 acres were replanted in Malaysia during the 1950's.13 12George Cyriax, "The Next Steps for Rubber," Rubber World, CL (June 1964), p. 42. 13001 Jin-Bee, "The Rubber Industry of the Federation of Malaya," The Journal of Trogical Geoggaphy, XV (1961), p. 63. 26 Replanting has continued at a rapid rate in the 1960’s. During the last few years, the other major producing countries have also initiated re- planting prOgrams. As the new trees become mature, the average age of the mature acreage will fall significantly, resulting in increased output. Clonal Composition Clonal composition (MC) determines the potential yield per acre of currently mature acreage. Unselected seedlings yield between 200 and 500 pounds per acre.lu Predwar high yielding materials produce 450 pounds per acre the first year of tapping, reach 1,200 pounds in the seventh year and slowly decline to 1,000 pounds after the tenth year.15 Modern materials yield about 500 pounds the first year, 1,500 pounds the seventh and then slowly decline.16 Because of replanting,the clonal composition of Far Eastern rubber is changing rapidly. In 1950, Malaysian holdings contained 1,300,000 acres of old seedling materials and about 400,000 17 By 1959, only about 800,000 acres of pro-war high yielding materials. acres of old seedling materials remained.18 In 1970,Ehlaysia will contain 200,000 acres of unselected seedlings, 200,000 acres of pre-war high yielding materials and 1,200,000 acres of post-war materials.19 Al- though Malaysia has replanted the most, other countries have also initiated pregrams. l1+"Eiditorial: Malayan Rubber Production 1960-1970," Planter Bulle- —T)‘E_' 1+4 a t t 0 Ma a, LIII (March 19 l , p. . 27 Table 9 contains estimates of future production increases re- sulting from changes in the age and composition of mature acreage. If 'these increases actually occur, they will be the largest since world war II. George Cyriax projects a 2.5 percent increase per annum from 1963 to 1967 compared to an average annual increase of 0.75 percent from 1951 to 1963. The International Rubber Study Group projects pro- duction of 2,865,000 tons in 1969, a phenomenal 33 percent increase over the 1963 level. Compared to other sources, You's prediction seems conservative. Table 9: Projections of world Production of Natural Rubber, 1966, 1967, 1969, 1980. Year Production Source of Estimate Thousand Tons 1966 2,350 Cyriax 1967 2,000 Cyriax 1969 2,725 IRSG 1980 2,865 You Sources: George Cyriax, "The Next Steps for Rubber," Rubber world, CL (June 1964), p. 40. "International Rubber Study Group," Rubber werld, CL (July 1964), p. 62. Man He You, "A Study of the Natural Rubber Tndustry with Special Emphasis on its Future Prospects" (Unpublished Ph.D. dissertation, Dept. of Economics, University of Oregon, 1963), p. 150. The Demand Function The demand for natural rubber (DN) is a function of income (Y), price of substitutes (PS), preferences and technologies employed by rubber manufacturers (T) and the price of natural rubber (PN). This relationship may be written: 28 D= h(Y, PS, T, PN ...) (2) Income The demand for raw rubber is a derived demand, derived from the demand for consumer products containing rubber. The demand for these products is, in turn, related to the income of the final con- sumer. As income increases, consumption increases. The level of income does not, however, determine the distribution of demand be- tween natural and synthetic rubber, but determines some aggregate demand for both. The other variables in equation (2) influence the distribution of demand between synthetic and natural rubber. The income elasticity of demand for rubber is high. Allen finds that the income elasticity varies from just under 1.0 in the U.S.A. to over 4.0 in Argentina.20 As might be expected, income elasticity varies inversely with income. Figure 1 summarizes Allen's findings. The correlation coefficient between gross do- mestic product and consumption of rubber also measures the rela- tionship between income and demand for rubber. Nehmer estimates that between 1907 and 1957, the correlation coefficient was 0.96 for Wbstern Europe and 0.71 for the United Kingdom.21 He finds that the coefficient varied between 0.66 and 0.86 in the United States during four different time periods in this century.22 The correlation coefficient between rubber consumption and an 20P.W. Allen, ”Rubber in 1970," Rubber Journal, CXLVI (August 1964), p. 30. 21Wharton, op, cit., p. 136. 22Ibid. 29 Figure l: The Income Elasticity of Demand for Rubber as a Function of Income, Selected Counties, 1952e1962. a. Argentina b. India c. Spain d. Italy e. Japan x a f. Scandinavia g. Belgium h. Netherlands i. France j. Australia k. United Kingdom 1. Canada 111. Ue Se Ae n. Brazil 0. W} Germany 1000 2000— 3000 0 N P Per Head Source: P. W. Allen, "Rubber in 1970," Rubber Journal, CXLVI (August 1964), p. 30- index of industrial production is even higher. Nehmer finds that the coefficient varied between 0.82 and 0.98 except during the 30 depression years when it was 0.28.23 Man Re You reports a correlation of 0.98 between consumption of rubber and an index of industrial pro- duction in both the 0.8. and in Western Europe.24 Projections of demand for rubber based on changes of income are unreliable because it is very difficult to forecast changes in the growth rate. Wars, depressions and recessions significantly alter in- come levels and are unpredictable. Several projections of demand are summarized in Table 10. Cyriax, Allen and You estimate an average Table 10: Projections of Consumption of Rubber in the Non- Communist Nations, 1965-67, 1969-70, 1980. Year Consumption Source of Projections Thousand Tons 1965 4,870 Cyriax 1966 5,000 Cyriax 1967 5,100 Cyriax 1969 5,850 IRSG 1970 5,h50 Allen 1980 6,999 You Sources: George Cyriax, "The Next Steps for Rubber," Rubber Wbrld, CL (June 1964), p. 40. "International Rubber Study Group," Rubber World, CL (July 196h), p. 62. P.W. Allen, Rubber Journal, CXLVI (196“), p. 32. Man He You, "A Study of the Natural Rubber Industry with Special Emphasis on its Future Prospect," (Unpublished Ph.D. dissertation, Dept. of Economics, University 01 Oregon, 1963), p. 75. 231bid. quou Man He, "A Study of the Natural Rubber Industry with Special Emphasis in its Future Prospects," (Unpublished Ph.D. dissertation, Dept. of Economics, University of Oregon, 1963), p. 73. 31 increase of about three percent per annum.and the International Rubber Study Group estimates an increase of about five percent per annum 0 Price of Synthetics The price of synthetic rubber partially determines the distri- bution of demand between synthetic and natural rubber. Assuming a fixed quantity of natural rubber, a change in the price of synthetic rubber will alter the price of natural rubber. If the price of syn- thetic rubber falls, the demand for natural rubber also falls; if the price of synthetic rubber increases, the demand for natural rubber rises. The cost of producing synthetic rubber and the degree of com- petition in the industry primarily determine the price of synthetic rubber. Assuming some freedom of entry, reductions in cost will be translated into lower prices. The continuous entry of new firms into the industry provides ample evidence of relatively free entry. Cheaper inputs or changes in technology reduce costs. Phillips states that 25 the cost of inputs fell in the late 1950's. Technological improve- ments in production techniques also resulted in lower costs. The con- tinuous SBR plant introduced in 1957 exemplifies such an innovation.26 256harles F. Phillips, Jr., "Market Performance in the Synthetic Rubber Industry, " Joml of. Indugtrial Economgs, IX (April 1961), p. 137. 26011811» F. Phillips, Jr., "The Competitive Potential of Synthetic Rubber,” W XXXVI (November 1960), p. 327. 32 This improvement allowed production at a ton per man rate equal to that of a plant four or five times as large. As this innovation and other similar ones are ad0pted by the industry, costs per unit fall. Synthetic Rubber Capacity The expanding market for synthetic rubber has made investment in production facilities very attractive. As recently as 1955, pro- duction facilities in the non-communist nations were concentrated in three countries, the United States, Canada and West Germany. But by only nine years later, plants were operating or under construction in 20 countries: Western Germany, France, Italy, Netherlands, Belgium, Great Britain, Spain, India, Canada, Australia, the United States of American, Argentina, Brazil, Mexico, Venezuela, Israel, the United Arab Republic (Egypt), South Africa and Japan.27 From 1955 to 1959, following denationalization of the U.S. synthetic rubber industry, U.S. production capacity increased 7% percent, from 1.06 to 1.8U million tons while world capacity increased 111 percent from 1.16 to 2.h5 million tons. (See Table 11.) U. S. capacity increased only slightly from 1959 to 1964, but world capacity increased another 15 percent, to 2.83 million tons. Much of the increase has occurred in countries which cannot utilize the full productive capacity of the facilities. In most cases, producers attempt to export supplies which exceed domestic demand. The result has been a burgeoning pro- ductive capacity in excess of demand at current prices. Table 12 27Maier, 92, git. - .. Uh.‘ uku‘ 33 Table 11: Synthetic Rubber Capacity, Production and Utilization, Non-Communist Nations 1955, 1959, 1962, 1963. Utilization of Capacity Production Capacity All All All United Western Non-Communist Non-Communist Non-Communist Year States Canada Europe Countries Countries Countries mum Ems. 1955 1.06 0010 --- 1.16 1.09 94' 1959 1.7# 0.10 0.3N 2.35 1.63 73 1962 1.85 0.16 0.16 2.52 2.24 89 1963 1.85 0.20 0.59 2.83 2.“3 86 Sources: Charles F. Phillips, Com etition in the S thetic Rubber Industry (Chapel Hill: The University of North Carolina Press, 1961;, pp. 3, 64, 69, 70. Charles F. Phillips, Competitive Potential of Syn- thetic Rubber, land Economics XXXVI (November 1960), pp. 323-326. George eriax, "The Next Steps for Rubber," Rubber werld, CL (June 196“), p. 41. Table 12. Projections of Synthetic Rubber Capacity in Non-Communist Nations. Year Capacity Source of Prediction Million Tong 196“ 3.10 Cyriax 1965 3.46 Cyriax 1969 3.85 IRSG Sources: Geor e Cyriax, "The Next Steps for Rubber," Rubber nglg, CL (June 1960 , p. #0. "The International Rubber Study Group," 33292; 'World, CL (July 1960), p. 62. contains several estimates of future capacity. When capacity exceeds demand, prices will fall because each producer tries to maintain the level of his output. 3“ During the last few years, the fraction of productive capacity actually utilized has fallen slightly. In 1955, the industry Operated at 9“ percent of capacity, in 1963 at 86 percent of capacity. During the same period, costs fell significantly, and prices fell as a result. Although basic price quotations have remained unchanged for most synthetic rubbers, quantity discounts increased, reducing the real price. If costs are lowered more in the future and capacity continues to outstrip demand at current prices, the price of synthetic rubber will continue to fall. Rubber Manufacturers' Technology and Preferences The last variable of equation (2) to be discussed is T, technology and preferences of the rubber manufacturers. Synthetic rubber has several advantages over natural rubber which are not likely to be overcome. Among them.are stable prices, uniform quality, integration of producer and user and proximity to the buyer. The price of synthetic rubber is very stable because the industy is oligopolistic, making it difficult for the individ- ual producer to change his price. Synthetic rubber is graded according to technical specification, whereas natural rubber grades are based on visual properties. Because trees rather than machines produce natural rubber, the natural rubber producer cannot fully control the exact com- position of the product. Vertically integrated firms produce a large share of synthetic rubber; they would not shift to natural rubber unless its price fell to the variable cost of producing synthetic. In 1958, 56.7 percent of all SBR sales were between associated firms.28 Phillips 281.1032.- . p. 321* 35 estimates that the variable cost of sea in 1955 was 17.75 cents.29 Finally; the manufacturer who uses synthetic rubber lessens the possi- bility of interruptions in the supply of his input. Natural rubber is produced far from its points of consumption and distance increases the danger of interruptions in delivery because of international crises, strikes, wars, etc. Shifts in the demand for natural rubber have resulted from.changes in technology and manufacturers' preferences. hbst importantly the quality of the new synthetics has improved remarkably. When SBRuwas first introduced, it was so inferior to natural rubber that it could only be used as an extender. Today SBR is superior to natural rubber in wear, cracking and aging resistance, and is inferior in only one major property, heat build-up.3° The last decade has seen the advent of new synthetics which are far superior to any of the older ones. Tires made from.stereo rubbers, polyisOprene and polybutadiene (introduced in the late 1950's), are equal to tires of natural rubber in all but one pr0perty, chip resistance. In 196“, Goodrich announced development of a new synthetic rubber which 31 If it proves possible is superior to natural rubber in all properties. to produce this rubber commercially, the demand for natural rubber may be significantly diminished. In time, synthetic rubbers which surpass the 29Charles F, Phillips, Jr., "Market Performance....,' op. cit., p. 136. 0F. W. Hibbert, ”A Review of the World Trade in Rubber.“ ggogicai §sisnas. V (1963). p. 110. 31"Synthetic Tire mterial Deve10ped by Goodyear," W April 30, 196A. p. 55. 36 quality of natural rubber will probably be developed. In order to meet the competition, the natural rubber industry has been trying to improve natural rubber.32 In order to make the product more uniform and reduce costs new methods of processing have been developed. New formulas have been invented for compounding rubber. Producers are using new grading techniques which reflect the technical requirements of the buyers of raw rubber. All these improvements have been designed to increase the demand for natural rubber. The Future Market for Natural Rubber Any discussion of the future in rubber must consider both the short term and long term. The short term is the period during which the preferences of rubber buyers and users.and the technology of pro- duction,remain unchanged. long-term considerations must ircLude pre- ferences and technology. For obvious reasons, most writers have been content to deal with the short-term. Those who do speculate on the long-term generally agree that the price of rubber will continue to fall during the next few years, and that it will eventually stabilize near 20 cents per pound (R.S.S. I on the New York Market). The prediction that price will fall is based on estimates of natural rubber production and synthetic rubber capacity during the next few years. The International Rubber Study Group's pro- jection of demand for rubber in 1969 is 5,850,000 tons, but their 32Iain MacNaughton, "Natural Rubber Faces the Challenge," Rubber P1astics.A e, XLIII (1962), pp. ##7-hh8. 37 projection of natural rubber production plus synthetic rubber capa- city is 6,575,000 tons.33 Evan if all natural rubber clears the market and no excess synthetic rubber is produced, the synthetic rubber industry will Operate at 81 percent of capacity. Cyriax is even less optimistic. Combining natural rubber supply with synthetic rubber capacity, he predicts an excess of 9U0,000 tons in 1965.3“ On the other hand, the International Rubber Study Group believes the excess will be only 725,000 tons in 1969. Regardless of the projec- tion one prefers, it is clear that downward pressures on rubber prices will be felt during the next few years. One thing which is uncertain is the level of the new equilibrium price. The figure most commonly mentioned is 18 cents (U.S.) in Malaysia. Apparently the Blackman Advisory Committee in 1957 was the first to suggest this level. "...the industry should have as its future aim the profitable production of good quality natural rubber at not more than 60 [19.6 cents U.S.] and possibly 55 [18 cents U.S.] )."35 Leslie C. Bateman, a spokesman for Malayan cents a pound (f.o.b. the Malaysian natural rubber industry, suggested the same figure to the 1962 Symposium on the Future of Natural Rubber.36 The suggested 6 33"International Rubber Study Group," Rubber Wbrld. CL (July 196“) p. 2. 9 3“('2‘3'riax, op, cit., p. #0. 35Charles Gamba, S thetic Rubber and Mala a (Singapore: Donald Moore for Eastern Universities Press Ltd., 19595, p. 36. 36Hibbert, op. cit., p. 112. 38 natural rubber price is probably based on estimates of the minimum costs of SBR and polyisoprene. Since production costs are lower than 18 cents on estates utilizing high-yielding clones, rubber production will be profitable as long as this price prevails. Two commentators on the long-term market for natural rubber are not encouraging. T. R. McHale says: Over time, therefore, the competitive position of natural rubber and its synthetic counterparts will depend to a large extent on the movement of key factor costs unique to each rather than common to both. It is unlikely at this stage of agronomic and technolOgical develOpment, and at this stage of sunk costs, that either natural or synthetic will gain complete dominance over the other. At the same time, it is also unlikely that the world's natural rubber industry will remain unscathed by the emergence of a new area of competition, and its future is probably less 3 promising now than at any time in its history. 7 Horowitz is even less optimistic. Utilizing quantitative techniques, be analyzed the causes of the shift to synthetic rubber by American rubber product manufacturers. In his concluding paragraph Horowitz says: Even though natural rubber prices might stabilize and decline, rubber manufacturers will continue to turn to synthetic rubber. The stability that it offers together with the prospect that eventually it may surpass the natural product in the technical qualities that it offers means that competition on a price basis alone may not be sufficient to prevent decreases in demand in the American market for natural rubber. Stabilizing and reducing price may help, but the uncer- tainty surrounding the international political 37T. R. McHale, "The competition Between Synthetic and Natural Rubber,“ gnn Economic Review , VI (April 1961), pp. 30—31. 39 situation would seem to mean that the swing towards synthetic rubber is not a current phenomenon, but a long-run swing of great economic importance both here and aggoad 'which is not likely to be reversed. Implications for the Nigerian Rubber Industry . Obviously, the future of the world rubber market cannot be pre- dicted with absolute precision. Still, an informed guess can be made on the basis of observable facts, such as the cost of synthetic rub- bers, approximately 18 cents. The Nigerian prices would have to fall 22 percent in order to meet the projected price, that is, decrease 5 pence per pound, from 20 to 15 pence. If the actual producers of rubber (plantations and smallholders) absorb the 5 pence decline, the producer price of R.S.S. I will fall from the 196% price of 14 pence to 9 pence. Five pence would be a decline of 22 percent for the exporter, but for the producer this is a 36 percent drop. If the same price differential is maintained be- tween grades, the producer price of sunudried sheet would fall about #2 percent (from the 1964 price). Assuming that lump contains 30 percent dry rubber, a 5 percent decline in the price of dry rubber would convert to a 50 percent decline in lump prices. Alternatively, the full price decline may not be passed on to the producer, but shared equally by all handlers of the rubber, including the producer. In this case, the price of R.S.S. I would decline 22 percent. The F.A.O., to predict the income from Nigerian rubber production, utilizes two alternative f.o.b. prices of rubber, l8 and 15 pence 3aflorowitz, 92, git" p. 316. “0 (10 and 25 percent reductions from the 196“ price).39 In addition, the F. A. 0. assumes two producer prices for R.S.S. I, 12 and 10 pence.“0 This study assumes a more conservative decline, 10 percent and 20 percent less than 196“ prices. The three alternative prices of R.S.S. VI sheets budgeted are 10.75, 9.675 and 8.6 pence. The 196“ price of R.S.S. I is assumed to be 13.88 pence; the 196“ price reduced by 10 percent and 20 percent is 12.“9 and 11.10“ pence respectively. The 196“ producers' average price of lump approximates 2.? pence: this price, reduced 10 to 20 percent is 2.“3 and 2.16 pence. These prices are considerably higher than either those assumed by F. A. 0. or those prices which would result if the total decline was absorbed by the producers. 39Food and Agriculture Organization of the United Nations, A icultural DevelOpment in Nigeria 196“-l980 (Rome, January 196“), p. 3218. M’Ibid. CHAPTER III OIL PALM AND FOOD: ALTERNATIVE CROPS TO RUBBER Rubber is Midwestern Nigeria's main cash crop, but it is not the only crop. Oil palm is second in importance as a cash crop. Subsistence food crops are also of great importance. Other cash craps, cocoa, cotton and rice, are less important. The predominant pattern is food craps com-, bined with either oil palm or rubber production. This chapter will dis- cuss the possibility of substituting oil palm or commercial food produc- tion for rubber production. Food Craps No matter what other agricultural commodities they produce, almost all Midwestern farmers produce food. Most do not produce it commercially, but grow only enough for their own needs. When an excess occurs and is sold, it is not a major source of income. Most farmers who grow both rubber and food first plant the food crops and then interplant rubber between them. When rubber is planted, the land cannot be used for food crop production until the rubber is cut down, 30 or “0 years after planting, but if rubber is not planted, the land is left fallow about 10 to 20 years and then used for food again. Although rubber and food crops are substitutes, that is, when more rubber is grown, less food can be grown, the land resources of the region are not fully developed. The period of bush fallow could be shortened and jungle land not now utilized could be brought into production. Because food crops do not enter the export market, the extent of food crop production is determined by a domestic market limited by low per “1 “2 capita incomes. Farmers would produce food commercially if food prices rose relative to the prices of rubber and palm products. Prices of food may increase from population growth and from income increases. 0r, urban population may expand faster than food production and increase food prices. Moreover, many rural residents, particularly young men, are moving to urban areas. Conceixably the pepulation flow with the resulting changes in.wage rates could be of such a magnitude that agricultural production would be hindered by labor shortages. The current prediction, however, is for adequate food supplies in the immediate future} Thus, food prices will probably not increase significantly and rubber will still be preferable to commercial food production for most Midwestern smallholders. Oil Palm Palm oil production is the chief alternative to rubber produce tion as a source of cash income for Midwestern Nigeria smallholders. Prior to the Second World war, oil palm products were the primary exports of the Midwest; even today they are second only to rubber, amounting to 25,000,000 annually.2 For the most part, palm is grown in areas where rubber cannot be cultivated. Where both crops can be grown, rubber usually dominates. The primary reason rubber rather than palm is the Midwest's primary export is the Government's policy of heavily taxing the palm 1U. S. Department of Agriculture, Economic Research Service, Nigezig (washington, D. C.: U.S. Government Printing Office, 1962), p. 105. 2"Midwestern Nigeria,“ New York Times, January 20, 196“, p. 63. “3 industry and lightly taxing the rubber industry. Because of the tax structure, producer prices are wezghted in favor of rubber production. The primary agents for carrying out this policy are the regional Mar- keting Boards, which set the prices and buy all the palm oil, palm kernels, cocoa, cotton and peanuts produced for export in the region. By coding the prices they pay very low in relation to the prices at which they sell, the Marketing Boards, in effect, tax the producers. In 1965, when the producer price of palm oil was £“1/lOI- per ten, the london price was over £fl09 per ton of special grade oil. Between 19“? and 1961, the Marketing Boards earned surpluses of $106,000,000 from all the products which they pruchased.3 Palm produce contributed a large portion of this surplus: §“8,000,000. In addition to the Regional Marketing Board's tax on oil palm and kernels, the Federal Government taxes exports. Between 1955 and 1961, these two taxes ex~ tracted $50,000,000 from the palm product industry a- 20 percent of the total value of palm exports during that period."L Since 19V7, the palm industry has paid taxes of over s100,000,000.5 As a result of the low prices paid to farmers, smallholders' net revenues from commodities subject to Marketing Board control are greatly reduced. For example, the F. A. O. estimates that a Nigerian smallholder earns 62 to 8“ shillings per mature acre, when the price 3Gerald K. Helleiner, "The Fiscal Role of the Marketing Boards in Nigerian Economic Development, 19“7-61,” The Economic Journal, LXXIV (September 196“), p. 603. “Ibig., pp. 608-609. 5Ibid. as per ton of palm oil and palm kernels are 2:36 and £215 reapectively.6 (See Table 13.) If smallholders had received £50 per ton for palm oil and £30 for palm kernels (these being the approximate prices that they would have received in 1961} without the Marketing Boards), they would have earned 90 to 136 shillings per acre. These crude data help illustrate the point that palm producers receive about two-thirds their potential incaee without Marketing Boards. Table 13: Owners Returns from Production of Oil Palm from Wild Trees: Alternative Prices, Costs and Yields. Producers Price £50 per ton :51 per ton 133? per ton for Palm Oil for Palm Oil for Palm Oil wage £30 per ton 1:27 per ton 221+ per ton Rate Bunches for Palm Kernels for Palm Kernels for Palm Kernels Shillings Pounds m 21' acre ---------------- Shillings Per Acre ----------------- h 2,2bo 136 96 84 2,000 101 86 73 1,800 90 72 62 6.25 2,240 127 87 75 2, 000 92 78 61+ 1, EL Q 63 53 Cuputed from: Food and Agriculture Organization of the United laticns, “$53!; paelgpment in Nigeria, 196L80 (Rome, January 1965). p0 3'3 0 Similarly, the F. A. O. has estimated income to the owners of the new high yielding palm seedlings develOped at the Nigerian Institute for Oil Palm Research. (See Table 11!.) 6The F.A.O. estimated net revenue assuming that smallholders receive the Marketing Board's Producers Price. In practice, about 10 percent of this price is absorbed by the marketing system. 45 Table 1#: Owners Returns from Improved Oil P315 Production: Alternative Prices and wage Rates. ' fir? Produger Priggs £50 per ton £#l per ton £36 per ton 3 for Palm Oil for Palm Oil for Palm Oil £30 per ton £27 per ton £2# per ton wage Rate for Palm Kernels for Palm Kernels for Palm Kernels Shillingsgper acre # Shillings 592 #67 " #06 6.25 Shillings 5»? #22 361 Source: Food and Agriculture Organization of the United Nations, Aggiggltgra; ngelgpgent ig Nigeria, 126#-1280, Rome, January 1965, p. B-295. 1Depreciation charges of 33 shillings not included. 2Iield 8,000 Pounds of Bunches per Acre. 3F. A. 0. used £30 per Ton. When prices of palm oil and kernels are $36 and £2# respectively (approximate 196# prices actually paid to smallholders), improved smallholders average about #06 shillings per mature acre of oil palm. But they would earn 592 shillings per acre in the absence of Marketing Boards, one-third more than the estimated actual earnings. The heavy taxation of the palm industry results in: (1) decreased expansion of palm product production, (2) increased sales of oil on the domestic market and (3) increased production of palm wine. After reach- ing a peak in 1956, within the next seven years palm kernel exports fell 12 percent. Because palm kernels could not be consumed domestically prior to 1965, this export decrease probably reflects diminished produc- tion or collection. Oil exports fell 32 percent during the same period because an additional amount of oil was diverted to the domestic market. #6 Although no data are available, palm wine, which competes with the pro- duction of\palm oil, seems to be produced in larger quantities. One palm.p1antation and many smallholdings have substituted rubber for palm in order to take advantage of the greater profits available to rubber producers. Oil palm production is probably slacking off in Nigeria, even though it is highly profitable to the total economy. An acre planted with the high yielding seedlings developed by the Nigerian Institute for Oil Palm.Research provides a gross income to the economy of :56 net of Marketing Board's costs.7 Under their assumptions, the tax receipts from a mature acre of high yielding palm over $20.8 Nevertheless, as long as current prices and tax policies continue, rubber production will probably remain more profitable than oil plam production for Midwestern farmers. The balance could be shifted in favor of oil palm by either raising the taxes on rubber, lowering rubber prices, or lowering palm product taxes. Summary Smallholders in those areas of Midwestern Nigeria which are suitable for rubber cultivation do not commercially produce the two major alternau tives to rubber. Oil palm produces a very high return to the Nigerian economy as a whole, but because of the high taxes imposed by the Marketing 7David L. MacFarlane and Martin A. Oworen, "Investment in Oil Palm Plantation Operations in Nigeria: An Economic Appraisal,” Economic Development Institute, University of Nigeria, Enugu, Nigeria, December l96#, p. 81. .(Mimeographed.) 8Ibid., p. 81. 1*? Boards and Federal Government, the farmer receives only a very small proportion of the returns. Future price changes, effects of new governmental policies, changing world market conditions, population growth and urbanisation, could lead to substitution of palm or food crops for rubber, but this does not appear to be likely in the immediate fut”. e CHAPTER IV THE MIDWESTERN NIGERIA RUBBER INDUSTRY The Development of the Industry The Early Years: 1894-1921 The history of rubber in Nigeria begins in 189# when the Governor of the Colony of lagos brought a group of Ghmians to Nigeria to introduce methods for exploiting indigenous sources of rubber. In a year, exports rose from virtually nothing to over 5,000,000 pounds. The primary source of wild rubber was Funtumia elastica, a tree found in the rain forests of Africa. But after a few years, crude and intensive tapping had killed the trees, and the species almost disappeared in many areas. Thus, industry reached its maximum output only two years after the introduction of tapping and had ruined the trees in many areas within three years. The Government tried to prevent the destruction of rubberobearing trees by limiting the number of tappers, but did not succeed. In an attempt to replenish the trees, the Government also required all villages to plant communal stands of Funtumia. Villages in the Benin area responded en- thusiastically to this regulation; Christy reports that every village, big or small, had its communal plantation.l Approximately 700 Benin area villages planted 1,000,000 trees.2 Exports of wild rubber exceeded 1,000,000 pounds for the last time in 1913. lCuthbert Christy, The African Rubber_;ndustry and Funtumia elastica (London: John Bale, Sons & Danielsson, Limited, 19l17, pp. 13ul#. 2E. D. Morel, Nigeria (Iondon: finith, Elder & Co., 1911), p. 69» #8 #9 The rubber tree, Hevea brasiliensis, arrived in Nigeria in 1895 and the first estate was planted at Sapele approximately ten years 1ater.3'u In 1906, the Department of Agriculture planted its first plot of rubber.5 In 1912, an English firm established the second Nigerian estate at Ikotmbo in the Eastern Region. In 1925, 2,500 acres of European—owned rubber stood in what is now Midwestern Nigeria. The first major Nigerian-owned plantation was established near Sapele in 1916. Restrictions on alienation of land by foreigners brought new plantation development to a halt from 1917 until 1952. Planting of rubber trees in smallholdings began soon after their introduction into the country. During the first 20 years of the cen- tury, the Department of Agriculture encouraged smallholders to grow rubber by distributing seedlings and providing advice on cultivation and processing. The Department of Forests and the Department of Agri- culture planted numerous demonstration plots throughout Southern Nigeria from which they supplied seedlings. According to the files of the Department of Agriculture, peasants planted approximately 5,#00 3K. M. Buchanan and J. G. Pugh, Land and People in Niger;g_(London: University of London Press Ltd., 1955), pp. 152-153. “The date of the establishment of the first estate has been lost. Several authors state that the Sapele Rubber Estate was begun in 1903, but some evidence indicates that it may not have been established until 1908 or 1909. The manager of Jathomas Estates limited believes his firm first planted in 1899 but the Industrial Directory 126# indicates that it was established in 1916. 5Memorandum of the Director of Agriculture, "Rubber Growing," Memorandum No. 2961/DA/252, May 25, 1939, p. 1., ”Rubber Industry in the Camzzoons and Nigeria," File No. 1##51, I, National Archives, Ibadan, P. . 50 acres of rubber between 1909 and 1917 in Midwestern Nigeria.6 But smallholders did little planting after 1917; in 1916, the Department of Agriculture distributed l#9,000 seedlings, but because of declining markets, five years later only 32,000 seedlings could be distributed.7 In 1925, there were 5,#00 acres of native-owned rubber in Midwestern Nigeria, all planted between 1909 and 1917.8 Prior to 1915, almost all exports of rubber were from wild trees. The situation began to change about 1915 when the estate at Sapele (now the Sapele Rubber Estate owned by Pamol (Nigeria) Limited, a subsidiary of Unilever) must have begun production, increasing exports during the late 1910's. The Jameson River Estate (now also owned by Pamol) proba- bly started producing rubber about 1925. The trees first planted at Pamol's Ikotmbo Estate matured around 1920, but this estate remained small for the next ten years. By 1921 Revea trees probably were providing most rubber exports. Period of Stagnation: 1921-1935 In 1921, a new Director of Agriculture reversed the established policies of the Department. He wrote, "The distribution of rubber seed- lings to ordinary farmers should be discontinued as it is not desirable 6Memorandum of the Director of Agriculture, "Rubber in the Cameroons," Memorandum No. 1297/DA/252, June 1925, p. 2, "Rubber Industry in the Cam- eroons and Nigeria," File No. l##51, I, National Archives, Ibadan, p. 18. 7Memorandum of the Director of Agriculture, “Rubber Growing," op, git., p. 1. 8Memorandum of the Director of Agriculture, "Rubber in the Cameroons," Op, 313., p. 2. 51 that we should appear to be in any way advocating the planting of this product."9 He reasoned that Nigerians should not plant rubber because peasant producers could not obtain a reasonable price.10 The change in policy was also motivated by a desire to coordinate Nigeria's policies with British colonial policy to control the expansion of rubber acreage although Nigeria was not a party to the formal agreement.11 As a result of this decision, the Department of Agriculture and its successors played a minor role in the development of the rubber industry for the next 36 years. Between 1921 and 1935, rubber exports increased reflecting changing price levels and the growing acreage of mature plantations. Growing production at the Panel Plantations and the Jathomas Estate accounts for a large share of the increases in exports during the late 1920's. After 1930, exports first fell and then rose as a result of changes in world market prices and further increases in mature plantation acreages. But the acreage of peasant-owned rubber did not increase during this period. 9Memorandum of the Director of Agriculture, "Rubber Growing," OE. cit., p. l. 1'oM’emordum of the Director of Agriculture, "Rubber Cultivation at Sapele,” Memorandum No. l951/DA/259, 29 September 1925, pp. 2-3, ”Rubber Industry in the Cameroons and Nigeria,“ File No. l##51, I, National Archives,Ibadan, pp. 26-27. 11?. A. Bower, A. J. Brown, C. Leubrischer, J. Mars and Alan Pim, MiningI Commerce and Finance in Nigeria, Vol. II of The Economics of a gropical Dependency, ed. Margery Perham (2 vols.; London: Faber and Faber. 1 o PP. 153-5“- 52 The Modern Rubber Industry: 1936 to the Present Rubber prices increased in 1936 because the major rubber pro- ducing and consuming countries initiated marketing controls. At the same time, world palm oil and palm kernel prices fell, shifting the competitive advantage for the Nigerian farmer away from palm products and towards rubber. Because of the rising value of rubber, two foreign firms, British Beta Shoe Company and the United Africa Company, actively sought to purchase rubber and to lease mature rubber trees for tapping. Most of the existing smallholdings had been planted before 1921, and the Nigerian peasant quickly saw the advisability of expanding his acre- age. Early in 1939, the Colonial Government became aware of the in- creased interest in rubber and considered revising its rubber policy. Before they could make a decision, werld War II began, causing a post— ponement of the discussion. During the war, the Government encouraged rubber production from both Hevea and wild trees by raising lump prices from 2 1/2d to 6d per pound and raising high quality sheet prices from 6 1/4d to 9d per pound. After the fall of Singapore in 1942, prices went even higher. During world war II and since, Government policy has tacitly en- couraged the expansion of rubber production. Following the war, the Marketing Boards paid a relatively low price for the Nigerian producer for palm products despite high world market prices. As a result, pro- duction of oil palm products decreased and resources shifted into rubber production in the Midwest. In 1952, the Government of Nigeria reversed its policy and permitted 53 .ncnnsu mono» use evens.nenvo .uafizm .Aonuenadacdveasgaoe you vopeouuooa .Anoaalmnma .dddOdwnwvevm Heano «nomeav Hues-um oeeua cannuam..edAoMHz Ho nodpdueeom "oenuom mma.aa me smm.aa om Hmo.aa on em~.sa an nNo.oH as Hme.a «a fleece «N n- n a. as u. s n- N s- s u- «sense on It moa H m: II Ha II n II 00 II mwnapauo one menom .§ .30 nmn.e on mom.“ mm man.: an mmo.e mm Hma.m as ass.~ ea cacao 98 a «$4 a node .3 Baum 2 on; 3 and S 3.8 Emma n3; we 2:... ow Sm; cm 93.: 3 main is Swim d- $2.9m? I'm: 3.. Ill 33 M a m a m mdov IMII mac» and» one» omen name use» use» use» one» once dawn name was» 35059 loony loony loony maona tsona {coma {some [some teeny loony tsoaa and.» .33 31> .33 31> be. 81> 3.3 31> .33 31> 53 396 Isaac Isaac Isaac sauna Isaac sumac 1.:umwmwiuu nmmfl «mad Head OWMH wwmm Wmeaddmma .396 3.33 3.3. awakens «as sand 5A the alienation of land by foreigners. As a result, several new rubber plantations were established, three by a consortium of Malayan rubber firms and one by Dunlop Tyres. A total of 28,5h8 acres of foreign owned rubber now stands in Nigeria. Exports have continued to increase at a rapid rate, exceeding 63,000 tons in 1963. Appendix B lists the exports of rubber from Nigeria since 189“. Between 1953 and 1963, volume of rubber exports doubled and the value almost quadrupled. The grades of exports also improved. Pro- duction of sheets of grades higher than B-Z increased from 10,9h2 tons in 1958 to 22,205 tons in 1963 while B-2 production fell from 16,911 tons to 4,386 tons. (See Table 36) A large share of the increase of high quality sheet exports results from increased mature acreage on planta- tions, as opposed to smallholdings. Plantation exports inl958 totaled about 2,230 tons. In 1963, they reached nearly 8,h00 tons, an increase of 6,000 tons, which represents over half the increase in high quality sheet exports. At the same time, crepe exports almost tripled, to 36,111 tons. 'In fact, the most significant change is the substitution -of crepe for sun-dried sheets (B-2 grade) exports. The establishment of a large number of crepe factories caused the shift from sheet to lump production. In 1958, when only 13 crepe factories existed most farmers produced B-2 sheets. Today 30 factories bid up the price of lumps, diverting production from sheet to lump. 55 Table 16: Three Classes of Exports as a Percent of Total Exports, Nigeria , 1958-1963. R.S.S. I R.S.S. VI Tear R.S.S. v (B-Z) Crepe Percent _ 1958 26.17 1.0.45 33.19 1959 28.68 31.57 39.73 19602 29.98 27.05 82.86 1961 35.72 20.25 83.57 1962 33.75 11.75 53.63 1963 35.11 6.99 57.10 Source: Computed from Table 15. 13.8.3. signifies ribbed smoked sheets. 2Tb. trend was probably retarded in 1961 by legislation against adulteration of lump in Benin Division. Table 17: Plantation Rubber Production, Nigeria, 1958 and 1963. Plantation 19 58 1963 may. Asaboro Ifon --- 3&0 , 000 Ovade --- 381+ , 000 Illushin -- 322 , 000 Arareni --- 2 , 250 , 000 Dunlap- --- 1, 708 , 000 Oban --- 3 , 000 , 000 Pamol. Ikotmbo 2,320,l+l6 337033421» finale 2 366.560 3.778.“42 Uronigbe --- 2 . 371, 626 Jathomas 325 , 000 325 , 000 Total 5, 011, 976 18, 182 .492 Sources: A. Mulder, unpublished paper prepared as 56 background for the Nigerian representative to the International Rubber Study Group, May, 1964: Personal conversations with the managers of Jathomas Estates, Asaboro Estates and Urhonigbe Rubber Estate: letter from J. L. Bryan, Lhnaging Director, Pamol (Nigeria) Ltd., July 31, 1964. The Organization of the Nigerian Rubber Industry Nigerian Rubber Plantations. Nigeria's 26 largest estates contain 6?,98l.acres of rubber. (See Table 18.) Eastern and, Midwastern Nigeria each contain 10 estates and six are in western Nigeria. The Eastern Region has the largest acreage of plantation rubber, 29,897 acres. western Nigeria-is second with 22,772 acres, followed by the Midwest with 15,312 acres. The figures in Table 18 are misleading because they indicate that the average estate in the Midwest is much smaller than in other regions. This study was conducted in the Midwest and, as a result, additional small Nigerian-owned plantations in that area came to light. If the true number of estates in other regions was known, that average would drOp as well. The Midwest, west and East contain one, two and six publicly-owned estates respectively, managed by the regional development corporations. The publicly-owned estates tap only 8,833 acres on two estates; the remaining acreage is immature. Eleven Nigerian-owned plantations containing almost 10,000 acres are shown in Table 18. Because no attempt was made to locate all privately- owned domestically financed estates, the list only includes the larger hold- ings obtaining planting materials from the Midwestern Nigeria Ministry of 57 Agriculture and Natural Resources, and does not include many other estates obtaining materials from other sources. 0f the 3,568 acres in the Midbmst, two companies own 2,928 acres at four different locam tions. The sizes of two other estates are not known. Table 18: location, Ownership and Acreage, Nigerian Rubber Plantations, 1963-61+. Region Ownership Number of Estates Acreage Midwest Public Nigerian 1 5.u59 Hivate Nigerian 1 7 3, 568 Private Foreign ‘41“ 6,275 Total 10 15,312 west Public Nigerian 2 11,787 Private Nigerian 3 5.974 Private Foreign “13 5,011 Total 6 22.772 East Public Nigerian 6 4,980 Private Nigerian l 350 Private Foreign 2 17,262 Mixed, Private Foreign and Public Nigerian “la, 7,805 Total 10 29,897 All Regions Public Nigerian 9 21.736 Private Nigerian 11 9,892 Private Foreign 5 28,5A8 Maxed, Private, Foreign and Public Nigerian _l_, 7,805 Total 26 67,981 . .5... 1Includes 2,h00 acres projected for planting by 1963m6b. Nigeria contains five foreignuowned rubber plantations, two in the Midwestern Region, one in the western Region and two in the Eastern Region. Eastern Nigeria contains the largest planted area of foreignaowned estates, 58 17,262 acres: western Nigeria contains the smallest, 5,011.acres. British interests own three estates and a Malayan firm.owns two. In addition, one estate has mixed capital sources, a joint venture of the Eastern Nigeria Development Company and a Malayan.firm. In the Industrial.§irectogy 126M, an estimate of employment in- dicates that nine plantations employ over 8,000 people.12 Actually this figure includes employees making crepe sheets on three estates ‘which also buy lumps produced by smallholders, but the error is offset by the lack of figm'es for the publicly-owned plantations in the Midwest and'Uest and one of the foreign-owned plantations in the Midwest. The estimated 8,000 workers are employed on estates owning 35,170 acres, one- half the total acreage of estates in Nigeria. Thus, employment on estates is probably at least twice as high. Mulder estimates that estates produced 17,000,000 pounds of rubber, 1“ percent of the total in 1962-63. He predicts that plantation produc- tien.will increase to 50,000,000 pounds, 30 percent of production by 1970-71, on the assumptions that smallholder production in the Midwest will not increase and that all estates already planted by l96h-65 will have come into production.13 According to available reports, yields on Nigerian estates are high. One foreign-owned estate had an average yield in 1963-69 of 1,100 pounds 12Federation of Nigeria, Federal Ministry of Commerce and Industry, 122.412.. p. 16. 13A. Mulder, unpublished paper prepared as background for the Nigerian representative of the International Rubber Study Group, May, 1969, unpaged. 59 per acre.lh This was an older estatq,planted in the l9h0's and 1950's mostly with clonal seedlings. One Nigerianmowned firm has yields of #00 pounds on one of its holdings and 800 pounds on another, both planted in the late 1950's with a.mixture of low and high yielding trees. In comparison, estates in the Far East average about 600 pounds per acre. Apparently, the potential yield of rubber in Nigeria may be very high. Nigerian estates all produce ribbed smoked.sheets (R.S.S.) I as their primary product;and they mill cup and tree scraps into estate crepe, also a high quality product. One estate also produces small quantities of concentrated.latex for domestic use. Nigerian Rubber Smallholdings Nigeria contains between 900,000 and 1,500,000 acres of rubber smallholdings, most of which is in the Midwest. (Table 19 presents data indicating the relative importance of plantations, smallholders and farm settlements in the Nigerian rubber industry.) The other three regions only contain a few thousand acres, probably not more than 10,000 acres in total. About half of the total acreage in the Midwest was planted since 1955 and is not yet tapped. According to a survey conducted in 1958 by the Eastern Nigeria Ministry of Agriculture and Natural Resources, Benin and Urhobo Divisions contain most of the rubber found in the Region. (See Table 20.) Personal observation indicates that Ishan and Asaba also contain large acreage of rubber. Between 170,000 and 290,000 peOple own, tap and market rubber from Midwestern smallholdings. 3‘”Letter from John L. Bryan, General Manager, Pamol (Nigeria) Limited, Calabar, Nigeria, July 18, 1964. 60 Table 19: Area and Production of Rubber Plantations, Smallholdings and Farm Settlements, Nigeria, 1962m63. Produgtion - Land Area1 Producer Proportion Proportion Organisation Output of Total Area of Total Thousand Thousand EPogndg Peggegt Acres Percent Smallholders 109,000 86 1,200 95 Plantations 17,836 In 68 5 Farm Settlements2 --- --~ 2 + Source: A. Mulder, unpublished paper prepared as background for the Nigerian.representative to the International Rubber Study Group, May, 1964. 1'Area estimates based on the data collected in this study. 2Not yet tapped. The average smallholder owns about 10 acres of rubber in a number of small plots. Because rubber is usually interplanted with food crops, the trees owned by one man are scattered over a wide area. Rarely do individual plots of trees cover more than four acres. Extrapolation of a sixdweek sample of rubber production on lh farms indicates that small- holdings yield approximately h00 pounds of dry rubber per acre per year. The rubber produced on smallholdings is converted on the farm into a marketable product for sale to a middleman. Most farmers coagulate their latex into lumps of rubber, often adulterating the product with sand, stones and.sticks for added weight. Others produce sunadried sheets, rubber which is rolled out and then dried in the sun or over the 61 hearth, or in the case of a few rich farmers, dried and cured in a smokehouse. At this stage, sheet rubber is nearly ready for exporting and lump must be converted.to crepe sheets, but both kinds.are sold to middlemen. Farmers try to sell lumps before they dry, preferably the day of production, but they accumulate a quantity of sheets before they sell. Table 20: Smallholder Rubber in Midwestern Nigeria by Divisions, 1958-5 9 e 1 Pr0portion of Division Area Total Aeges Percent Benin 20h,000 58 Urhobo 130,000 37 Ishan 6,210 2 Asaba 4,250 l Aboh 3,000 l Afenmai 2,000 1 Hastern Ijaw' 850 ”2 Harri 5oo -2 Total 350,810 100 Source: western Nigeria Ministry of Agriculture and Natural Resources, “Agricultural Statistics," Benin Delta Circle File No. 2608, pp. 16, 28, 1+1, 55, 62. 1Divisions are the largest administrative units within a region. The Midwest had eight divisions until two more were added in 1963. 2Less than .5 percent. Middleman After processing their sheets and preparing their lumps, farmers sell to middlemen, private businessmen, whose capital usually consists 62 only of a bicycle and scale. They weigh lumps on a small spring scale and transport them, hanging on.wires from the fenders and handlebars of their bicycles. Middleman pay according to weight alone, regardless of the quality of the sheets or lumps; and prices vary very.little through- out the entire region, although they tendto be lower in the more inaccessible villages. Dealers Middleman sell to dealers either in the larger towns or at specific collecting points by the roadside. Typically, the dealers supply the middlemen with cash to buy rubber from the producers. Instead of charging interest, the dealers expect the middlemen to sell their purchases to the lender in return for the service. The transaction between middlemen and dealer also proceeds by weight only. In addition to financing the middlemen, dealers also assemble the rubber, transport it to the exporter-processor and smoke whatever sheets require it. A few dealers have integrated their services to include pur- chasing, processing and exporting. Some small dealers by from middlemen and sell to other dealers rather than directly to exporters. Baalers usually rent a store in a large urban area where they buy the rubber from middlemen and accmlulate it. They often own trucks for transporting the rubber to the exporters. Processor-Exporters Exporters pay according to the quality of the rubber. Usually an exporter samples a lump and pays for the whole lot on the basis of the 63 sample's quality. The exporter weighs.the lumps and removes a 10 per- cent sample. He mills the sample into wet crepe sheets and pays the dealer according to the weight of the clean crepe produced from.the lumps. A few exporters process each delivery separately, but most prefer to process only the.samples separately and mix all.the remaining lumps together. Exporters buy sheets in much the same way. After the delivery has been weighted, a 10 percent sample is removed and graded and the entire delivery is bought according to the quality of the sample. After purchasing, the processors clean the sheets, manufacture the lumps into crepe and prepare both for exporting. (Appendix A ex- plains the manufacturing of crepe.) Because the producers add so many adulterants to lump, most crepe factories use a machine which breaks down and.washes the lumps. Most processors first cut open lumps by hand to insure that no hard adulterants such as scrap metal damage the mills. Because of adulteration, Nigerian crepe is among the lowest quality crepe in the world and its price is somewhat below the price of R.S.S. VI sheets. The exporters usually clean sheets of dirt and mold before packing them. In this way, the quality can be increased significantly, usually by about two grades. Exporters claim that this is the sole source of their profit, and that, in fact, they pay the dealers virtually the same price they receive for each grade. Some exporters smoke wet sheets, but usually this is left to middlemen and dealers. After washing, the ex- porters pack the sheets into bales of 22h pounds. The major weakness of the organization of the industry is its failure to reward high quality production. The producers primarily 6h determine the grades of rubber; since they are not rewarded for good rubber, they make no attempt to improve quality. Indeed, the producers actually find it profitable to deliberately reduce quality. The resulting loss to the Nigerian economy probably exceeds £1,000,000 a year. Prices paid to middlemen and producers are relatively stable bee cause the processing industry is oligOpsonistic. The number of processors is so small that if a single firm.ohanges its price, it noticeably affects all the others and they react. If the individual firm should lower its prices, the others might not follow, and its purchases would be reduced. Firms are also reluctant to raise prices because the other processors would probably do the same, so that no large increase in volume would result. Changes in price occur only when world market prices change enough to force all firms to move together. Government Programs to Improve the Smallholder Industryls Rubber Improvement Campaign, l957-6h In 1957, the western Nigeria Rfinistry of Agriculture and Natural Resources initiated its Rubber Improvement Campaign, the first time since 1921 that the government had encouraged the cultivation of rubber by smallholders. The Rubber Improvement Campaign attempted to lower costs of producing rubber in Nigeria in order to maintain the competi- tive position of the Nigerian product on the world market and increase the incomes of rubber producers. 15From 1954 to 1963, the two provinces of Midwestern Nigeria were part of western Nigeria. In August 1963, the Midwest became a region. 65 The Campaign had two phases. Phase I consisted of projects in- tended to immediately increase the income of producers: training in proper tapping and processing, and establishment of processing coopera- tives. Phase II projects were intended to improve the longmterm com- petitive position andyearnings of rubber farmers by encouraging them to utilise high yielding planting materials. There were five major projects: (1) tapper training, (2) processor training, (3) maintenance training, (4) establishment of processing cooperatives and technical adrice to builders of private factories and (5) sale of clonal seedlings. In terms of total participation, tapper training was the largest project of the Campaign. Between 1957 and 1962, the Ministry trained over #9,000 rubber tappers in a free fiveaday course.16 But the western Nigeria Ministry cancelled tapper training in 1962 because it did not significantly improve tapping practices on most farms. The program had failed because: (a) many farmers, even after training, did not tap their own trees: (b) itinerant tappers quickly revert to old techniques because short-run income is higher when using poorer techniques; and (c) sons of farmers soon leave the farm even though they might have been tappers at the time of training. Also under the program, farmers were trained to process rubber and maintain their trees. Over 17,000 farmers and tappers were trained to process rubber at the cooperative processing centers.17 Training in proper maintenance never received as much attention as the two other training programs. Between 1957 and 1963, the western Nigeria Rhnistry 16E. 0. Ojurongbe "Rubber Rehabilitation and Tapping Techniques," Ibadan, (December 19635, p. 3. (mmeogmphed.) 17:2;1, 66 only trained.l,h00 farmers in maintenance.18 The most complex and expensive programmwas the establishment of cooperative processing factories (farmer's unions). For each cocpera- tive, the Ministry of.Agriculture and Natural Resources provided the technical skills to build a factory and smokehouse and arranged a loan of imported materials and equipment from the Association of Nigerian Cooperative Exporters (ANCE). Until the loan was fully re. paid, the cooperative was obligated to sell its rubber to ANCE. The members of the cocperative paid an entrance fee based on the actual cost of building the facilities plus two pence per pound of rubber processed and sold through the cooperative. The cocperative supplied their members with all equipment and chemicals. The Ministry aided the construction of approximately 200 processing units, of which 70 were cooperatives.l9 But the cooperative program‘was only moderately successful. Less than half of the cooperatives still operate today and even fewer repaid their loans, Since 1962, few new factories have been built because ANCE refuses to extend more credit. Among the reasons given for the unsatisfactory performance of the coopera- tives are: (a) the cooperatives failed to produce the highest quality products, so that the profits of cooperative members are not much higher than if they produce B—2 sheets, (b) they became entangled in the politics of the region and village, (c) ANCE failed to pay competitive prices, (d) itinerant tappers refused to utilize the services of the cocperatives, (e) poor.management, (f) the difficulties of transporting the sheets to Sapele for sale to ANCE and (g) the price of lump was high. 18Ibid. 19 Ibid., p. 4. 67 The major project of Phase II, the long-term improvement of the rubber industry, was the sale of high quality seedlings. Between 1958 and 1961, the Western Nigeria Ministry of Agriculture and Natural R0- sources sold enough seedlings to plant 2, 580 acres. (See Table 21.) Data for more recent years are incomplete, but they indicate that annual sales were even higher except in 196+ when, because of adminis- trative difficulties resulting from establishing the new Region, the Midwest Ministry distributed only unselected seedlings intended for budding. The Ministry charged 1 l/Zd per seedling, a net subsidy of about 8 1/2‘1 to 10 l/Zd. Technical advice. and training in preper planting and maintenance are associated with the sale of seedlings. Table 21: Acres of Rubber Replanted with Seedlings Sold by the Western Nigeria and Midwestern Nigeria Ministry of Agriculture and Natural Resources, Midwestern Nigeria, 1958-61+. Division 1958-1961 19621 19631 19614} 592.22 — Aboh 207 65 Harri and western Ijaw 25 250 Urhobo 9+2 9352 6+ Asaba 35 Benin 38+ Ishan 706 126.3 Afenmai 231 Total 2,580 Source: Western Nigeria Ministrge gin? riculture and Nat sources, "Rubber Policy and G,enera1" Eilta Circle, Fileufigl $00, 0813a Farm Benin Cit 2 61-259. 273-301. 6307A 3073. 3070. 30713. 7E, 3071‘, 3076 30%,1’511-324, 333, mos-3116, 3t+ég Letter from the Senior Agricultm'al Superintendent, Urhobo Division, Reference No. 13133/245, July 22, _l96h. lhta incomplete. 2Includes 1962. 68 In order to publicize the need for replanting with high quality seedlings, the Western Ministry planted five to ten acre demonstration plots in public places throughout the region. It cut down old rubber plantations, replanted them'with clonal seedlings and maintained them. Thus far, none have matured and no plans have been made for their tapping. Rubber Rehabilitation Scheme and World Bank Rubber Project, l96b As part of its l96h-68 Development Plan, the Midwestern Government initiated a new program for aiding the region's farmers to establish im- proved smallholdings. Under the Rubber Rehabilitation Scheme, each par- ticipating farmer is subsidized £20 per acre in cash and in kind to re- plant up to six acres of rubber. In order to qualify for the program, the farmers must belong to a cocperative with at least 50 members. Dur- ing the four years of the plan period, the Government expects to replant 15,000 acres for which £271,515 have been allotted. Midwestern Nigeria, in collaboration with the World Bank for Rem construction and Development, also plans to establish two estates of 5,000 acres each which will be divided into six acre smallholdings after the trees have been tapped for two years. The workers on the estates will become the owners of the smallholdings. The total cost is expected to be about il.5 million, of which the Government will pay about half. Summary This chapter has sketched the development of the Nigerian rubber industry from.the simple exploitation of wild rubber plants around the turn of the century to its present status as the largest producer of 69 natural rubber outside the Far East. The persona1.initiative of Mid- western smallholders has been the main force behind this progress. Nigeria's smallholders began the major expansion of planting rubber without specific governmental encouragement, and today rubber is the Midwest's most important export industry. But because rubber produc- tion in Nigeria is a peasant industry, modern technology has not in- fluenced practices greatly. Farmers plant unselected seedlings, progeny of the seedlings first brought into the country even though materials are available which produce two or three times as much rubber. Because of ignorance and because they want to maximize shortaterm income, Ni- gerian smallholders handle their trees so crudely that yields are reduced and trees are killed. Because they lack the capital to build adequate processing facilities, smallholders produce very low quality products. Since 1957, the governments of Midwestern Nigeria have tried to improve technology by selling highqyielding seedlings, establishing processing cooperatives and teaching the modern techniques of rubber production. The importance of rubber to the Nigerian economy makes it imperative to determine means of further improving the industry. CHAPTER V METHODOLOGY FOR DATA COLLECTION ON ORDINARY SMALLHOLDINGS This study comprises three surveys: (l) a general survey of tax- payers in six divisions of Midwestern Nigeria, (2) a survey of a sub- sample of the taxpayers who are rubber farmers and (3) a survey of farm- ers 'who bought improved seedlings from the Ministry of Agriculture and Natural Resources between 1958 and 1962. Chapter V describes the methods used to collect data from taxpayers and a subasample of taxpayers. The survey of taxpayers called the general survey, had the fol- lowing objectives: (1) determining the acreage of rubber grown by peasants in Nigeria, (2) delineating alternative organizations and practices, (3) providing information about the sources and availability of resources for growing rubber and (a) providing the subasample for intensive study. The survey of a sub-sample of taxpayers, called the inputaoutput survey, determined the physical inputs and outputs and the costs and returns of producing rubber. Sample Selection General Survey The sampling procedures were designed to satisfy three criteria: (1) unbiased sample, (2) minimum costs and (3) a pOpulation of known size. The first two criteria are obviously desirable. The third makes it possible to extrapolate from the sample to the full population. In order to reduce costs, the survey only includes six of the 70 71 eight Midwest divisions.l According to previous estimates, the other two contain very little rubber. In 1958, the Ministry of Agriculture and Natural Resources estimated that while the two omitted divisions, Afenmai and western Ijaw, contained only 2,850 acres of rubber, the six divisions included in the survey - Benin, Asaba, Ishan, Urhobo and Warri - contained 311,7,960 acres. (See Table 20.) To reduce the time required for locating respondents, the survey included only villages with less than 3,000 inhabitants. Twenty vil- lages were selected randomly from the 1,699 which according to the 1952 Census had populations of less than 3,000.2 If a substitute was required, the village in the same administrative group having the numerically closest male population was selected. Table 22 is a list of villages where the enumerators actually interviewed taxpayers. Because only 19 interviewers were available, the last village selected was not uti- lized. The enumerators held interviews in seven substitute villages because they could not locate four of the villages, the elders of one village refused permission to randomly select farmers and in two villages the interviewer failed to collect reliable data. Every tenth person on the village tax roll was selected for interviewing. The tax roll consists of every adult male and those 1When the study was already in progress, two new divisions were organized out of Urhobo and Afenmai Divisions. They are not treated separately in this study. 2Federation of Nigeria, Po ulation Census of the Western Region of Ni eria, Bulletin Nos. 1-9 (lagos: the Census Superintendent, June 19555, Nos. 6 and 9. 72 Table 22: Villages in the General Survey, Efidwsstern Nigeria, 1963-6h. 1952 Male Popup 1952 1963 lation over Total Number on Division Village lh Pbpulation Tax Roll Selection Aboh Unaujie 33 122 #1 Substitute Unusedeli. 83 342 73 Substitute Harri Omodino 60 174 50 Substitute ' Orere 65 208 50 Original Urhobo Ekrijesue 25 97 23 Substitute ’ ,Ovbor 165 762 176 Substitute Oku Elume 26 10” 17 Original Ekrota 40 163 24 Original Uduere 6k 313 68 Original Asaba Owere 249 1642 231 Original Benin Ugo - Ugbayon 37 157 32 Substitute Ehor 701 2385 545 Original Unario 26 123 27 Original Ekae 28 118 25 Original Ishan Idinegbon 96 39” 70 Original Egbaiki 192 851+ 122 Original Eko Ugboho 3h 118 32 Substitute Ogemere 29 137 16 Original Eko E10 29 137 16 Original females who earn over £300 annually. In the event the original could not be interviewed, the individual listed next on the tax roll was chosen to be a substitute. ‘When a substitute could not be interviewed, the enumerator simply reduced the number of interviews in the village by one. The probability of selecting any particular person is 1/16,9h0 and the probability of selecting a substitute is 1/16,9h0+ l/l6,9h0 times the probability that the original could not be interviewed. Because the probabilities of selecting an original and a substitute are so close, 73 the two groups are not differentiated except for estimating the aggre- gate number of farmers and rubber acreage. Of the 130 individuals selected from the tax rolls, an were not interviewed for the reasons listed in Table 23. Of the b4 substitutes, 25 were interviewed and 19 were not. Table 23: Success in Locating Respondents for the General Survey, Midwestern Nigeria, 1963a6b. Selection Outcome Number Original 130 Interviewed 86 Dead 2 Away Temporarily 16 Away Permanently 16 Others Not Interviewed 1 Substitute .Qu Interviewed 25 Dead 1 Away Temporarily 6 Away Permanently 5 Others Not Interviewed 7 Input-Output Survey Rubber farmers selected for the inputmeutput survey included approximately equal numbers of sheet and lung producers, no more than two farmers per enumerator and different size farms. The taXpayers who had been interviewed in the general survey were first sorted into two groups: rubber producers and others. Then the rubber producers were separated into those who were tapping at the time of the interviews and and those who were not. Finally, the farms being tapped at the time of the initial interview were classified acce‘d’ng to the estimates of their 7n acreages and 22 farms were selected. The location, size and product of the 22 farmers selected for the input output survey are listed in Table 2h. Input data were obtained from 18 farmers and output data from In farmers. Four farmers had discontinued tapping or refused to cooperate. One farmer had switched from sheet to lump production and all lessees of farms produced lumps. Table 2h: Location, Product and Estimated Acreage of Farmers in the Input-Output Survey, Midwestern Nigeria, 196%. Division Villages Product1 Estimated Holding2 Notes asses. Aboh Umuajie Sheets 16 Input only Umusedeli Sheets h Cooperated urhobo Ekrijesue Sheets #8 Cooperated Ekrijesue Sheets 30 Not tapping Ovbor ‘ Sheets 50 Not tapping Ovbor Sheets 30 Not tapping Oku Elume Sheets 8 Cooperated Ekrota Sheets h Refused to cooperate Ekrota Leased h Cooperated Uduere Leased 3 Input only Asaba Owere Leased 36 Input only Benin Ehor Leased 2h Cooperated Ehor Leased 16 Input only Ehor leased 20 COOperated Ehor Sheets 15 Cooperated Unario Lumps 20 C00perated Unario Sheets 64 COOperated Ekes Lumps 36 C00perated Ishan Idinegbon Lumps 9 Cooperated Idinegbon Lumps 6 Cooperated Egbaiki Lumps 2 1/2 Cooperated Eko Ugboho Lumps l5 Cooperated 1Hired labones or family members tap farms producing lumps or sheets. 2Estimated in the taxpayers survey. The others are leased to non-family for a fixed monthly rent. 75 Population Size Although a primary criterion for selecting sampling techniques was a known population size, the total number of taxpayers in villages of less than 3,000 inhabitants in 1952 was not known. Thus, estimation procedures had to be used to determine the number of taxpayers. The correlation coefficient between the 1952 adult male population and the number of taxpayers in 1963 in the 19 villages surveyed is 0.98. Linear regression was used to estimate the equation: I = 3.368 + 0.798X where Y equals the number of names on the tax roll in 1963 and X equals the number of males 15 and over in 1952. The adult male population of villages of less than 3,000 inhabitants in the six divisions was 212,9u6 in 1952. Substituting into the equation, the estimated number of names on the nominal tax rolls in 1963 is 173,299. Interviewers General Survey The Midwestern Nigeria Ministry of Agriculture and Natural Resources provided extension workers as interviewers. For the general survey, the Ministry supplied 19 rubber instructors, extension workers in charge of carrying out the Rubber Improvement Campaign. As preparation for carrying out the survey, the rubber instructors received three days of training, including the techniques of interviewing, the purposes of the survey, lo- cating the individuals to be interviewed and an explanation of the ques- tionnaire. After completing classroom instruction, these enumerators 76 interviewed farmers in the immediate vicinity of Benin City for prac- tice. Input-Output Survey Two different groups collected data for the input-output survey. Eight rubber instructors and three hired enumerators collected output data on 1n farms: and two teams of Ministry and privately hired employees collected input data on 18 farms. The rubber instructors and hired enu- merators all received two days of training in groups of four or less. Their training included instructions in keeping records of production and measuring the rubber content of latex. Two teams, each including two interviewers and several laborers, measured inputs for the survey. An Agricultural Demonstration Officer from the Ministry of Agriculture and Natural Resources led one team and an experienced interviewer-interpreter, who was hired privately, led the other. Training consisted of two days in the classroom to explain the purpose of the research and to review the questionnaires, and four days in the field to practice interviewing and to learn to measure acre- age. Data Collection General Survey After their training, the interviewers for the general survey obtained a list of taxpayers and went to the villages. Before pro- ceeding with the interviews, they requested permission to conduct the survey from the village elders. If they could not locate an interviewee 77 on the first attempt, the rubber instructors tried at least once more: in practice they usually made several attempts. After completing all the interviews, the enumerators returned the questionnaires to Benin City for verification. Appendix C contains copies of the questionnaires. Input-Output Survey Collection of input-output data was more complex. Measurement of output required living on the farm for six weeks. Every day the inter- viewer accompanied the tapper to the rubber plot where be counted the number of trees tapped, measured the volume of latex collected and tested the latex for its rubber content. If a farm had two tappers, the inter- viewer accompanied each on alternate days and recorded the number of trees tapped by each tapper and the rubber content of the latex every other day. Every day, they measured the volume of latex after the tappers returned from collecting to the place of processing. No enumerator was responsible for more than two tappers. In addition to measuring production, they re- corded the quantity, price and grade of all sales and kept inventories of lumps and sheets. All inputs except land were estimated from data collected in inter- views. Labor inputs were determined by asking the farmers how many la- borers carried out each major operation in 1963. Tools and equipment in- puts were determined by asking the farmers how many they owned at that time, the cost of each tool and the life expectancy of each. Estimates of the cost of processing chemicals were made in the same way. The farmers and tappers were asked when they last purchased chemicals, how much they bought, what was the cost and how long they would last. 78 Because the farmers do not know the number of acres of rubber they own, every rubber plot had to be measured. A rubber plot con- sists of a group of trees planted in the same year on a contiguous area. Enumerators measured with a prismatic compass and tape measure and then plotted each plot on graph paper. A planometer was used to estimate the acreage. At the request of the Ministry of Agriculture, trees on each farm over five years old were sampled for girth and tapping history. Every 500 feet, a square 1/40 of an acre was marked out in the interior of the farm. The enumerator counted the number of trees in the square, measured their girths at 20 inches from the ground, counted the number of tapping cuts and measured the angles of the cuts. The results are shown in Appendix E, Table 9. The results of the surveys described in this chapter will be pre- sented in Chapters VI and VII. CHAPTER VI SMALLHDLDER.RUBBER PRODUCTION IN MIDWESTERN NIGERIA Because effective policy cannot be formulated without a con- crete grasp of the industry's operation, this study describes the 'Nidwestern Nigeria rubber producing industry. Pblicy makers-in Nigeria have been forced to act without information because the the literature is incomplete and contradictory. Descriptions con- flict because non-representative sampling techniques have been used and information is incomplete because no thorough study has been carried out with the objective of describing the industry. The Agricultural Economy Land and Land Tenure An Ishan or Bini may cultivate any plot in his village without permission, as long as no one already cultivates it or farms progressively towards it.1 When a farmer harvests his crops and allows the land to re- turn to fallow,‘he relinquishes all rights to the land. Because the village owns the land, the council of village elders, the executive of the village, administers it. The Ibo and Hrhobo tenure systems are quite different. Once a parcel of land is farmed, no one else may cultivate it.2 Land passes from father to son or if there are no sons, from brother to brother. But, even though a family has continuous use of certain plots, it cannot LR. E. Bradbury, The Benin gingdom and the Edo-Speaking Peoples of South western Ni eria, Part XIII of Western Africa, ed. Daryll Fords (London: International African Institute, 19575, p . h4-h5, 76-77. 2Ibid., pp. 150-151. 79 80 sell them because the ultimate ownership remains with the community. Unowned parcels may only be cultivated with the elders' permission. The tenure system.is rapidly changing throughout the Midwest under the impact of the Mopean team-e system and the introduction of a market economy. In urban areas, land is owned in fee simple. In rural areas where outside influences are strong, such as along main roads, sale of land is becoming increasingly common. In the general survey, farmers were asked whether they own farm land communally or privately. Private ownership was defined as the ability to sell land to an outsider without seeking the village's permission. Forty-eight of the 78 firmers replied that they own their farms privately and only 29 said they may not sell without seeking permission of the village elders. One did not reply. Agricultural labor Tasks are customarily assigned by sex and age: men perform the heavy tasks while women and children perform the others. Typically a man and two or more women cultivate a farm jointly. Hen clear and bm-n the plots and prepare the planting materials. Both women and men plant the crops and the women usually weed them. Men harvest while women transport the crops to the place of storage and women usually sell sur- plus in the market. Men own yams and women own cassava. In a few areas, women help plant and weed rubber, but usually rubber is the responsibility of men only. Women tap rubber dwing periods of high price, but this study only found one female tapper. Farmers hire labor by the day, week, month or Job. They pay men 3.5 to 7 shillings a day, women 2 to 5 shillings a day and children 1.5 to 3.5 shillings a day plus one or two meals in each case. Wage rates 81 vary according to the season and location. Midwestern commercial farms commonly hire labor by the month and job. In Eastern Nigeria, Welsch reports, non-resident rice farmers hire labor by the job, and Miller reports that palm processors hire monthly wage labor.3’u Only two cases of each were found among the farmers in the general survey. Fifty-one of the 87 farmers interviewed in the general survey hired daily paid male labor. (See Table 25) They average 33.22 man- days annually and pay b.75 shillings per day plus meals. Including farmers who do not hire any labor, the average is l9.b7 mandays. Seven- teen farmers hire an average of 30.12 mandays of female labor annually Table 25: Hired Daily Labor and wage Rates, General Survey, Midwestern Nigeria, 1963-64. Labor Number of Average Days of Hired Labor Average wage Type Farmers Hiring Farms Hiring All Farms Per Day Mandays per year w Men 51 33.22 19.47 n.75 Women 17 30.1 5.89 3.6 Children 13 33.38 4.99 2.65 .,.a. 3Delane Emil welsch, "The Rice Industry in the Abakaliki Area of Eastern Nigeria," (unpublished Ph.D. dissertation, Department of Agri- cultural Economics, Michigan State University, 196“), p. 106. “William L. Miller, "The Economics of Field Operations of the Stork Hand Hydraulic Oil Palm Press: Report to the Government of Nigeria,” Economic Development Institute, University of Nigeria, Enugu, l96u, p. 12. (Mimeographed.) 82 and pay an average of 3.6 shillings per day. The average for all farmers is 5.89 mandays. Children are hired by 13 farmers for an average of 33.38 days and are paid an average of 2.65 shillings per day. All farm- ers in the survey hire 5.0 days of child labor per annum. For the labor needs of a hypothetical government pregram subsidizing rubber planting, the farmers have available 1.9, 1.u and l.h men, women and children respectively. (See Table 26) The farmers participating in the input- output survey average 3.4 men, 1.8 women and 2.8 children working regu- larly on their farms, and h.3 friends who occasionally help on a cocpera- tive basis. Table 26: Average Number of Free Farm Laborers, Midwestern Nigeria, 1963 -& e Type Taxpayers Survey Input-Output Survey --------------- Individuals ---- ----- - ------- Men 1.9 3.“ Women 1.“ 1.8 Children 1.4 2.8 l Cooperative --- , 4.3 lNoequestion included. Capital Midwestern farms utilize very few tools -- only hoes, machetes, files, bicycles, baskets and knives. The hoe is the most important tool because it is the only one used to work the soil. It is constructed of a large flat pointed blade, usually about six inches across, attached to a 83 short handle about two feet long. Until.recently, the whole tool.was wood, but now the blade is iron or steel. Machetes are used to cut undesirable growth and files are for sharpening machetes. Bicycles are the primary means of transportation throughout Nigeria. Tree Crops Grown in Midwestern Nigeria . Rubber is the most common tree crop in Midwestern Nigeria. Of the 87 farmers interviewed, 78 own some rubber trees.. Every farmer interviewed in Urhobo, Benin and Ishan Divisions grows rubber. Sixty- nine also own plantain. Other important tree crops are cocoa, coconut, orange and banana. Significantly, only 17 farmers own oil.palm. Before Wbrld war II oil palm was the main source of income to Midwestern farmers, but rubber has almost completely supplanted it. Rubber Establishment Practices in Midwestern Nigeria Clearing and Planting First the farmer underbrushes each plot he plans to cultivate. Using a machete he cuts low growth, weeds, bushes, and young non—economic trees. Men and strong boys underbrush early in the dry season. (Table 27 shows the months during which farmers performed each major rubber growing Operation during the 1963 farming year.) An average of 23.5 mandays per acre are required for underbrushing. Ater underbrushing, men fell the large non-economic trees. Hired workers supply about half the labor. Just prior to the beginning of the rainy season the farmer and his family burn debris. (See Table 27.) One to two months are allowed to elapse between underbrushing and burning. 8h Two-thirds of all rubber farmers in the taxpayers survey inter- plant their rubber in arable crop land. Only 26 said they plant rubber. without first planting other crops on the same plot. Urhobo and Asaba Division farmers vary: some plant arable food crops first, others do not. The farmers of Aboh and Whrri Divisions clear specifically for rubber only. After planting arable crops, rubber is planted, usually in May, June or Ju1y.5 Table 27: Timing of 1963 Rubber Establishment Operations, Input- Output Survey, Midwestern Nigeria, l96h. Month Underbrushing Burning Planting weeding Plots - 1962 November 1 December 1963 January 1 2 February 3 1 2 March 5 3 3 April 1 7 2 May 2 June 7 3 J uly 3 5 August 3 September 1 October November h December 6 Volunteer seedlings found under mature rubber trees are the most common planting material. Sixty-eight farmers plant volunteer seedlings and of these, eight also plant some clonal seedlings. Nine farmers plant 50ne farmer planted in September because the ground was too wet earlier. 85 pure stands of clonal seedlings; none plant budded rubber. Of the 17 who plant clonal seedlings, 8 obtain them from the Ministry of Agri- culture and Natural Resources, u buy from the Sapele Rubber Estate and 5 obtain them from other farmers. The five who obtain seedlings from other farmers may not be planting pure clones. Volunteer seedlings are planted when they are one or two years old. Because the work is relatively light, childrencften pull the seedlings. The young plants are simply grasped near the ground and pulled out. Some farmers remove the seedling's leaves; others out back the stems; and the rest plant without removing any top growth. The seedlings are replanted by pushing them into a hole made with a cutlass or pointed stick. Only four farmers use a spade to dig the hole. Fifty-five utilize a stick and 1h employ a cutlass. Four farms ers plant seeds. Thirty-one farmers plant their rubber trees in rows rather than just planting wherever it seems convenient. No attempt was made to measure the spacing actually utilized; rather each farmer was asked to mark out the distances between plants and between rows so that the interviewer could estimate the distances by eye. (Table 28 shows the estimated planting distances and the corresponding densities.) The other 42 farmers plant haphazardly. The density of trees was measured in the input-output survey on sample plots in every farm planted before 1959. (Table 29 lists the average densities found on those farms.) The higher density on farms in the input-output survey is partially caused by the high densities on farms where the seedlings are planted haphazardly. 86 Table 28: Rubber Planting Distances Utilized by Fhrmers Planting in Rows, General Survey, Midwestern Nigeria, 1963-6b. Number Between Rows Within Rows Density of Farmers Feet Feet Seedlings per acre 5 - 9 5 - 9 540 - 1760 1 10 - 14 5 - 9 3A5 - 8&0 5 10 - 14 10 - 14 223 - #36 13 15 - 19 5 - 9 256 - 583 2 l5 - 19 10 - 14 180 — 290 1 20 - 24 5 - 9 202 - 438 3 20 - 29 15 - 20 91 - 110 l 30 - 39 5 - 9 193 - 290 2 370 Average Table 29: Actual Densities of Immature Farms, Input-Output Survey, Midwestern Nigeria, l96h. Farm Farm Number Average Density Number Average Density Seedlings per acre Seedlings per a5}; 1 --- 10 --- 2 -.- ll -.- 3 zzu 12 --- 5 321 in 290 6 u.-- 15 Ir.- 7 338 16 680 8 580 17 2&0 9 580 18 606 Mean 11:29 87 Maintenance Maintenance of rubber plots is at best irregular. Many farmers intend to weed more than one a year, but few weeded more than once in 1963. On the average, general survey respondents weeded 1.57 times a year for “.15 years. The farmers practice several types of weeding. The most common, slashing, consists of cutting the top growth of com- petitive plants without attempting to remove roots or stems. Another is complete weeding in which competitive growth is totally removed. Several published reports mention burning undergrowth in older rubber plots, but no instance of this was found in either survey. Burning was observed on several occasions, but inquiries always indicated that it was accidental, the fires having spread from nearby arable crop farms. Physical Inputs Required for Establishing Rubber Land To save expense, land was not measured for the general survey. Instead, the farmers simply estimated the sizes of their rubber farms by comparing their size to open areas in the vicinity of the place where the interviews were held. The enumerator would then estimate the size of the area which the farmer said was similar to the size of his farm. The farmers owned an average of 13.8 acres in h.“ plots. The acreage weighted mean planting year is 195“ and the unweighted mean planting year is 1955. Planting reached a peak in 1959 and 1960 and declined slightly in 1961, 1962 and 1963. Table 4 of Appendix E 88 shows the number of plots and.acres planted each year. In the input-output survey, on the other hand, land was actually measured.with compass and tape. The average farmer owns 10.5 acres of rubber in 6.1 plots. The average number of plots was higher than in the general survey because of a stricter application of the definition of "plot.” In both surveys, a plot was defined as a contiguous area all planted at once. But most farmers usually consider trees planted in successive years on adjacent areas as one plot. Undoubtedly, many reported some farms asea single plot when actually the trees had been planted in different years. The proportion of taxpayers reporting that they own some rubber was used to estimate the total number of rubber farmers in the Midwest and the total area of rubber. Given a taxpaying population of 173,000 in towns of less than 3,000 and given that 72.4 out of every 120 on the tax rolls own rubber, then 10h,556 rubber farmers live in the smaller communities of Midwestern Nigeria.6 Assuming that 10 percent of the 1952 male population of urban areas not covered in the survey own rubber in holdings the same size asrnn—urban residents (10.5 acres), the total number of rubber owners is 113,500 and the total acreage is 1,215,092 or approximately 1,200,000 acres. Expanding the 90 percent confidence interval of the mean, the six divisions surveyed contain 863,056 to 1,521,170 acres of rubber. The estimate of 1,200,000 acres is almost triple any previously published estimate. Two reasons explain the divergence between this 6See page75 for the estimate of taxpaying population. 39 estimate and previous ones. First, prior estimates are based on ex- ports and assume only a small untapped acreage. Second, other existing estimates simply update the 1958 Ministry of Agriculture and Natural Resource survey summarised in Table 20. Nevertheless, the estimate of 1,200,000 acres can be substantiated utilising export figures. The input-output survey farms average five acres of mature rubber of which half or 2.5 acres are tapped. Assuming that the entire rubber-owning population has five acres of mature rubber and taps 50 percent of it, then 288,“62 acres are tapped. Mulder es- timates smallholdings produced 109,000,000 pounds of rubber in 1963.7 m- viding production by tapped acreage, average yield is 378 pounds per acre, very close to the yield estimate of the input-output survey. Labor An average of 10“.“ manday equivalents per acre are required to establish rubber: 23.5 for underbrushing, 9.2 for felling, 11.6 for burning, 10.3 for planting and “9.8 for weeding.8 (See Table 30.) All 10“ mandays can be attributed to the costs of growing rubber when the farmer plants rubber alone. On the other hand, if farmers interplant their arab1e0m 689.90% MO odflo>ofi handedm oww0ho< Sea ooz Bea ...oz 34m ooz woeneeeena bopgoona popes—coma b38835 Egocma 3593.3 oops—HOSE WON tadehoflH mpmoo find H flomahoflH .mvmou find wvmoo g cocoa pceaaoo mom veueoaoom wooden mo.” Oneoaoem magnum . .1400." .eflavmwz snowmen; was wceiooam one coeffi— .ewnoo 0.5.6.3834 «cued hem mes—Sm 0°04 madcapoum uncensored-m deposed not ensues no code 63.58.81.3«333 doe 358.38 .8 cause 151 oo.owa on.me o om.me mom cocooem on.aam oo.om on.ac on.~e med cocoons oo.mam oo.ome on.aoe on.~a eocnnoo .nee ooe oo.oeo.e ae.ce o ae.ee mom neurone oo.oae.a ae.eoe oo.oe ae.ee woe eeeoeee oo.oon.e oo.oee mm.mea ee.ea ecennso .noe com oo.oom.a mm.o~ o mm.o~ mom seedeem om.mee.a nm.nme on.~ee an.o~ med essence oo.nme.e oo.oo~ ae.eae mm.o~ ocoenoo .noe ooo.e .mmmmlmmmjmmmmmmmmw ewoenoenm esuebem upon use use in 30.3 mmweaom H309 usedkm Hancock modem Hocoamem vacuum amen—nachos... $8.“ .383: queen-ass: .325 do. 313 333...»? "emmgofiHeam eureka-H 9:55.53 aged- 3 use. e55 e5 flwdeuch “mm canny 152 Table 5103 Revenues from Improved Smallholdings Yielding 800 Pounds Per Acre: Alternative Acreages, Prices, Costs and Processing Plants for Selected Years, Midwestern Nigeria. 1964. 5130 Prices 1:222 Processing E100 Processing of an! Revenue Plant Plant M Sam: 6 13 29 6 13 29 Shilli 3 Per Acre Shilli 3 Per Acre Five Current Residual Returns "05.0 876.3 676. 3 I . 70. 705.5 Acres Prices Labor Income 305.9 300.0 300.0 305.9 300.0 300.0 and Interest 99.0 70.10 10.1 65.2 146.2 2.7 Costs Net Revenue ~001.0 305.9 372.1 -296.6 399.3 002.8 Five 20$ Price Residual Returns 2.3 503.9 503.9 62.2 563.7 563.? Acres Decrease Labor Income 1015.1 360.0 360.0 1015.1 360.0 360.0 and Interest 91.3 60.7 3.8 72.7 51.5 3.0 20$ Cost Net Revenue -500.1 79.2 100.1 .026.6 151.2 199.6 Increase ~ Ten Current Residual Returns 108.2 739.3 739.3 102.8 773.9 773.9 Acres Prices Labor Income 3105.9 300.0 300.0 305.9 300.0 300.0 ani Interest 68.3 108.10 2.8 51.2 36.3 2.1 Costs Net Revenue -305.0 390.9 036.5 250.0 037.6 071.7 'ren 20$ Price Residual Returns 56.0 557.5 557.5 90.6 592.1 592.1 Acres Decrease Labor Income 015.1 360.0 360.0 9015.1 360.0 360.0 and Interest 75.8 53.7 3.2 58.7 01.6 2.0 20$ Cost Net Revenue 4.30.9 103.8 190.0 -380.2 190.5 229.6 Increase Twenty Current Residual Returns 1180.2 771.2 771.2 157.1 788.1 788.1 Acres Prices Labor Income 305.9 300.0 300.0 3105.9 300.0 300.0 and Interest 52.1 36.9 2.2 3010.2 31.3 1.8 Costs Net Revenue -257.8 0310.3 1069.0 -233.1 056.7 086.2 Twenty 20$ Price Residual Returns 87.0 589.0 589.0 100.7 606.2 606.2 Acres Decrease Labor Income 015.1 360.0 360.0 15.1 360.0 360.0 and Interest 60.2 02.7 2.5 51.7 36.6 2.2 20$ Cost Net Revenue -387.9 186.3 226.5 «362.1 209.6 200.1 RON I. 89 153 farm with the small plant, provides iil57/12/c-per. tapping Ian-year if the owner and.hisw£amily tap, and.it yields an.annual.incona.of i200/2/-.i£he hires tappers. Tax revenues and foreign exchange earnings per mature acre are #8 and £65 respectively. Improved smallholdings producing 800 pounds per-mature acre continue to earn high incomes even if prices fall 20 percent and.costs increase 20 percent. Only the combination of a five-acra.hclding with. the large processing plant.provides a negative discounted net revenue. and even it provides large annual incomes at maturity (#36 during the mature period). All other combinations earn positive discounted net returns. (See Table 55.) A farmer with 20 acres and the small processing plant has an income of i206/6/a when the trees mature if he hires tappers. If he and his family tap, they average t121/5/- for the five man-years.of tapping. Foreign exchange earnings per acre are high even with the decline in prices, 852, but tax earnings are less than £1 per acre. Improved Smallholdings Yielding 600 Pounds o, Because of low yields without corresponding declines in capital. costs, improved smallholdings producing 600 pounds are the least pro- fitable of the improved smallholder organizations. At current prices and costs, discounted net revenue is negative on a fiveaacre farm util- izing the E222 processing facility, even in spite of the fact that annual net revenues are actually positive by the time the trees mature. (See Thble 56.) Even though, relatively speaking, it is an unattractive.invest- ment, a five-acre holding with the large processing plant would provide. subsistence incomes to owners if they hired tappers and greater-than- 15“ NS 30; n3 n8; NR sand 81. om 8 m8 9: n8 .H me... man . m Name om i. new H3 is; :3 new .N 83 S aw mm: mm New?“ mm.” Rad mm“ 3 mm awn ma mam.a .mea mo~.~ code n «H .. 0mm .. mm man 3 $1} Nam» m unmohem nmmafinm pcoonom mi venous.” .Em Spam no Quechua Sued mo 3:3me Spam no somehow handgun omeohoe. Sex sex 83m .3. seem pea meanness...— oep—Boona pope—poems psggg .35333 34503.3 3503.8 N @3385 upmoo one . OH ooueonosH namoo one i380 use Rom poaeoeoen neednm no.” omeonoon meadnm ”sofa panned—o $3” .385 386.3 .3 gaseocnm use denim ..naeoo .oweoh04 sedans—head ~3¢em cusuem mo escehem mafiaaoem emeouo< seem eez Sea .3. seem sea masseuse...— veucsoonaa concnoondn .nepcmooeaa nepcsoondd .deucsooeda cepcsocemu ow neeeenocH memoo one ca consonocH numoo was npaoo ecu mom veneeuooa neoanm fiod peneeuoen neodpm ueoaum ucohnso .82 .3833 23.....sz , .358 mcunneoonm use apnea..neoaam .eemeena<.eua4enhepdd ne904 new encunm cow mcdcnvohm agendas-am peboaanH Scum nah—vex no 338 333913 panacea 33 En eHnea Table 58: Revenues From Improved Smallholdings Processing Cooperatively: Alternative Yields, Prices and Costs for Selected Years, Midwestern Nigeria, 1960. Yield Prices per and Revenue Source Year Acre Costs 6 13_ 29 W 600 Current Residual Returns 22.1 093.3 493.3 Pounds Prices Labor Income 305.9 300.0 300.0 and Interest 37.2 26.0 1.6 Costs Net Revenue ~36l.0 167.0 191.8 600 20% Price Residual Returns - 18.2 300.8 300.8 Pounds Decrease Labor Income 015.1 360.0 360.0 and Interest 00.? 31.7 1.9 201 Cost Net Revenue -388.6 -90.8 ~61.0 Increase 800 Current Residual Returns 51.2 682.2 682.2 Pounds Prices Labor Income 305.9 300.0 300.0 and Interest 37.2 26.0 1.6 Costs Net Revenue 257.5 355.8 380.7 800 20% Price Residual Returns - 1.1 500.0 500.0 Pounds Decrease Labor Income 015.1 360.0 360.0 and Interest 00.? 31.7 1.9 20% Cost Net Revenue «060.9 108.8 138.6 Increase 1,000 Current Residual Returns 80.3 871.1 871.1 Pounds Prices Labor Income 305.9 300.0 300.0 and Interest 37.2 26.0 1.6 Costs Net Revenue «302.8 500.7 569.5 1,000 20$ Price Residual Returns 26.0 600.9 600.9 Pounds Decrease Labor Income 015.1 360.0 360.0 and Interest 00.? 31.7 1.9 20% Cost Net Revenue ~003.8 253.3 283. Increase 158 Table 59: Discounted Net Revenues and Discounted Rate of Returns from Improved anallholdings Processing Cooperativear: Alternative Yields, Prices and Costs, Midwestern Nigeria, 1960. Discounted Yield Prices and Costs Net 11 Revenues Shillings Per Acre 1,000 Current Prices and Costs 3,693 20$ Price Decrease and 1,877 20‘ Cost Increase 800 Current Prices and Costs 2,237 20% Price Decrease and 096 20% Cost Increase 600 Current Prices and Costs 860 20% Price Decrease and -529 20% Cost Increase Discounted ’_ Rate of Returns Per Cent 228 109 162 33 73 -1 J and costs, private-processing five-acre farms producing 600 pounds per acre provide residual returns of 011.7 shillings per mature acre (large plant) or 080.0 shillings per acre (small plant), but with cooperative processing, residual returns become 093.3 shillings per acre. Whereas a fivemacre smallholding yielding 800 pounds per acre provides residual returns of 676.3 shillings per acre using a privatelyaowned £222 plant, it provides residual returns of 682.2 shillings if the rubber is processed cooperatively. On the other hand, when prices fall 20 percent and costs increase 20 percent, prim vate processing is more profitable than cooperative processing with any 159 combination of size, yield and processing plant. Conclusions At current prices and costs, improved smallholdings are very pro- fitable. During the years after the trees mature, improved smallholders who own five acres or more earn subsistence or more whether they tap or they hire tappers. Obviously, the larger the yield, the greater the pro- fits, but nevertheless, even the smallholder producing 600 pounds per acre earns an adequate income. Minimum discounted returns are 1.5 percent per annum. Government tax revenues exceed #6 per acre in every case and are as high as $10. Because of high processing costs per pound, cocperative processing is not as profitable as private processing for smallholders owning more than five acres; it is more profitable only for those who own five acres and either get 600 pounds per acre or produce 800 pounds of rubber per acre and own a large processing plant. Improved smallholders who produce 1,000 or 800 pounds per acre of rubber earn substantial incomes even if prices fall 20 percent and domes- tic costs increase 20 percent. Farmers producing 600 pounds must own 20 acres to earn a subsistence income if they hire tappers, but can earn sub- stantial incomes if they do not hire tappers. But investment in these farms is unattractive because discounted net revenues are negative. Govern- ment revenue from improved smallholdings is very low because presently the duty on rubber sold for less than 18 pence per pound is zero. Taxes could be increased substantially without deterring farmers from planting improved smallholdings. In conclusion, improved smallholdings planted with the expectation of yields of 800 pounds or more would be very attractive investments even 160 if the price of rubber should.decline. But such yields.are very difficult to achieve, particularly in a peasant smallholding industry. Smallholdings achieving yields of only 600 pounds will make.significant profits and in- comes as long as prices stay at current levels but if prices fall, the negative discounted net revenues would make investment in such a farm unattractive. CHAPTER IX CONCLUSIONS, RECOMMENDATIONS AND SUMMARY This dissertation has attempted to show how the economy of the Midwestern Nigeria rubber industry depends on uncontrollable factors (such as the world rubber market and the biology of the rubber plant) as well as controllable factors (such as the techniques of producing raw latex and saleable rubber, government taxation policies and cooper- ation among the rubber producers of Midwestern Nigeria). Chapter IX will draw general conclusions regarding the industry and make recommendations for government programs to improve the industry. Conclusions1 Ordinary rubber smallholdings no longer provide Midwest farmers with large incomes. At l96h prices and costs, they earn only £2 to £5 per mature acre. Owners producing ordinary lumps and sunwdried sheets, the most common products, average EB/h/u and é3/lu/a per acre respectively. Those producing high quality sheets either cooperatively or on a five-acre smallholding with privately-owned smokehouses and factories, earn approxi- mately fiZ/lOf— to £3. (See Table 60.) Farmers who produce highaquality sheets on 10: and ZOmacre smallholdings and process in their own facilities earn the largest incomes from rubber, an to £5. Oil palm production, the primary alternative to rubber production, probably provides approximately the same income as ordinary rubber pro— duction. The F. A. o. estimates that the ordinarysmallholder in the 1Data in this section were initially presented in Chapters III, VI, VII and VIII. Sources will not be repeated 161 162 ..Emnob semen no pceonom N. a.“ 3.0g Hogox use .3303 sen—5 -mo 9:3qu 0H ma Udefin H3 .maonnex Eden no men you :3 was due Edam mo mop hem mm» ”89“ 5” 85 muoonpotfl Putnam wagered: mo asoeha cm on 0» vegan... 93360.3 .3 @2500?" woefa Enema n} n: m: an in in in in $3 sin some: 33.83 peso new in min min a: a} Q- NT as n} 385 «8 as among woodman Guam n8.” 9% s\n 3n 8.. 2.. a- Q- Q- a- Q- .39 ...MMMM n3 NEH oi: £8 BURN SEN BEN «inn 3% .38 emsfisa tense amnohom mom 3.. 3.. 3. sin a: 3: e3 e3 sin 3... has: fin nQn .s\s n? in is ndm EN sin s\n 888 9355 SR s\n min Q s sQ n sin sin sin S Q- sexes 380 . pad nR- NEH SEA S\Nn n\~n n\~n n\~n flan {mm 33 essences meets , I + I a nmnonom peony—.6 33055. $5085 nonegm “was meue< mouo< moped wan poonm nag moscobom mamoo mo . no no .336 cm mud on we.“ m wan Immoeoum p35 has: 93 mpgom mean—om mgom 33000.5 1330.5 Immoooum 05.x: gm tango moownm 8n; coed osm.~ 3.2.2.— 325». 3.5a Lessee 50m." .edhomnz nuances—pd: ..namom. one meonum convenes: «Edam was penned mo donaoaponm Sponges—m .5335 Eon.“ momez one 20:30 3 3.393— 6839 .3.»qu owefioufl amazon “ob capes 163 Midwest and west earns about éB/15/- per acre from palm production, almost exactly the amount earned by the rubber smallholders producing lumps or sun- dried sheets. (See Table 61.) Because palm.yie1ds are estimated to be higher, income from palm in Eastern Nigeria is estimated to be th/4/-, an income onlyobtained by a rubber producer if he makes sheets on a 10- or 20-acre smallholding. The crucial determinantscf the future of Nigeria's natural rubber industry is the declining world market price of rubber and increasing Nigerian production costs. For the first time in the Twentieth Century, the price of rubber has declined during a period of world economic expan- sion. Between 1960 and 1963, the annual average New York price of R~S.S. I sheet fell 12.2 cents, and is expected to decrease still further to about 20 cents. A New York price of 20 cents would mean a decline of 20 percent or more from 196h prices in Nigeria. In addition, over the past decade, Nigeria has experienced a sharp inflation, about #0 percent between 1953 and 1962. If rubber prices were to fall 20 percent and the costs of domestically produced inputs were to increase 20 percent, the incomes of rubber small- holders would be less than subsistence. Rubber farmers will only earn il/lZ/a producing sunadried sheets and tl/9/- producing ordinary lumps. Smallholders utilizing 10 acres of rubber (the average size of a small- holding) would not even receive a subsistence income. Only production of clean lump in a reorganized market would provide as much income as palm production. According to estimates based on the F. A. O. calculations, palm production will pay between t2/13/- and EB/lj/a per acre if domestic costs increase. lower rubber prices and higher production costs will probably cause ordinary smallholders to gradually shift to the production 164 A) ..En -En ..Ees ..Ia A a.m.: -\~H\na -\n\na -\e\om -\HH essesH msesso seen «on , was moonmm $58 448 ..TD 0Q- e33 ease none emeohoea conga 4&8 43% 443 -\..\Nn essence smashed esteem mom a\w\m I\w\m t\l\mH I\n\ma meme: {SEN Andes Amisn -\nQn~ 282m 22.5 Jam -\ 4nd .\ {S .73 mass mamoo use ----u...acafls...\.§:- --Hmm s - am.-- has. as... .3... see. ouo< hem ono< mom omo< mom eyed mom modmobom mumoo menace coon season 88 358 82 season can e5 g esteem some .mvnoo new moonmm .eomd .edhowaz anovnesfifiz obnpemaopa< ”each new monnnm mo convoseomm novaonaauam nobougaH aomm memes use mmommo op mmmnpem .moxma .mmmdmnem omnemoxm :mnemom "Hm manna 165 of palm.unless.somewexternal stimulus encourages them to produce improved rubber or palm. Improved Smallholdings The-Governmentaof“Midwesterneligeria.considers,improved,rubber.and palm production as logical replacements for ordinary rubber production. In its l96h-68 Development Plan,.Midwestern Nigeria.allocates.tl.h million to increasing rubber production, more than is allocated to any other agri- cultural commodity, over one-third of the allocation for primary production and almost 6 percent of the Plan's total allocation.2 The Midwest also will invest about £900,000 in oil palm production and lesser amounts in cocoa, cotton, tobacco and food crops.3 This chapter evaluates the implications of allocating more funds to rubber than to oil palm. Four criteria.are used} addition to gross domestic product, tax revenues, owner's income and amount of employment. The primary objective of the 1964-68 Development Plan is to increase the rate of economic growth or, in other words, to increase the gross do- mestic product.“ Thus, a primary criterion for distributing funds between oil palm and rubber is their relative contributions to G. D. P. ' A second objective is to increase government revenues. The develop- ment of’Mfldwestern Nigerianwill require large expenditures by the Regional. Government. Inevitably, it will be difficult to obtain sufficient funds for development. In the Midwestern Nigeria Development Plan of l96h-68, the,Government allocates i2h.6 million, but at the time the Plan was.pub- lished, the Government lacked over one-third cfthe total allocation.5 2Midwestern Nigeria, Midswestern Ni:eria_ I velo-ment' ;,_ Benin City: Ministry of Internal Affairs, Printing Division, 3mm. “Ibid., pp- 34% 5m.. p. 61. 166 (Thus, Government tax receipts will be an important factor in distributing funds between oil palm.and rubber. Ultimately, the objective of any development program is, of course, to raise the income of people. So a third criterion for evaluating planned expenditures is the owner's income generated by the.alternative commodities. It should be realized that both government and private investment promote growth. While taxing personal income may augment government's investment capacity, it lowers private capacity to invest. No conclusion can be drawn here about the Plan's allocation between the Government and private sectors: only the owner's incomes generated by the two commodities will be compared. Finally, an explicit objective of the Plan is to provide as many ”... employment Opportunities as is consistent with the rapid growth of the economy, ...“6 The writers of the Plan, while clearly perceiving that employment and development may be competing objectives, still place develop- ment as the primary goal. This study does not judge when greater employment hampers development; only the employment gained from alternative programs will be estimated. As mentioned above, the first criterion is the comparative contribution of rubber and oil palm to gross domestic product. Because they are both ex- port crops, the net addition of oil palm and rubber to G. D. P. is their free on board value (f.o.b.) less the cost of imports required for their production. Assuming that the values of imported inputs in rubber and oil palm production are approximately equal, the f.o.b. values alone can be used to compare addition to G. D. P. The 1964 f.o.b. values of rubber produced on smallholdings yielding 800 and 1,000 pounds per acre are :65 and t81/5l- respectively. The 1963 f.o.b. value of palm products from an acre producing 6%., p0 3e ...) 0‘ “.3 9,000 pounds of bunches is £é8f5/9 and the f.o.b. value of palm products from a smallholding producing 8,000 pounds of bunches is $60.7 Thus, with 1963o6h prices, rubber provides at least as much per acre as palm to the economy, if the smallholders produce 800 pounds per acre or more. But if rubber prices fall 20 percent, the f.o.b. value of rubber produced on an improved rubber smallholding yielding 1,000 pounds would be $65, approximately equal to the f.o.b. value generated by a palm smallholding producing 8,000 or 9,000 pounds of bunches. A rubber smallholding which yields only 800 pounds provides only £52, considerably less than plam smallholdings. Hence, in the longarun, rubber smallholders must maintain yields of 1,000 pounds per acre to provide as much to G. D. P. as palm smallholders. Assuming 1964 prices and taxes, palms contribute approximately twice as much per acre to taxes as rubber smallholdings yielding 1,000 pounds. Tax earnings from improved palms yielding 8,000 pounds of bunches per acre are approximately £19 and from a smallholding yielding 9,000 pounds of palm bunches are fiZlflO/e. But rerenues from one acre of improved rubber producing 1,000 pounds are only iiO. If rubber prices were to fall 20 percent, tax revenues would only be about ti unless the tax structure is revised. The third criteria is farmers earnings. Farmers producing 800 and 1,000 pounds of rubber on a tenmacre mature smallholding earn EZB/IB/a and £30/12/= per acre respectively. Improved palm smallholdings yielding 8,000 and 9,000 pounds of bunches provide incomes of tlB/IB/a and £20/19/a 7(The 1965 f.o.b. palm prices are considerably higher than the 1963 prices, but the 1963 prices are assumed to be more representative of the long-term market.) 168 respectively. If rubber prices were to fall 20 percent_and.Nigerian in- put prices were to increase 20 percent, rubber smallholders producing 800 and.l,000 pound. would earn :11 and szo/éle respectively. and pain smallholders would earn 217/18/- and il9/2/o from producing 8,000 and 9,000 pounds.of bunches respectively. Thus, at 1960 prices, rubber smallholdings provide larger incomes than palm smallholdings, but if rubber prices were to decline 20 percent, only rubber smallholdings yielding 1,000 pounds would provide higher returns. .The final objective of the Development Plan is employment. Rubber production requires considerably more labor than palm production. Whereas mature oil palms requires about 16 manmdays per acre per year, rubber requires about 75 manadays per acre per year. As a result, when gross revenues per acre are equal, rubber provides a smaller taxable residual because.of higher labor costs. At 1964 prices, only improved rubber smallholdings producing 1,000 pounds per acre could be taxed more than improved palm.smallholdings without lowering owner's income below the amount earned producing oil palm. Thus, at 1964 prices, improved rubber smallholdings yielding 1,000 pounds provide greater returns to the economy and owner, more employment and less.tax revenue than.improred palm smallholdings producing 8,000 or 9,000.pounds of bunches per acre. Rubber smallholdings yielding 800 pounds.provide.about the same addition to G. D. P. as palm, but the distribution of these returns is quite different. The owners of rubber smallholdingsyielding 800 pounds receive approximately $9 more income per acre and utilize about 60 more man-days of labor annually. The Government re eives greater tax revenues from palm production. Because 169 under 1964 conditions, the total addition to the economy is the same, the choice between rubber yielding 800 pounds and palm may be based either on the income for farmers and tappers or on the Government's tax receipts. 0n the other hand, assuming a rubber price decrease of 20 percent with rubber yields of 1,000 pounds, the situation changes. Palm and rubber production contribute approximately the same amount to G. D. P.. but rubber production provides.smaller tax revenues and greater returns to the owner and laborers. Rubber smallholders producing 800 pounds could earn greater amounts and considerably add to the economy by changing to oil palm. Only employment from rubber would be greater. Thus, with 1964 prices, investment in rubber would probably provide at least as large an income to the ecoomy as oil palm and has the potential for providing considerably more than palm production. But assuming a 20 percent price decrease, only the largest yields would provide returns to the economy and the farmers as high as those.received from palm small- holdings. Also Government revenues from the highc-yield rubber would be considerably less than those derived from palm production. Hence, under a decreased price, rubber investment is preferable if yields of 1,000 pounds or more can be achieved. By investing more in improved rubber proa duction rather than in improved palm production, the Government, in effect, is expanding rural incomes and employment at the cost of higher tax receipts. Recommendations The Midwestern Nigeria DevelOpment Plan 196ba68 assumes that im« proved rubber smallholdings will prod ce 1,000 pounds of rubber per acre and that the rubber will be processed into high quality sheets.8 'As 81bid., p.8. 170 indicated above, these assumptions must be fulfilled if the investment in rubber rather than oil palm is to be justified on economic grounds. Excellent planning and administration of the Government's programs will be necessary in order to achieve the goal of 1,000 pounds per acre. Such a product requires: (1) planting of clonal seedlings with high potential yields, (2) excellent.planting-and maintenance practices, (3) proper tap- ping and (h) careful"processing. Rubber Rehabilitation Scheme The Midwestern Nigeria DevelOpment Plan 1964-1968 includes a Rubber Rehabilitation Scheme for subsidizing smallholders planting improved rubber. In order to grow trees which are capable of producing 1,000 pounds per acre, the smallholders must plant selected materials, plant at the recommended depth and distances, prune the seedlings properly and maintain them during their immaturity. Because most smallholders are totally inexperienced with these practices, intensive training and close supervision will be required if the program is to be successful in achieving yields of 1,000 pounds. The Development Plan indicates that staff for carrying out the total program of the Ministry of Agriculture and Natural.Resources will be in short supply during the plan period. The Ministry will require 20 more agricultural officers and 507 more agricultural assistants and agricultural superintendents than are available or in training.9 Un- less more are trained, the Ministry will probably be unable to adequately train and supervise the farmers participating in the rubber rehabilitation 9Ibid., p. 67-68. 171 scheme and 1,000 pound yields may not be achieved. Rather than reducing farmer training and supervision, this study recommends that the Ministry consider reducing the acreage targets. It is also possible that the Ministry will find that its budget allotment is-inadequate to carry out the planned rehabilitation program. The Ministry intends to subsidize the farmers #20 per acre to replant 15,000 acres, but only $271,515 has been allocated in the Plan for the purpose}0 Moreover, the F. A. O. estimates that the in-kind subsidy alone will cost about £90 per acre, :10 more than the total cash and kind subsidy allocated in the Development Plan. If adequate subsidies, cannot be given, this study recommends that the Ministry consider re- ducing the acreage targets rather than reducing the subsidy. The Development Plan does not make clear if the Ministry of Agri- culture and Natural Resources intends to supervise maintenance of the rehabilitated smallholdings. The traditional practice is to infre- quently weed immature rubber plots, usually once a year. Additional weeding is not essential because so many seedlings are planted that a sufficient number of trees survive to maturity. Because of the high cost of improved seedlings, their planting density is much lower; infrequent maintenance might result in too few mature trees. The small- holder cost of the improved seedlings approaches the cost of the ordinary seedlings, so that without supervision smallholders may not weed often enough. Furthermore, disease control requires regular inspection of the seedlings, but most smallholders can neither identify nor treat diseased seedlings. This study, therefore, recommends that regular in- pection of immature plantings be carried out to determine if the seedlings 1°M' 9 P' 8' 172 are weeded regularly and if they are diseased. The probability of achieving yields of 1,000 pounds would be greatly enhanced if the Ministry of Agriculture and Natural.Resources were to distribute seedlings with higher potential yields. The Ministry dis- tributes the older improved seedlings developed.before world Whr II with potential yields of under 1,500 pounds per acre, (PB 86 x PB 2#, TJir l x Tjir 16 and Tjir l selfed). Clones are under study in Nigeria which may yield considerably more. As soon as sufficient information is obtained about their behavior, these seedlings should be distributed. Nucleus and Government Plantations In addition to rehabilitating smallholdings, the Midwest also plans to establish both nucleus and ordinary plantations. .The trees on nucleustm plantations are eventually distributed to their workers as private small- holdings whereas ordinary government plantations remain a single unit. The nucleus plantation is an effective way to train and select smallholders and to achieve the yield target. On the other hand, because nucleus plan- tations cost considerably more than rehabilitation, the Government cannot establish very many. Full fledged Governmentaowned plantations provide greater income to the Government than any other organization, but have very little impact on the rural economy. Tapping and Processing Rehabilitated Smallholdings The longeterm success of the Rubber Rehabilitation Scheme requires more than simply insuring that the trees are properly planted and maintained. The quality of tapping, collecting and processing is also critically important. Customary tapping procedures, if used on improved smallholdings, have four 173 flaws: (1) cuts are often too deep to permit regrowth of the bark: (2) cutting away too much bark shortens tapping life; (3) because the trees are not tapped at the angle which opens the most vessels, yield is lessened and (h) too frequent tapping.causes diseases. Smallholders practice these methods on their ordinary smallholdings either because they do not realize their damage or because the techniques increase short-term.yields. Because Nigerian peasants know very little about the internal structure of the rubber tree, they do not realize that by rem071ng the entire surface of the tree down to the woody center, they prevent regrowth and retapping of the bark. Similarly, smallholders do not know that the latex bearing vessels of the trees spiral up the tree counteroclockwise from left to right at an angle of approximately 65 degrees from horizontal so that, to cut the most vessels, the tree should be tapped by cutting downwards from left to right at an angle of 25 degrees. Only training and experience will teach smallholders the benefits of tapping preperly. Tappers maximize their returns by tapping daily as many of the highest yielding trees as possible. In order to tap many trees, they seem to tap quickly and carelessly, removing too much bark. A shortened economic life of the tree and panel disease result. Because mature trees are plentiful on ordinary smallholdings, intensive tapping of a few trees until their yields are reduced by disease or their bark re- moved is probably sensible. When the yield on one tree begins to decline, another can replace it in the tapping cycle with only a small loss in total production. But because of the relatively high cost of improved 17“ trees, these.practices would be extremely costly if utilized on rehabili- tated smallholdings. Trees on improved smallholdings are used much more intensively over their life; once mature, they are tapped continuously. Disease would reduce overall yields because no trees are.available to replace diseased trees in the tapping cycle. Similarly, if the available bark on a tree were consumed, new trees would not be available. Thus, tapping would have to be carefully supervised to assure the highest yields over the life of the trees. Intensive supervision would not be necessary once the farmers realised that maximizing their short-term gains will lower their long-run earnings, but this would take several years, probably until the farmers tap the panels for the second time. Proper collecting will also be required to successfully carry out the Government's plans. High quality rubber, preferably R.S.S” I sheets, must be produced on improved smallholdings if high incomes are to be earned. High quality will require the use of manufactured cups rather than snail or coconut shells, clean pails for transporting the latex to the collecting point or factory and the use of anti-coagulants to prevent premature coagulation. If the smallholders collect carelessly, the latex will be contaminated with dirt and may coagulate into lumps. Fragrams to encourage farmers to use recommended tapping and col- lecting techniques should either reward the use of proper techniques or, alternatively, penalize those who ignore recommended procedures. Adequate price differentials for varying quality latex would motivate the small- holders to produce clean uncoagulated latex. But tapping is not so easily influenced because shortuterm earnings can be enhanced by using poor techniques. Because tapping does not significantly influence the quality 175 of the product, only the economic life of the trees, some essentially artificial means must be found for rewarding proper tapping. A subsidy payment would be the most direct, but very difficult to administer. An alternative would be a supervised loan scheme. Most smallholders have to buy cups and pails. Possibly the threat of foreclosure of the loans would be sufficient to motivate owners to tap properly. Such a program would have many of the same administrative problems as a direct subsidy, but appears to be the best alternative. Intensive supervision and training will be needed if such a program is to be successful. Processing must also be expertly carried out or the quality of the resulting product will be poor. The factories and.smokehouses must be adequately designed, built, equipped and operated.‘ Because the small- holdings being established by the Ministry are only six acres, it will not be feasible for each smallholder to own a processing plant. Some system will have to be implemented in which all the improved smallholders of a village participate. Four alternatives appear to be the most likely: (l) a cooperative factory and smokehouse, (2) a privately—owned processing unit, (3) a Governmentncwned and operated processing plant located in the village or (h) purchases of the liquid latex for processing at a centrally located factory. The criteria for evaluating the alternatives must be quite similar to the ones already developed earlier in this chapter: to maximize G. D. P., to increase Government revenue, to maximize perSOnal incomes and to pro- vide additional employment. Maximization of G. D. P. requires production , of the highestapriced products, thin crepes and R.S.S. I sheets. Tech- nically skilled rubber processors are scarce. In order to get the maximum 176 amount of production under skillful supervision, processing in centrally located plants where the latex is brought by tank-truck would be preferable. Increasing personal incomes does not lead to any clear conclusions because no individual group (i.e., farmers, tappers, middlemen, etc..) has been specified. If the total income of all groups is to be increased, then the criteria implies increasing the export value of the rubber or producing the highest quality possible. Reduction of Government costs suggests substituting private capital for Government capital. Cooperatives would require less Government capi- tal than any other organization because the farmers would provide most of the labor for building the factory and smokehouse. Government-owned processing plants would entail the greatest public cost. Private ownership would be intermediate, because it would probably require Government loans. Employment will be greatest with privately-owned processing units in each village. Cooperatives would probably provide somewhat less employ- ment, because the smallholders themselves would supply some labor. .Cen- trally located processing units would probably require the least employment. Before electing to organize processing in one of the above suggested methods, each must be studied in detail. In addition to the criteria out- lined above, costs, manpower requirements and technical feasibility must be considered. The Malaysian experience Should also be investigated. It is recommended that the Ministry of Agriculture and Natural Resources immediately initiate such a study. Product Quality Throughout this study it has been argued that Nigeria and Midwestern Nigeria lose potential income because of the low quality of Nigerian rub- ber exports. Translating this statement into monetary terms, if the Region 177 could increase the value of 30,000 tons of rubber by 5 pence per pound, total returns to the Region would increase kl.h million. This is equivalent to increasing annual income of each man, woman and child in the Midwest by about 10 shillings. Because the Midwest rubber producers do not receive higher prices when they produce better qualities, they have no monetary incentive to produce the better qualities. 0n the contrary, they can increase their returns by adulterating the lumps. The processors' price differentials for quality paid to the dealers are too small to be translanted into price differentials for the producers. In addition, Nigerian producers have no consistent set of grades for lumps or techniques for grading. The system used by the processors depends on the actual rubber content of the lumps, which cannot be determined without actually processing the lumps into crepe. It is recommended that the Government of Midwestern Nigeria develop and publicize a rubber grading system. The system should be related to the actual quality of the crepe sheets manufactured from the lumps, should be relatively easy to apply and should not require complex ex- pensive equipment. Furthermore, it is recommended that the Produce In- spection Service again inspect and grade all the rubber produced in the region. It is hoped that if produce inspectors actually sort the lumps into different grades then higher prices will be paid for the higher grades. And in turn, the dealers should be willing to pay higher prices for lumps which they know are better. Grading will cost very little per pound of rubber. Assuming that the average weight of a lump or sheet is 2 pounds and the Midwest produces 50,000 tons, then Midwestern Nigeria produces 56,000,000 lumps and sheets 178 annually or 187,000 lumps and sheets per day in 300 working days. If an individual produce inspector can grade a lump or sheet in 30 seconds, he can then grade 480 lumps or sheets in an eight-hour day. Thus, 195 0 men would be required to inspect the entire rubber output of the region. Allowing an additional 5 supervisors, a total of 200 employees could probably inspect the entire product. Assuming an average salary of £500 per annum, the total annual cost is £100,000 or approximately 0.22 pence per pound. ' After an interval of two or three years, if the quality composi- tion of Nigerian exports has not imprdved, the Midwest should consider taxing the lowest quality products. Taxing of low quality exports has contributed significantly to the increased quality of Nigerian palm product and cocoa exports. These taxes, applied by the Marketing Boards, helped to motivate Nigerian smallholders to produce the highest quality. In only a few years, almost all the produce was of the highest grades. Summary The objectives of this study were: (1) to provide a description of the techniques of ordinary rubber production, (2) to determine the relative profitability of the various organizations now extant, (3) to evaluate the impact of falling world market prices on the profitability of ordinary smallholdings as they are now organized, (a) to evaluate the profitability of farms planting highnyielding trees under alterna- tive price and cost assumptions and (5) to suggest methods for imple- menting change in the rubber producing industry. 179 (1) Technique was described in Chapter VI. (2) All existing organizations of ordinary smallholdings provide either subsistence income (£30 per acre from a 10 acre farm) or slightly more to the farmer at 1964 price levels. The most profitable is the production of sheets processed in privatelyaowneed factories and smoke- houses and the least profitable is the production of ordinary lumps and sun-dried sheets. The average farmer earns £36/7j- annually if he hires tappers to produce sun-dried sheet from mature trees and t32/6/- if he hires tappers to produce ordinary lump. (3) If prices fall and domestic costs increase, the profits and income from current methods of producing rubber will fall_to very lowb levels, subsistence from private processing and less than subsistence from ordinary lump and sun-dried sheet production. As a result, the industry as it is now organized may disappear. (h) Production of rubber using highéyielding plants and pro- ducing highmquality sheets provides substantial incomes presently. Farms achieving only 600 pounds per acre will not be profitable with ‘any size organization budgeted in this study if prices fall. But a farm producing 800 pounds per acre on ten acres or 1,000 pounds on five acres will provide substantial incomes and rates of returns. At 1963a64 prices and costs, improved oil palm production is not as profitable as owning an improved rubber smallholding yielding 800 or more pounds per acre, but if rubber prices decline 20 percent and costs increase 20 percent, only rubber smallholdings with yields of 1,000 pounds will provide larger incomes than palm production. The foreign exchange earnings of a rubber smallholding producing 800 pounds per 180 acre and a palm smallholding producing 9,000 are equal at l96h prices, but if prices fall 20 percent, then.yields of rubber must be 1,000 pounds per acre to match the total earnings from palm. Thus, if prices decline 20 percent, only rubber smallholdings producing 1,000 pounds per acre return more to the economy and their owners than palmzsmall- holdings producing 9, 000 pounds per acre. (5) It is recommended the Ministry of Agriculture and Natural Resources provide the necesarry physical inputs, instructions and super- vision to insure that the rehabilitated smallholdings have the capability of producing 1,000 pounds per acre. If it is found that the required labor and financial resources are not available, then it is suggested that the acreage targets be reduced. To insure that the yields are ob- tained and the high quality sheets are produced, it is suggested the Ministry of Agriculture and Natural Resources supervise maintenance and disease control and provide for the supervision of tapping and processing. The first rehabilitated smallholdings will not be tapped for h or 5 years. The intervening period can be used to study alternative organizations of processing the rubber produced on the rehabilitated smallholdings. Finally, to increase the quality of rubber exports, it is recommended that the Government of Midwestern Nigeria develop grading procedures and have them implemented by the Produce Inspection Service. If grading a- lone is not satisfactory for increasing the quality of Nigerian rubber exports, it is recommended thatathe Government consider imposing a dis- criminatory tax against the poor quality rubber exports. APPENDIXES 181 182 APPENDIX.A AN INTRODUCTION TO RUBBER PRODUCTION This appendix provides the general reader with sufficient background to understand the production of rubber and enable him to compare peasant and plantation techniques. It discusses the composition, sources and production of rubber. The productive methods described are the recomp' mended ones. The estates in Nigeria generally adhere to them, but the smallholdings do not. Smallholders techniques are described in Chapter VI. Natural Rubber Production The Nature of Rubber Rubber is the coagulate derived from latex, the white milky juice of certain plants.1 The primary constituent of rubber, the hydrocarbon iscprene (C538), gives it resilience and elasticity. Isoprene units are arranged in a long chain called polyisOprene (05H8)n where n is an.indefi- nite but finite number. Each plant species producing rubber contains * different proportions of polyisoprene. The latex of the tree 3:13; brasiliensis, the chief commercial source of natural rubber, contains over 90 per cent polyisoprene. Raw rubber is not pure, but contains many substances including hydrocarbons, sugars, inorganic compounds and resins. 4L__ I V 1For a more complete description of rubber and its production the reader may consult thethree works which provide the material for this appendix. J. J. Ochse and others, Tro ical and Subtro ical A iculture Vol. II (Nsw'York: The MacMillan Company, 15815, pp. 923-993, Loren G. Polhamus, Rubber (”world Crap Books," London: Leonard Hill (Books) Limited, 1532;, and M.J. Dijkman, Hevea (Coral Gables, Florida: University of Miami Press, 1951.) 183 Crude rubber before vulcanization is a soft, elastic material which is brittle when cold and sticky when hot. It melts at appromimately 300 degrees fahrenheit. It can be shaped into useful products such as erasers and shoes, but will not maintain these shapes permanently, particularly if subjected to heat.‘ Vulcanization, the application of heat to a mdxp ture of sulphur and rubber, gives rubber a permanent shape which can only be altered by cutting.‘ The preperties which make natural rubber useful commercially are (brasion resistance, elasticity, electrical insulation and impermeability to gases. __§gzgg_§g;§iligg§i§ - The Rubber Tree Description, Source and Adaptation Hevea is a member of the Spurge family. Other economically'impore tant members of the family are tung,candlenut, cassava and castor bean. Hevea is a mediumpsized tree, 10-20 m. high, with robust, glabrous branchlets and containing much milky juice. The leaves are alternate, long-petioled, trifoliolate, and glabrous. The petiole is thin, green, and 3.5-30 cm. long. The leaflets are shortstalked and elliptic-oblong or obovate-oblcng: the base is narrow and acute: the apex is acuminate: individual leaflets are entire, pinnatinerved, dark green above, lighter colored and glaucous beneath, 5-35 cm. long, and 2.5-12.5 cm wide. The inflorescence is axillary and lateral, stalked, lax, paniculiform, mam-flowered, and shortly pubescent. ,. The. . flowers are unisexual-monoecious, small, and light yellow.2 The fruits are large, compressed, obtusely three-lobed, rarely four-to six-lobed, 3-5 cm. in diameter, and separating .into three, four, or six tw0dvalved cocci: the pericarp is coriaceous, the endocarp woody; The seeds are large, quad- rangular-ovoid, compressed on one or two sides, shiny, frayish or pale brown colored, with irregular darkAbrown dots and blotchgs, and are 2-3.5 cm. long, 1.5 cm.broad, and 1.5-2.5 cm. thick. 2Ochse and others, Op, cit., p. 930. Brad... 1:. 931; 1814 Wild gevea brasiliensis is found in the Amazon Valley south of the Amazon River in Brazil, Mata Greece in Bolivia and inthe Madrede Dies area of Peru. The Amazon'Vallqy is a periodically flooded regiontbut the other two are well-drained upland areas.“ Hevea is commercially grown in the lowlands between 10° north and~ 10° south of the equator with the best areas within 6° of the equator. Rainfall between 75 inches and 105 inches is ideal although.rubber.has been planted in areas with as little as 60 inches and as much as 230 inches.5 Rubber grows best where the rainfall is evenly distributed‘with 100 to 150 dqys of rain per annum and at altitudes less than 600 feet. "Hevea possesses a strongly developed, widely ramified root system and requires deep, fertile, permeable soils for its best growth. In A particular, the physical condition of the soil must be good, either natup rally or made so artificially through such measures as drainage, irrigation, erosion control, cover crepe, and aid plants."6 Cultivation of MW7 PlantingiMaterials Three alternative materials are used to plant Hevea, unselected seed- lings, clonal seedlings, and budded stumps. Unselected seedlings are grown from.seeds of unknown.parentage. They are highly varieble in growth and t‘l’olamus, cp, cit., p. 65. 50chse and others, Op, cit., pp. 9&8-9h9. 512ml. p. 950. 7The three works listed in footnote 1 above and personal observation in Nigeria provide the material contained in this section.. . D. J 03 \ii branching characteristics, and are low in yields. Unselected materials usually yield 300 to 500 pounds per acre per annum. Early in this century a technique for the vegetative prOpagation of rubber was discovered. Most plantations use this technique, called budding. Buds from the bark of a mother tree are implanted in the bark of young seedlingS. The bud becomes the upper portion of the tree, and the seedling or root stock provides the roots. A clone is the progeny of a single mother tree. Plantings of budded stumps of a single clone are highly uniform in growth, yields and disease resistance. Table l. The fields of Selected Planting Materials, Malaya. Planting Material Inland Estates Coastal Estates =— - Pounds Per Acre -------------- Pre-War Clones Seedlings 1127 (26)1 937 (11) Budded 885 (38) 1085 (no) Post-War Clones Budded lh29 (22) 1214 (’40) _ Source: H. M. Burkill, "Large Scale Variety Trials of fievea WMuell-Arg. on Malayan Estates 193M153," Journal of the flbber figseggch Institute of Malaya, XVI. (1959), p. 314. Standard deviation in parenthesis. Clonal seedlings are grown from the seeds of a single clone or the cross of two clones. They are not as uniform as budded seedlings although much more uniform than unselected seedlings. The performance of seedlings from different clones varies considerably, some approach the high yields of budded plantings: others are only slightly better than unselected seedlings. 186 Culture Whether planting budded stumps, clonal seedlings, or unselected seed- lings, it is necessary to germinate. seed. The seed bed should be made. of 'well-tilled crumbly topsoil and should be shaded. The seeds are half covered with dirt when planted. Nigerian planters use the older method'cf placing the seeds flat side down and slanting although it is no longer ‘ recommended. After two to three weeks the germinated seeds are trans- planted to the nursery or the field. The nursery is constructed in an area where rubber or other vegetation (such as cassava) susceptable to similar diseases have not recently been grown. The soil should be clean, friable and rich. It is mounded into beds one foot high and one to two feet wide. The height of the bed depends on local drainage conditions. The soil when broken deeply permits the~ v unimpeded growth of tap roots. The arrangement of the seedlings in the nursery depends on their intended use. Seedlings which will be transplated without budding are usually planted in rows one foot apart with one footv» between the seedlings. Seedlings to be budded are planted in double rows 12 to 18 inches apart with 12 to 18 inches between the seedlings. The pairs of rows are separated by paths two to three feet wide. The budwood nursery is usually placed near the root stock nursery. Budwocd grows from budded stumps. The bud grows until it is four or five feet long and then is out for its buds. The stump of the cut bud sprouts again as a source of future budwood. ‘ When the root stocks are about eight feet tall, they are ready for budding. Two parallel cuts about an inch apart and one and a half inches long are out vertically into the bark as close as possible to the root crown. 187 A third horizontal out Joins the tap of the cuts. The bud is removed by cutting underneath it and removing a piece of wood along.underneath the bud. The wood is removed and the cambium.layer of the bud and stock aligned. The rootstock's flap of bark is pulled over the bud. Strips of banana leaf, waxed cloth or plastic are wrapped around the bud to hold it in'place. After two or three weeks the wrapping is removed to see if the bud is still alive. The bud.will remain.dormant until the root is stumped. Once the bud is sprouted the seedling can‘be transplated to the field. Preparation of the planting site begins during the rainy season just prior to planting, in Nigeria about August 1. The first step is to deter- mine the area-and to mark out the blocks to be planted. Usually rubber is planted in square blocks of no acres with access roads running between the blocks. Blocking shOuld be finished by the end of the rainy season so~ that underbrushing can be started at the beginning of the dry season. Underbrushing consists of cutting the smaller growth with cutlass or machete and placing it in piles between the future rows. In Nigeria under- brushing starts around November 1 and should be completed by February 1. Sufficient time should be allowed after underbrushing to permit the refuse to dry thoroughly before the rains begin. After underbrushing, trees are felled with axes or chain saws. Felling should be carried out so that the trees fall between the future rows rather than across them. Only the trees growing directly in the row need be moved if felling is done prOperly.‘ Usually all stumps except those growing directly in the row are left in the ground and poisoned to prevent future regrowth. Just prior to the beginning of the rains, the dry refuse is burned. The primary purpose of burning is to retard weed canpetition'hy killing the 188 'weed seeds and plants remaining after underbrushing. Herbicides may be used instead of burning. After burning, the cover crap is planted. Usually cover creps are planted by spreading a mixture of soil, fertilizer and seed on the ground. The two cover crops most commonly used in Nigeria are antrgggma,pubg§ggng and Puezggi; phageoloide . On at least one older Nigerian plantation the cover crop was allowed to die and volunteer rubber seedlings left to replace it. Once the rains are regular, the rubber seedlings can be safely trans- planted to the field. Before tranSplanting, lining, pegging and holing must be carried out. ‘With the use of chain and prismatic compass the lines are first marked out. Pegs are placed in the lines to mark the spot to be occupied by each seedling. A holing team digs a hole at lease one foot square and 18 inches deep at each peg, making the field ready for planting. In Nigeria, rubber is usually planted between.May 1 and July 15. Be- fore May 1, the rains are not regular so that drought may kill the seedlings. After July 15, the intensity of the rains declines and weed competition increases. If seedlings are to be planted, either as root stock for future field budding or as clonal seedlings, their stems are out back so that only brown bark remains on the stem. The tap root is out to about 18 inches and the side roots pruned to four to six inches to facilitate handling and. planting. The stump is placed in the hole with a mixture of rich tap soil and fertilizer. The dirt must be carefully tamped around the root stump to avoid air pockets. Planting density and layout varies according to the custom of the area. Unequal spacing is usually preferred as it facilitates the production of 189 intercrOps, the movmaent of large equipment and crown growth. A spacing of 30' x 7' is recomended by the Midwestern Nigeria Ministry of Agriculture and Natural Resources, but most experts agree this spacing is too extreme.~ Usually 10' x 20' or 12' x 22' is preferred. Four operations are carried out after planting: fertilizing, pruning, supplying and slashing. Fertilizer requirements vary with soil and climatic conditions, but generally it is agreed that fertilizer is only necessary for young plants. A number of plantations in. Nigeria fertilize only the first and second years after planting. During the period after transplanting undesirable btxi shoots are pruned; later branches must be pruned. Seedlings may develop several bud shoots,‘.. - but all except one should be pruned. Budded stumps often develop several shoots from the root stock necessitating pruning. Once the tree is well established, all branches below eight feet on the stem should be pruned so . they don't interfere with tapping. .. a . Plants that fail to grow after transplanting are removed and new“: plants supplied. During the first two years, all vacancies are filled: later: only spaces of three or more dead plants in succession can be replanted. Seed- lings in the outer positions will not be able to compete with their larger neighbors so only the center positions are filled. e- . Slashing of the growth between the rubber tree rows should be carried out on a regular basis to prevent the weeds from retarding the growthrofu the trees. Most plantations slash the cover crap and .weed aroundthe base of the trees about once a month. 190 Teppins Tapping is initiated when the tree has a girth of 18 to 22 inches three feet from the grouml or bud union. Because the trees of a single planting reach this size at different times, tapping does not start until a certain number of trees are tappable, usually 50 or 70 percent. Only trees large enough are tapped; the remainder are tapped when they reach the minimum size. Latex flows in tubes called latex vessels extending up and down the tree. They are concentrated near the base and the cambium and are scat- tered towards the periphery. Tapping attempts to out these vessels so the latex flow is maximized and damage is minimized. The yield of a tree is correlated with the number, shape and size of the latex vessels. Unselected seedlings have eliptical and budded trees have cylindrical vessels. Generally budded trees have more vessels than seedlings. The number and shape of the vessels are more uniform among the budded trees than among clonal seedlings and in turn the vessel of clonal seedlings of a single family are more uniform than unselected seedlings. Tapping consists of cutting off a thin strip of bark about one six- teenth of an inch wide. The out should be deep enough to sever most latex vessels,butnot mdeep that the cambium is injured. It is made horizontally around the tree. Typically, but not necessarily, half the circumference is tapped. Alternative systems tap onemthird, onewquarter, twomthirds and three-fourths of the circumference. The area above the present tapping site where the bark has been removed. is called the tapping panel. The tapping panel should be smooth and have a constant width. 191 Chief among the causes of failing to achieve the potential yield of a tree are injuries resulting from overtapping or imprOper tapping. Overtap- ping is the too frequent tapping of the tree. It causes the vessels and surrounding bark area to die, the first synptom.of which is a reduction of latex.production and sonetines the couplets cessation of flow. Eventually the bark turns a brown color, hence the name of the disease, brown‘bark. The tree nmst be taken out of production until the wound.heals and the bark returns to normal. ImprOper tapping techniques also can cause a reduction in output. The depth and angle of the—cut determine the number of vessels which.will be cut. If the structure of the tree is not well understood there is a- tendency to cut too deeply into the tree induring the cambium. It is camp biun.which provides the cells for the regrowth of bark after tapping.- If the cambium layer is completely or partially removed, scar tissue fouls making future tapping of the area impossible or extremely difficult. If tapped carefully a given area can be tapped two or three times. The angle of the cut is also very important. Given a cut of a cer- tain length, it is desirable to sever as many vessels as possible. Research has shown that on the average the vessels spiral around the trunk upwards from left to right at an angle of 65 degrees from the horizontal. In order to maximize the number of vessels severed, the out should be per- pendicular to the vessels or downwards fron.left to right and 25 degrees from the horizontal. Other important determinants of yields are the time of tapping, sharp- ness of the knife and the amount of bark removed. Early morning hours are best for tapping because the turgor pressure and hence the flow of latex is 192 greatest then. If the latex flows too slowly it coagulates at the surface of the cut preventing further flow. If a dull tapping knife is used, the vessels are not sliced but torn crushing the walls of the vessels together and impeding the flow. Latex flow steps when the vessels become plugged with coagulatum.‘ To renew the flow, it is necessary to remove the scrap of rubber adhering to the cut's surface and to cut off a thin strip of bark. Not only does the coagulate rest on the surface of the cut, but each vessel has a small piece of coagulatum in its tip acting as a stepper. Removing the scrap of rubber causes some latex to exude because some of the stoppers are removed. Cut- ting the bark Opens up the remaining plugged vessels. The more bark cut at each tapping, the faster the bark is removed from the tree and the shorter the tapping life of the tree. The total time an area can be tapped depends on the frequency of tapping and the amount removed each time. Removal of three centimeters per 20 tappings is considered normal. Tapping systems are classified according to the period (continual or periodic), frequency (daily, bidaily, or tridaily) and length of cut (one-‘ quarter, onemthird, one-half or wholeocircumferance). The recommended and most common system on Nigerian plantations is alternate daily, half- circumference, continuous tapping. A tapper can tap 250 to #00 trees a day. If alternate daily tapping is used, then he taps two stands of 250 to #00 trees each. Because of rain, holidays and an annual rest period of two weeks, tappers work less than 300 days a year. Since each stand is tapped every other day, each tree is tap- ped about 150 days per year. 193 The tapper begins his round at dawn. Normally it takes one to two hours to complete tapping. He carries a pail.for collecting the scraps torn from the previous days out, a knife, spouts and cups. A few drOps of an anti-coagulant, ammonia, sodium sulfite or soda solution, are left in the cup if there is a danger the latex will coagulate before processing. After completing the tapping round, the tapper returns to the beginning, pours the latex into a pail, collects the spout and cup, and moves on to the next tree. After collecting, each tapper takes his days product to a collecting station where it is weighed and recorded. As soon as all tappers finish their work, the latex is transported by tank truck or wagon to a factory for processing. Processing At the factory, the latex is pumped through strainers into holding tanks where it is diluted to the proper concentration for coagulating, 15 percent rubber for crepe production and 20 percent rubber for sheet pro- duction. Holding tanks, tank truck,pipes, screens, stirrers and valves are made of a noncorrosive material such as aluminum, stainless steel or con- crete lined with glass. From the storage tank the latex is piped to coagulation tanks. These tanks may be stationary or portable and vary in size from country to country, but they are always rectangular boxes open at the top approximately 10 feet long, 15 inches deep and two to three feet wide. After the latex is poured into the tank an acid is added which causes the latex to coagulate. Formic, acetic, sulfuric or sulfer dioxide can be used. After adding the acid, panels are inserted which separate the tank into compartments an inch and a half wide, 15 inches deep and two to three feet long. After coagulation is 191+ completed, slabs of rubber having the dimensions of the compartments are ready for milling. Two types of rubber sheets can be manufactured, ribbed smoked sheets (R.S.S.) and crepe sheet. Ribbed smoked sheets are made by passing the slabs through a battery of three to five mills. Each mill consists of two smooth iron rollers set a small distance apart. They are similar to the mangles set over wringer-type laundry washers, but the rollers have larger diameters. As the rubber slab passes through each successive mill it becomes thinner: because the gap between each set of rollers is smaller. The last mill, called a printer or marked roller, has ridges running diagonally around the rollers. After passing through the printer, the sheet has a ridged ssurface. Crepe rubber is made by passing the slabs through a battery of rollers with diamond-shaped studs on their surface. The rollers move at different speeds so that they tear the sheets into small lumps and knead them together. As the sheets pass through successive machines, the lunps become smaller arr! smaller giving the crepe a rough, but continuous, surface. Crepe sheets are about three feet wide and six feet long. Ribber smoked sheets are smaller, about two by three feet. After milling, both crepe and ribbed sheets contain 20 to 30 percent; water which must be removed. Surface moisture is removed by pre-drying crepe in a temperature of 93° F and sheets in 131° to 140° F or by hanging the rubber outside. The rubber is then. placed in. ovens. Crepe ovens are heated by forced air kept at 102° F with controlled hmidity. It requires about eight days to dry crepe in a modern oven. Ribbed smoked sheets are preserved by smoking and drying for four days at 122° to 140° F. 195 ' Most plantations produce more than one product. They utilize liquid latex to produce ribbed smoked sheets. and. scraps to. produce. estate crepe. Other products are sole crepe, concentrated latex (produced in Nigeria), sprayed rubber, rubber powder and earth rubber. Costs of Rubber Production The cost of producing rubber is between 8 and 19 cents (U. 8.) per pound. Ronald Ha estimated that for some thirty 'dollar companies' in Malaya during the period 1947 to 1958 that the cost per pound varied between 9 and 19 cents.8 Speakers at a symposium organized by the International Study Group in 1962 said costs on an estate producing 1,500 poundsper- acre are 12 to 15 cents and the minimum cost for such an estate is 8 cents.9 About 140 percent of all costs are for collection, processing and dish patch. Upkeep and cultivation take another 15 percent of expenditures. " General expenditures, which comprise depreciation, head office and adminis- trative expenses, amount to 30 percent of all costs. Duties and cess make up the remainder. Table 2 reports the results of three studies of the relative sizes of costs. Labor costs are over 50 percent of total costs. Collection, processing, diSpatch, upkeep and cultivation are almostf'complete- 1y labor costs. These two categories amount to 55 percent of total: costs'. 8Ronald Ha, "Commnv Profits and Prices in the Rubber Industry in Malaya, 191L768," Malayan Economic Review, IV (October 1959), p.18. ' 9F. W. Hibbert, ”A Review of the World Trade in Rubber," TroEical Science, V (1963), p. 112. ' 196 Table 2. Importance of Cost Items in Producing Rubber, Malaya. Cost Item Ma Bauer Malayan Mission of Inquiry Percent— — — Collection, Processing #1 1+1 ‘48 and Dispatch Upkeep and Cultivation 11 17 121 Duty ani Goes 17 10 -- General Expenditure 27 -- +- Depreciation - 1+ 33 30 Sources: Ronald Ma, "Company Profits and Prices in the Rubber Industry in Malaya," M_a_lgan Economic Review, IV (October 1959), pp. 29-30: P. T. Bauer, The Rubber gusty London: The London School of Economics and Political Science, 19 , p. 271; Charles F. Phillips, Jr. , Competition in the %thetic Rubber Industry (Chapel Hill: University of North Carolina Press, 1 1 , p. l 1. 1Plant u’pkeep included in general charges. It is generally agreed in the literature that there is little relation- ship between plantation size and cost. Analysis of 138 firms no larger than 5,000 acres shows a nonsignificant correlation between size and costs.:Lo Ma found a correlation of +0.20 between size and costs for 36 dollar firms in 1956.11 Ma also found that there is little relationship between price and output . 12 In summary, labor is the most important cost in rubber production. In the immediate future, it will not be possible to reduce labor input absolutely. Introduction of high yielding planting materials can reduce the average unit 10P. ‘1‘. Bauer, The ubber Indust (London: The London School of Eco:- nomics and Political Science, 19% , p. 272. “Ht. melt... p- 31. ”Bid.“ pp. 332-333. 197 cost of labor about 35 percent, but it will still represent over halt..0f total costs. Land costs will reduce almost in prOportion.’ Savings of. 60 percent of general charges per unit and 65 percent of cultivation costs per unit are achieved through the use of high yielding clones.13 Grades of Rubber The world rubber industry uses two sets of grades for natural rubber. Grade distinctions are made on the basis of cleanliness, quality of curing, mold and rust content. The Nigerian industry uses Malayan grades rather than the Rubber Manufacturers Association grades. The major weakness of both systems is that they are based on visual characteristics rather than technical ones. Wet, bleached, under-cured anduvirgin rubber and rubber that is not completely visually dry at the time of bwer' s inspection is not acceptable. (Except slightly under-cured rubber as specified for No. 5 and No. 6 R88). Skim rubber made of skim latex shall not be used in whole or in part in the production of any grade. Nothing but coagulated rubber sheets, properly dried and smoked, can be used in making these grades; block, cuttings or other scrap or frothy sheets, weak, heated or burnt sheets, air dried or smooth sheets not permissible. No. II RSS The grade must be produced under conditions where all processes are carefully and uniformly controlled. Each bale must be packed free of mould but very slight traces of dry mould on wrappers or bale sm-faces adjacent to wrapper found at time of delivery will not be objected to provided there is no penetration of mould inside the bale. ”Charles P. Phillips, Jr., c etition in the he is b as (Chapel Hill: The University of North Carolina Press, 1 l , p. 1 2. 198 Oxidized spots or streaks, weak, heated, under-cured, oversmoked, opaque and burnt sheets are not permissible. The rubber must be dry, clean, strong, sound and evenly smoked, and free from blemishes, specks, resinous matter (rust), blisters, sand, dirty packing and aw other foreign matter. mull pinhead bubbles, if scattered, will not be objected to. No Official International Sample has been established for this grade. No, 1 ES Each bale must be packed free of mould but very slight traces of dry mould on wrappers or bale surfaces adjacent to wrapper found at time of delivery will not be objected to provided there. is no penetration of mould inside the bale. Oxidized spots or streaks, weak, heated, under-cured, oversmoked, Opaque and burnt sheets are not permissible. The rubber must be dry, clean, strong, sound, and free from blemishes, resinous matter (rust), blisters, sand, dirty packing and any other foreign matter, except slight specks as shown in sample. Stall pinheadebubbles, if scattered, will not be objected to. No, 2 RSS Slight resinous matter (rust) and slight amounts of dry mould on wrappers, bale surfaces and interior sheets, found at time of delivery will not be objected to, pro- vided these conditions, either singly or in combination, do not exist to an objectionable extent onsand in more- than 57: of the mam of bales included in the delivery, lot or tender as determined by the number of bales inspect- ed. mall bubbles and slight specks of bark, if scattered, will not be objected to. Oxidized spots or streaks, weak, heated, under-cured, oversmoked, Opaque and burnt sheets are not permissible. The rubber must be dry, clean, strong, sound and free from blemishes, blisters, sand, dirty packing and all other foreign matter other than specified above as permissible. 199 NO, 3 RSS Resinous matter (rust) and dry mould on wrappers, bale surfaces and interior sheets, found at time of delivery will not be objected to, provided these conditions, either singly or in combination, do not exist to an objectionable extent on and in.more than 10% of the number of bales included in the delivery, lot or tender as determined by the number of bales inspected. Slight blemishes in color, small bubbles and small specks of bark permissible. Oxidized spots or streaks, weak, heated, under-cured, oversmoked, Opaque and burnt sheets are not permissible. The rubber must be dry, strong and free of blemishes, blisters, sand, dirty packing and all other foreign.matter other than specified above as permissible. No, a RSS Resinous matter (rust), dry mould on wrappers, bale surfaces and interior sheets, found at time of delivery will not be objected to provided these conditions, either singly or in combination, do not exist to an objectionable extent on or in.more than 20% of the number of bales included in the delivery, lot or tender as determined by the number of bales inspected. Medium size bark particles, bubbles, translucent stains, slightly sticky and slightly over-smoked rubber are permissible to the extent shown in the sample. Oxidized spots or streaks, weak, heated, under-cured, oversmoked (in excess of the degree shown in the sample), Opaque and burnt sheets are not permissible. The rubber must be dry, firm and free of blemishes, blisters, sand, dirty packing and all other foreign.matter other than specified above as permissible. No RSS Resinous matter (rust), dry mould on wrappers, bale surfaces and interior sheets, found at time of delivery will not be objected to provided these conditions, either singly or in combination, do not exist to an Objectionable extent on or in.more than 30$ of the number of bales included in the delivery, lot or tender as determined by the number of bales inspected. 200 Large bark particles, bubbles and small blisters, stains, oversmoked, slightly sticky rubber, and blemishes are per- missible of the amount and size shown in the sample. Slightly unier-cured rubber permissible. Weak, heated, burnt, oxidized spots or streaks NOT permissible. The rubber must be dry, firm, free of blisters, except to the extent shown in the sample, dirty packing, sand, and all other foreign matter other than specified above as .per- miscible. No, 6 ES Resinous matter (rust), dry mould on wrappers, bale surfaces and interior sheets, found at time of delivery will not be objected to provided these conditions, either singly or in combination, do not exist to an objectionable extent on or in more than 35$ of the number of bales included in the delivery, lot or tender as determined by the number of bales inspected. Exports of Nigerian.Rubber 1893-1963 201 Appendix B Year Quantity Value Price less Esssds_§iszlias. Esssds_22£_222 1893 no gligible1 1894 negligib1e1 1895 2.320.001 1896 3,067.001 1897 2,230.001 1898 2,050,0001 1899 1,560,0001 1900 1,271.27 185,528 145.94 1901 863.59 121,674 140.89 1902 454.04 56,217 123.82 1903 584.43 77,398 132.43 1904 1,193.92 181.952 152.40 1905 . 1,390.12 247,635 178.14 1906 1,533.16 307,076 200.29 1907 1,269.56 244,988 114.20 1908 545.63 98,529 180.58 1909 619.65 109,075 176.03 1910 1,175.80 311,691 265.09 1911 966.20 179,353 185.63 1912 705.00 125,021 177.33 1913 510.72 89,995 176.21 1914 166. 47 38, 854 233. 26 202 Iear Quantity Value ,, Price less W W -1915 248.42 38,112 153.42 1916 395. 68 34, 192 86.41 1917 392.09 32,350 82.51 1918 157.38 19,667 124.97 1919 398. 25 43, 903 110. 24 1920 491.91 57,044 115.96 1921 85.19 10, 248 120. 67 1922 124.25 14,377 115.71 1923 213.58 21,221 99.26 1924 522.11 52,437 100.43 1925 950.21 108,234 113.91 1926 1,594.19 203,143 127.43 1927 1,997.12 256,020 128.19 1928 2,294.21 255,771 111.49 1929 1,974.05 163.684 82.92 1930 2,177.31 150,326 69.04 1931 1, 821. 36 71. 319 39. 16 1932 845.41 31,362 37.10 1933 1,007.29 33,089 32.85 1934 1,612.76 44,488 27.59 1935 2,058.89 51,572 29.91 1936 2,172.72 90,137 41.40 1937 2. 573.21 126.055 ‘$.99 1933 3.135.25 135.797 l8.33- 203 Tear Quantity Value Price 1232 .Zsssde_§is:lins. 222222.2221122 1939 1940 2,903.00 1941 2,055.00 1942 6,668.00 1993 7. 366.00 1944 1945 10,518.57 1946 11,488.00 1,404,000 122.21 19“? 7.10145. 00 627.000 90.93 1948 8,019.00 719,000 89.66 1949 6,858.00 591,000 86.18 1950 13,652.00 2,834,000 207.59 1951 20,856.00 7,483,000 358.79 1952 18,331.00 4,138,746 255.78 1953 21,260.00 3,286,522 154.59 1954 20,397.00 2,848,933 139.67 1955 30,329.00 5,566,859 183.55 1956 38,032.00 6, 382,422 167.82 1957 39,946.00 7,012,201 175.54 1958 41,130.00 7,617,019 185.19 1959 53. 352. 00 11, 602, 402 217. 47 1960 57,167.00 14,241,223 249.12 1961 55,054.00 11,010,145 199.99 204 Year I Quantity Value, ‘ Price 1292 W W 1962 59,635.00 11,355,880 190.42 1963 63,209.00 11,781,911 186.40 M. _ Sam»: was. mu... by A. c. um. (um: rh- Gem-out Print». 1:. 159 . WW. compiled in the Chief Secretary' s Office Lagos: The Goverment Printer, 1929). p. 247: WM. 110:! in the Chief Secretary' s Office Lagos: The Government Printer, 1933 x J. M. Mackie, Director Agricultural Department, "Rubber Grouting." Memorandum No. 2961/ DA/252, May 25, 1939, p. 1, File No. 141451 "Rubber Industry in the Cameroons and.Nigeria," I, National Archives, Ibadan, p. 146; U. S. Department of culture, Econuic Research Service, Mia, (Washington, D. C.: - 1 (Lagos: Federal Ministry of Comerce and Industry, December, 1962), . p.11; Federation of Nigeria, Annual bs acts of Statistics 1 0 , (Lagos: Federal Office of Statistics, 1 0 p. 35: Federation of Nigeria, W III-VII. (December. 1962). pp. 169-170: 1.42% W, Second Edition; London: The Crown Agents for Overseas Govern- ments and Administrations, 1954), p. 3011»; Federation of Nigeria, m W, XLVIII, (December 1963); Cuthbert Christy, African Rubber net and Ma c (London: John Bale, Sons and Danielsson, Limited, 1911' g, p. 10."" ML! 1Approximate because estimated from a graph. APPENDIX C QUESTIONNAIRES Sma holder Rubbe Surve Interviewer Date No. of Males Village Council No. of respondent Division Province 1. Name of respondent Dead Idving elsewhere Away temporarily What is. your tribe? Edo Emmi Urhobo Ijaw Other (specify) _ Itsoko Ibo Yoruba Itsekiri Ibw many years education have you had? 0 1 2 3 4 5 6 7 8 9 10 11 12 13 How Old are you? Do you grow most Of the food you eat? Yes No Is a portion of your income earned by selling agricultural products? Yes No Do you grow a cash crop which is not hearing yet? Yes No Ib you row those crops yourself (not with your father or your senior brother 7 Yes No If all four answers were No or if last answer was No, stop here. 205 6. 206 What crops do you grow? Which do you consume yourself? ‘Which do you sell? Gum: Consume Sell Rubber Cocoa Oil palm Coconut palm Mango Orange Grapefruit Lemon lime Plaintain Banana Pew-paw Yam Cassava Coco-yam Beans Peppers Bitterleaf Other (specify) New many acres do you farm? 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 New many plots do you.farm? 0 1 2 3 4 5 6 7 8 9 10 8. 10. ll. 20? Suppose the government sponsors a scheme for rubber planting. The scheme requires that the participating farmers provide all the necessary land and labor and some of the money. How many acres of land could you provide in plots of 5 acres or more for new rubber plantings? O 5 10 15 20 25 30 35 For cutting down old stands and replanting? O 5 10 15 20 25 3035404550 How many family members could help you plant and care for the rubber? Men 0 1 2 3 4 5 6 7 8 9 10 Wbmen O 1 2 3 4 5 6 7 8 9 10 Children 0 1 2 3 4 5 6 7 8 9 10 How much money out of your own savings could you invest in a high yielding plantation? % If the farmer indicated in question 6 that he has no rubber, stop here. If he does have rubber, continue on. What are the sizes of your farms? (enter in table) How old are they? (enter in table) How long ago were they first tapped? (enter in table) Are they being tapped now? Why not? (enter in table) Size No. of Age First Tapped Tapped NOH' Why Not (acres) Trees (years) (years) (yes or no) . No tapper ' Tapped out Tbo young . Other (specify) irkahoba O \OGJVO‘AMPUNI-J 13. 14. 15. l6. 17. 18. 19. 208 How many family members help you with your farming during periods of much work? Men 0 l 2 3 4 5 Wbmen O 1 2 3 4 5 Children 0 l 2 3 4 5 In 1963, did you hire anyone to help you.farm? Yes No Time Salary Men Wbmen Children Are all your farms planted on communa1.lands? Yes No If not, list those that are owned by farmer using numbers in left hand column of table. 12345678910 Did you clear and burn the land for your>youngest farm especially for rubber or did you plant the rubber after using the land for a food crop? Especially for rubber Food crop first On the last farm.you planted did you dig a large hole with a spade or a small one with a stick for the seedlings? Spade Stick Did you plant your newest farm in rows? Yes No If yes: How far apart are the rows? 8 9 10 ll 12 14 16 18 20 21 22 H w far apart are the seedlings in the row? 45678910 Do you weed your rubber farms? Yes No How many times one year after planting? 1 2 3 4 5 6 How many years? 1 2 3 4 5 6 Ind.you interplant your last planting with any other crop? Yes No 20. 21. 22. 23. 24 . 209 What crepe? Yams Cassava Banana Plaintain Coco -yams bans Other (specify) How many years did you interplant? 1 2 3 4 5 6 7 8 What planting materials did you use when planting your youngest farm? Where did you get them? How much did they cost? Source Cost Ordinary seedling Clonal seedling Budded rubber Mixture Doesn't know fhve you ever manuned your newest rubber farm? Yes No How often? At what age? What type of fertilizer? How much? live you ever seen mould on a tapping panel? Yes No How do you treat it? No treatment? Other (specify) Do you or one of your family tap your farms? No Owner Son Brother Father If not, why not? How many tappers who are not family members are you employing today? 012345678910 25. 26. 27. 28. 29. 210 What are the terms of the agreement with your tapper? Wages wa many shillings per day? Per gallon of latex wa much per gallon? 50-50 share of all rubber produced 50-50 of sheets with lumps to the tapper Haw many more tappers would you.like to hire? 0 1 2 3 u 5 6 7 8 What was the production of your farms in October, 1963? Pbunds of lump Number of sheets Production thus far in 1963? Pbunds of lump Number of sheets If no lump was sold in 1963, skip on to question 30. Do you put any foreign matter in your lump or roll them on the ground? Yes No Why do you.do that? What price do you receive for lump now? 1/2 3/u 1 11/u 11/2 13/u 2 21/u 21/2 23/u 3 31/u 31/2 33/4 4 What are the lowest and highest prices you received this year? 1/2 3/n 1 11/u 11/2 13/4 2 21/u 21/2 2 3/‘+ 3 3 1/4 3 1/2 3 3/4 4 What month did you receive the highest? Jan. Feb. March April May June July Aug. Sept. Oct. Nov. 30. 31. 32. 211 What month did you receive the lowest? Jan. Feb. March April 15y June July Aug. Sept. Oct. Nov. Do you receive a louver price when the lumps are very dirty? Yes No What price now? If no sheet was sold in 1963, finish here. Do you own your own rollers and smokehouse? Yes No If no, whose do you use? Cooperative (Name) Another farmers - What does he charge you? Other (specify) Do you belong to a processing cooperative? No Yes - Name: What price are you now receiving for your sheets? What is the highest price you have received this year? Which month? Jan. Feb. March April May June July Aug. Sept. Oct. Nov. What is the lg53§t_price you have received this year? Which month? Jan. Feb. March April May June July Aug. Sept. Oct. Nov. 1. Smallhglgers Rubber Survey - II Owners Questionnaire Background b. Farm labor How many workers do you hire full time? 0 l 2 3 4 5 6 7 8 9 10 How much do you pay them per month? What meals do you provide? Breakfast Lunch Dinner 11) you give these workers free housing? Yes No How many men in your family help you with your farm? 0 l 2 3 4 5 6 7 8 11: you ever give them money for working? If so, how much per day? Yes No g If you don't usually eat from the same pot, do you give them meals? Same pot No. of meals Breakfast Lunch Dinner How many women in your family help you with your farm? 0 1 2 3 a 5 6 7 8 Do you ever give them money for working? If so, how much per day? _ Yes No is If you don't usually eat from the same pot, do you give them meals? Same pot No. of meals Breakfast Lunch Dinner How many children in your family help you with your farm? 0 1 2 3 L» 5 6 7 8 11) you ever give them money for working? If so, how much per day? Yes No ‘5 212 Ce d. f. g. 213 If you don't usually eat from the same pot, do you give them meals? Same pot No. of meals Breakfast lunch Dinner How many friends help you.with your farm on a cooperative basis? 0 1 2 3 1+ 5 6 7 8 9 10 How many plots of arable crop did you.grow in 1963? 0 12345678910 How many plots did you plant to rubber in 1963 ? 012345678910 How many plots do you.awn or control which had no crop on them in 1963 (were in bush)? Do you have any permanent crops except rubber? How much did you plant in 1963? 126:} Planting No. of No. of No. of No. of Growing Acres Trees Farms Acres Trees Farms Cocoa Palm Kola Bananas Plaintain Grapefruit Orange Have you bought any land? Yes No How much did it cost? % wa many acres was it? When did you buy it? Have you.any land obtained by pledge? Yes No When did you receive it? 19 How much was the pledge? B How large was the farm? Plots: Acres: 2. 214 h. Has any land in the village been sold? Yes No To a stranger? To a local man? (Sold for permanent occupancy) lbw much was paid most recently? How much land was sold? t Acres Plots i. When is it necessary to ask the elders' permission to plant rubber? Only when planting on communal lands Never Always How often have you been refused permission in the last 3 years? 0 1 2 3 4 5 6 Prepang land for 1963 rubber farm (a) When did you clear and burn the rubber farm(s) you planted in 1963? 1961 Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 1962 1963 (b) How many people helped to clear the land? How many days did it take? What did you pay? Unpaid Labour Hired labour 3.91122; 9212 $02.1; mm. En. kn. hall Men Women Children (c) How many people helped to fell the trees? How many days did it take? Unpaid labour Hired labour 3.11m; 21a Esau NEW—r g1; Ease. Yale Men Women Children (d) How many people helped to stack and burn the land? How many days did it take? How much did you pay? Unpaid labour I-hred labom' Number Days als Number myg Egg; 2321; Men Women Children 3. 215 Planting of rubber in 1963 (a) Did you plant seeds or seedlings? Seeds Seedlings If seeds - did you use a nursery and then transplant? Yes - No (b) Did you plant (replant) the seedlings whole with the stem cut or with the leaves removed? Whole Stem cut leaves removed (c) During which month did you plant rubber in 1963? Jan. Feb. larch April by June July Aug. Sept. Oct. Nov. Dec. (d) How much labour was required to pull and plant the seedlings (gather and plant the seeds)? What did you pay? Unpaid labour Hired labour Number Total M 331; 39222}: Total my; Wage Mealg Men Women Children Maintenance _ (a) In 1963 how many times did you weed your rubber farms planted since 1958? Which months? How many people helped? How many days did it take? What did you pay hired labour? Planting year Month weeded Type weeding (slash, ring, row, complete) Paid labour Men Number 5. 216 Wbmen Number Days Children Number Days Ta ping (a How many different hired tappers worked for you in 1963? (b) When did each come and leave? New was he paid? wa many trees did you give him to tap? Tapper Mbnth started mpump—s Mbnth 13;; Payment Trees (1 1/2 all rubber) (2 1/2 sheets all lumps) (3 hire out - é) 217 (c) How many family members tap on your farm? (include owner) Mamas. W263. Pa nt Ere—ca 172 all rubber) (1 (2 1/2 sheets all lumps) (3 hire out - i) 4 No payment) UC'WNl—l (d) What anti-coagulant do you use? Soda ash, crystallised soda Sodium sulfite liquid ammonia Doesn't use anything Doesn't know Tappers buy How much did you buy in 1963? How much did it cost? When did you last buy some? Month Year How much did you buy? How much did it cost? How long will it last? 6. Processing (a) With what do you coagulate your latex? How much did you buy in 1963? How much did it cost? When did you last buy some? Month Year 7. 218 lbw much did you buy? What did it cost? lbw long will. it last? (b) Do you: 1. 2. 3. 4. Roll on smooth roller? Roll with a bottle? Roll on wooden mangling machine? Roll on marked roller? (c) Do you: 1. 2. 3. 4. Smoke in a smokehouse? Smoke in the kitchen? Sun dry? Sell wet sheets? (d) What equipment do you rent? How much does it cost? 1. 2. 3. Cost per sheet per month Plain roller lhrked roller Smokehouse (e) Do you belong to a rubber processing or marketing cooperative? Yes No What is the name? When did you join? lbw much did it cost to join the processing cooperative? What does it cost to use the cooperative? How many of the following tools do you own? How often must you replace them? What do they cost? General Purpose Tools Number Cost Replacement lbes (Native) Spades Cutlasses Knives Bicycle Saw Axes Others 219 Rubber Growing Tbols Number Cost Replacement Tipping knives Buckets Cups Snail Coconut Tins Manufactured Others Rubber Growing Tbols Plain roller IHarked roller Strainer Pans Files Others Tapper Questionnaire NAME: 1. Tb what tribe do you belong? Bini Ibo Urhobo Ijaw Ishan Afenmai Isoko Calabar Yoruba Itsekiri Other 2. What is your Province? Division 3. What is your relationship to the farm owner? Owner Father Son Brother Wife lhughter Sister Other 4. How many years of school do you have? 01234567891011121314 5. What months in 1963 did you tap for this farmer? Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec. 6. Do you tap for more than one farmer? Yes No If so, how often do you tap for this farmer? 1 2 3 4 5 7. lbw many trees do you tap for this farmer? 8. What tools do you supply? What are their costs? lbw often must you replace them? Number Cost Replacement File Tapping knife ‘ Pails Cups Snail Coconut Tins Manufactured Others 220 9. 10. 221 What anti-coagulant do you use? None Soda Ash Crystallised Soda Liquid Ammonia Doesn't know lbw much did you buy for this farm in 1963? lbw much did it cost? When did you last buy some? lbw much did you buy? lbw long will it last? lbw much did it cost? lbw do you mix it, if necessary What coagulant do you use? lbw much did you buy for this farm in 1963? lbw much did it cost? When did you last buy some? lbw much did it cost? How long will it last? How do you mix it? Sodium Sulfite Questionnaire for Rubber Planters Name Date Village Interviewer l. Purchases of Ministgy of Agriculture and Natural Regources Seedlings According to the records of the M.A.N.R. each year each year you bought the number of rubber seedlings shown in Table 1 below: Table 1 - Purchases of Rubber Seedlings Year Number of Seedlings Number Alive Today Planting Distance (1) (2) <3) I (a) 1958 (b) 1959 (c) 1960 (d) 1961 (e) 1962 (f) 1963 (g) 1964 If the number of seedlings bought is not shown correctly in Table 1, correct the error by crossing out the number shown and writing in the correct number. If he bought rubber seedlings from the Ministry in years where nothing is shown in Table 1, write in the number bought. In column 2, please write down the number of the seedlings which still are alive. Count only those that he got from the Ministry, not ones grown from seed produced by the Ministry trees. If the number alive is unknown, ‘write down number which have died. In column 3, show the planting distances of each year's purchases. For instance, if the seedlings purchased in 1961 were planted in rows 20 feet apart and with 15 feet between the trees in the row, write down 20' x 15' in column 3 of row d. If no particular spacing was used, the trees were planted anyhow, write irregular. 222 223 2. lagd for Planting Rubber Were any crops planted on your farms before you planted rubber? Table 2 Big Bush- Virgin Forest light Bush- Arable Crop land- Year of Never Planted Cultivated Old Rubber Grew Food Crops Planting Before Before Farm in last Two Years (8) (b) (c) (d) (l) 1958 (2) 1959 (3) 1960 (4) 1961 (5) 1962 (6) 1963 (7) 1964 Show the use of the land before rubber was planted. Tick (V) the space. If the land cleared fits in two or more categories, show all the seedlings planted under the category which was largest. If you planted 200 seedlings in old rubber farm and 100 on light bush, write 300 under old rubber farm. How did you get the land on which you planted your rubber farms? Planting Father's Purchased Rent Pledge Year Community land (Price) (Rent p.a .) (amount) 1958 1959 1960 1961 1962 1963 1964 224 3. labor figggirgmgntg The following questions are to determine how much labor was used to plant your seedlings the last time you bought some. If you purchased seedlings from the Nhnistry several times, include only the labor required for the most recent planting. If you purchased seedlings in 1961 and 1963, only include the labor used in 1963. lbw many men helped you with each of the following planting operations? Include yourself if you worked. Thble 3 - Men Total No. of Cost Days No. Meals of Operations No. of Men Worked Hired Wa e Daily Meals (.) (b) (c) (a? m (r) Clearing the Bush Felling the Trees Burning Planting Cover Crops Pegging and lining Holing Planting Rubber Fertilizing Put the answer in column (a) of Table 3. In column (b) put down the number of days it took to complete the operation. Give the number of men hired in column (0) and the amount paid them for each day in column (d). In column (e) show the daily number of meals given men who normally do not eat from the same pot. The cost of each meal should be estimated in column (f) by estimating the cost of each item served. 225 How many women helped you.with the following planting operations? Include women who prepared meals. Table 4 - Wbmen Total No. of Cost Ibys No . Ihily of Operations Number Wbrked Hired Wage Meals Meals (a) (b) (c) (d) (e) (f) Clearing Felling Burning Planting Cover Crops Pegging and lining Holing Planting Rubber Fertilizing Put the number who worked at each Operation in column (a) of Table 4. In column (b) write down the number of days the women worked. Write down the number of women who were paid in column (c) and their daily wage in column (d). If they received food, write down the number of meals served each day and the cost of each meal in columns (e) and (f) respectively. 226 How many children helped you plant your rubber? Table 5 - Children Total Cost Days No . No. of of Operations Number Wbrked Hired Wage Meals Meals (a) (b) (c) (d) (e) (f) Clearing Felling Lining and Pegging Burning Fertilizing Planting Cover Crops Holing Planting Seed- ings write down the number in column (a) In column (b) write down the total number of days the children worked on the farm. If any were paid, write down the number in column (c) and the wage rate in (d). Give the number of meals served each day child in column (e) and the cost of each meal in (f). 227 Did any Ministry employees help you? Table 6 - Ministry Employees Total Cost No. of of Number Days Wbrked Meals Ranks Meals (at) (b) (c) (d) (a) Clearing Felling Lining and Phasing Burning Fertilizing Planting Cover Crops Holing Planting Rubber Using Table 6, give their number in column (a), the number of days thgy helped in column (b) and the number of meals you gave them in column c 228 How many times have you.weeded your youngest rubber seedlings since you planted them? times. Include only the weedings of the last rubber seedlings you bought from the Ministry if you have bought seedlings more than once. In Table 7 show the amount of labor used in each weeding. write the month and year of each weeding in column (a). Fill out columns (b) through (p) for each weeding in the same way you filled out Tables 3, L" and 50 Table 7 - Weeding labor r— .. rvr. Total No. of Month No . of Cost Days and No. of No. of No. Meals of No. of Each No. Year Men Ihys Hired Wage Daily Meals Women Worked lfired (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Total No. of Total No. of Cost Days No. of Cost Meals of No. of Each No. Meals of Wage Daily Meals Children Worked Hired Wage Daily Meals (k) (1) (m) (n) (0) (p) (q) (r) (s) 229 4. Ehgipment Please list all equipment used in your youngest rubber farm in column (a) below the number of each item in column (b), the price of one in column (c and how long you expect it to last in column (d). Some tools are already listed. Please write down any other you used. Table 8 - Tools Tool Number Used Cost of Each length of Use Annual Repair Cost (:3) (b) (c) (d) (e) Cutlass Hoes Spades Axes Knives Files Rails Fertilizer Poles Ropes Basins Buildings Do you own a smokehouse? (tick yes or no) Yes No When did you build it? HOW much did it cost to build? 230 shown in Table 9. Please add any others you have bought. Table 9 - Tapping Tbols Annual Tool Number Price length of Life Repair Costs Tapping knives Files Cups Aluminum Snail Coconut Tins Pails Metrolac How much acid do you buy each month? wa much does the acid cost? Do you.use anything to prevent the rubber from getting hard in the cup? Yes No What do you use? How much does it cost? How much do you use in a month? If you rent rollers, how much do you pay? Plain Marking If you rent a smokehouse, how much does it cost? 231 Do you own a factory? Yes No How much did it cost to build? When did you build it? How much have you spent repairing them? smokehouse Factory Do you own rollers? Yes No How much did they cost? Smooth Nbrking When did you buy them? What was the cost of their repairs? How do you plan to process your rubber? Tick (v’) one. Make lumps Buy rollers and build a smokehouse Use a cooperative processing factory? ____ Other (explain) ism-.-- Who will tap your rubber and how will he be trained? 5. Tapping If he is not tapping trees grown from seedling bought from the Ministry, stop here. Do not ask anymore questions. If he is tapping trees grown from Ministry seedlings continue. What year were the trees in tapping planted? How many tappers do you employ to tap the trees? _“_ H w are the tappers paid? What tools do you supply? How many of each? What did you pay for them and how long do you expect them to last? Some tools are already 232 Table l’) - Sales During May, 1961; Grade weight Price R53 II 353 III RSS IV A-Z 13.-3 Cuttings Lumps .ammma .ooa - amoa .ooa .aaasna 0H>ux .wHo> .cmaoapmapmapmpm moano “mommav upmsndm aways maneuwz .mauomaz mo coapmeopom “ONH .m .Amoammo mcapcapm unmanne>oo ".0 .o .copmcazwm3v magmsaz .ooabpom soamomom oasocoom .cssmaeoahmm mo scossmaaom .m.m “nm .e .aomma .moasmasasm mo ooaeao asymmom "mommav.mmma moaumwvmam mo mpomhum mac: .maaoma o coapmaobom "bum .a .Ano H ..onH .amoham goamemem 233 APPENDIX D hanoESOQ xeow :ozv :0 H xoonhmow vaposEoo ..oCH .smoasm nopmomom paposEoo "mooasom N.mm m.ma a.moa o.usa o.mma o.mam 5.3mm omom mmsm mmma m.mm 0.35 a.moa o.m:a m.oma m.mmm m.amm moam msmm mmma a.mm m.ea o.mm o.mma a.ama m.aam a.mma mmom mama amea N.am a.mu m.me o.msa N.ema m.mmm a.mos mmma omma omma a.mm m.ss a.am m.a:a m.oma a.mmm m.emm osom mmma omma a.as m.oe N.ooa m.mma s.ama m.umm a.mmm mama mama mama 0.0m m.mm m.mm m.maa o.mma n.3mm m.mmm moma mmma mama o.mm a.mm a.mm a.maa m.mma a.mmm o.mmm mmma aama mmoa m.om m.mm m.mm m.mm N.oma a.mms a.mmm omma mmoa mmma s.om a.:m a.mm m.mm a.maa 3.335 m.mmm oama mam smma m.am a.mm m.mm n.ma m.mo m.smm 3.35m omaa mmm mmea m.ma 0.3: a.mm m.me m.am n.0ma m.smm coma mam mmma m.om a.mm a.moa m.mm m.moa m.sam m.mom mmma amom amma null Inn: 1 1 I v 1: mcoe wcmmwose I I v luv lunr1n ttttt mwaomaz Emcuoa> coahoo moaum< pamHHmSH mamozoch mhmamz Hence Heaps meow £83 ea .83 sommem amuseaz sommsm oasompcam .mmma-anea .moausnsoo masomaom ecu mayo: amp ca :oasosmosa sommsm aaaapaz mas oasompzam .a oases 234 Table 2. Nigerian Rubber as a Percent of African and werld Natural Rubber Production. Year African world ‘- ==Eszssn£r- —=-- 1951 29 1.1 1952 25 1.0 1953 27 1.2 1954 25 1.1 1955 31 1.6 1956 33 2.0 1957 3A 2.1 1958 33 2.1 1959 38 2.6 1960 39 2.9 1951 no 2.6 1962 uz 7.8 1963 43 \a) 0 H APPENDIX E Additional Survey Results Table l. Tribal Affiliation. General. Survey, Midwestern Nigeria, November, 1963 - January, l96h. Tribe All Interviewees Farmers Only Bini and Ishan NO 33 Ibo 3h 23 Urho be 30 2 8 Itsekiri 7 3 Table 2. Comparison of Tribal Distribution in General Survey and 1952 Census, Midwestern Nigeria, November, 1963 - January, 196k. Tribe Survey 1952 Census bini and Ishan 36 33 Ibo 31 33 Urhobo ?7 21 Itsekiri 6 2 Source: Federation of Nigeria, Population Census of the destern Region of Nigeriailflj2, Bulletin Nos. 1-9 (Lagos: The Censgs Superintendent, June 1955), No. 6, pp. 31-32 and No. 9 p. 2 . 235 236 Table 3. Educational Achievements, Participants, General Survey, Midwestern Nigeria, November 1963 - January 1964. Years of Education Farmers Non~Farmers 0 60 12 l l -- 2 2 l 3 a 7 u U l 5 2 1 6 2 2 7 2 -- 8 5 l 9 3 ~- 10 l -- ll -- -- 12 -- 1 No Response -- a Mean Years of Education 1.7 3.2 237 Table h. Rubber Plots and Acres by Year of Planting: General Survey, Midwestern Nigeria, Novemben 1963 - January, l9bfl. Year Plots Acres 1933 1 1 193“ - - 1935 1 5 1936 2 3 1937 2 6 1938 u 1a 1939 6 22 1990 2 8 1991 2 7 19112 1+ in 1993 a 1h 19m 5 21 19115 6 18 1996 a 1n 19W 9 35 196 9 2a 1999 10 38 1950 12 no 1951 12 35 1952 1a as 1953 15 52 1959 15 62 1955 13 62 1956 15 a? 1957 15 #7 1958 23 77 1959 28 86 1960 30 79 1961 27 77 1962 24 60 1963 26 , 71 Mean Year 5h.8 5h.3 238 Table 5. Source of Tappers, General. Survey, Midwestern Nigeria, November, 1963 - January, 196“. Other Non- Number Owner Sons Brothers1 Fathers Family Family _____ NuMber of Farms —— — — 1 1n 8 5 7 1+ 2 3 3 1 13 3 3 3 4 3 1Includes non-relatives native to the owner's home village. Table 6. Payment of Hired Tappers, General Survey, Midwestern Nigeria, November, 1963 - January, l96h. Share All Share Sheets - Production Lumps to Tapper Leased r+_+ ,___ , — — Number of Farmers _._ _ in 11 7 239 Table 7. Estimated Yields Per Acre in Gallons of latex, Pounds of lump and Pounds of Sheet by Farm, Input-Output Survey, Midwestern Nigeria, 196“. Farm Acres Number Tapped latex Lump Sheets Gallons per Acrel -------Pounds per Agre------ l 3.6 301 577 579 5 2 . 5 271 1789 ..- 6 1. 8 86 512 -.. 7 5.1 77 537 --- 8 u . 9 189 13 53 ' --- 9 5. 2 77 5&0 28 10 3.3 #39 2712 --- ll 2.“ 121 773 --- 12 1.3 65 928 --- 13 2 .5 2 57 1697 -..- 1U 9.9 158 301 328 15 2 . 3 102 92 232 16 2 . 6 273 1805 -..- 18 1.0 138 9a 318 1 Imperial gallons 240 Table 8. Average Number of Trees Tapped Per Tapper by Farm, Input-Output Survey, Midwestern Nigeria, 196“. Farm Number Trees Par Tapper l 385 5 11m 6 111 7 19“ 8 381 9 ”05 9 392 10 #92 11 306 12 22L» 13 230 Ev 307 15 111 15 106 16 392 18 180 18 350 Average Per Tapper 271 241 Table 9. Tapping Characteristics Input-Output Survey, Mhdwestern Nigeria, 1964. Average Number Farm Average Average of Panels Average Girth Number Angle length of Cut Per Tree at 20 Inches 13.63222 111.219.; 229.21.; 1mm; 1 42.2 13.94 4.60 34.63 4 35.00 16.75 7.00 27.0 51 -- --— --- 25.32 61 m -..... -..- 29.70 71 -- --- --- 34.43 8 49.57 15.63 8.77 27.92 9 48.00 17.87 4.52 33.14 10 40.63 17.00 2.50 31.50 111 .... m --- 37.25 12 41.60 16.86 5.00 28.20 13 29.32 11.84 2.63 23.93 1L» --- -.. am- 25.73 15 42.12 20.56 4.76 32.06 16 21.59 10.14 2.34 23.84 171 -- m --- 37.07 18 36.99 19.80 8.92 34.81 1N0 record of tapping angle, length or number of panels. Table 1. APPENDIX F Ordinary Smallholder Budgets Yields of lump and Sheet: Years, Midwestern Nigeria, 1964. Alternative Organizations and All Year Organization Product 810 11 12 13-27 '—T " m 2...-._i- ----- Pounds Per_Acre Per Ann_;r----- Ordinary lump Lump 997 1083 1182 1231 Sun Dried Sheet lump 273 297 324 337 Sheets 245 267 291 303 Private and lump 109 119 130 135 Cooperative Sheets 295 320 349 364 Processing Clean Lumps Lump 911 990 1080 1125 Table 2. Prices of Lump and Sheet: Alternative Products and Price levels, Midwestern Nigeria, 1964. Price—Level II"— 10% Price 20% Fri ce Lrganization Product Current Price Decrease Decrease nnnnn 11-- Pence Pg: Poung_-------------- Ordinary Lump Lump 2.70 2.43 2.16 Sun Dried Sheet Lump 2.70 2.43 2.16 Sheet 10.75 9.675 8.6 Private and Lump 2.70 2.43 2.16 Cooperative Sheet 13.88 12.492 11.104 Processing Clean Lumps Lump 4.0 3.6 3.2 242 243 Table 3. Gross Revenue, Expenses and Residual Returns from Ordinary Lump Production: Alternative Prices, Costs and Planting Methods for Selected Years, Midwestern Nigeria, 1964. Price and Planting Years Cost Level Revenue or Expense Method 10 11 12 13 27 ------ Shillings Peg Acre----- Current Gross Revenue Both 224.3 243.7 266.0 277.0 277.0 Prices and Costs Tapping, Collecting Both 32-8 34-1 35.6 36.3 36.3 and Processing]- Depreciation Inter- 37.9 37.9 37.9 37.9 37.9 Planted Residual Returns2 Inter- 153.6 171.7 192.5 202.8 202.8 Planted Depreciation Planted 61.3 61.3 61.3 61.3 61.3 Alone Residual Returns2 Planted 130.3 148.3 169.1 179.4 179.4 Alone 10% Price Gross Revenue Both 201.9 219.3 239.4 249.3 249.3 Decrease and Tapping, Colle ti Both 2.8 4.1 .6 6. 10% Cost and Processingi- ng 3 3 35 3 3 36'3 Increase Depreciation Inter- 41.1 41.1 41.1 41.1 41.1 Planted Residual Returns2 Inter- 128.0 144.2 162.7 171.9 171.9 Planted Depreciation Planted 67.3 67.3 67.3 67.3 67.3 Alone Residual Returnsz Planted 101.1 117.9 136.5 145.7 105.7 Alone 244 Table 3. (Continued) Price and Planting Yggrs Cost Level Revenue or EXpense Method 10 11 12 13 27 ------ Shillings Per Acre------ 20% Price Gross Revenue Both 179.5 194.9 212.8 221.6 221.6 Decrease and Tapping, Collecting Both 32.8 34.1 35.6 36.3 36.3 20% Cost and Processi Increase Depreciation Inter- 44.8 44.8 44.8 44.8 44.8 Planted Residual Returns2 Inter- 101.9 116.1 132. 5 140.5 140.5 Planted Depreciation Planted 72.9 72.9 72.9 72.9 72.9 Alone Residual Returns2 Planted 73.8 88.0 104.3 112.4 112.4 Alone 1Does not include tappers' shares. 2Sum of net revenue, tappers' shares and interest. 245 Table 4. Gross Revenue, Expenses and Residual Returns from Sun-Dried Sheet Production: Alternative Prices, Costs and Planting Methods for Selected Years, Midwestern Nigeria, 1964. Price and Planting ear Cost Level Revenue or Expense Method 10 11 II? 13 2'7 -----Shilli 5 Per cre ------ Current Gross Revenue Both 280.9 306.0 333.6 347.3 397.3 Prices and Costs Tapping, Collecting Both 57.8 59.5 61.6 62.5 62.5 and Processing1 Depreciation Inter- 37.4 37.4 37.4 37.4 37.4 Planted Residual Returnsz Inter- 185.7 209.1 234.7 247.4 247.4 Planted Depreciation Planted 61.3 61.3 61.3 61.3 61.3 Alone Residual Returnsz Planted 161.9 185.3 210.8 223.5 223.5 Alone 10$ Price Gross Revenue Both 252.8 275.4 300.2 312.5 312.5 Decrease and Tapping, Collecting Both 57.8 59.5 61.6 62. 5 62.5 10% Cost and Processing1 Increase Depreciation Intern 41.1 41.1 41.1 41.1 41.1 Planted Residual Returnsz Inter- 154.0 174.8 197.7 209.0 209.0 Planted Depreciation Planted 67.3 67.3 67.3 67.3 67.3 Alone Residual Returns-2 Planted 127.7 148.6 171.4 182.7 182.7 Alone 246 Table 4. (Continued) Price and Planting Year Cost Level Revenue or Expense Method 10 ll 12 13 27 ------ Shillings Perlgcre------ 20% Price Gross Revenue Both 224.7 244.8 266.9 277.8 277.8 Decrease and Tapping, Collecting Both 57.8 59.5 61.6 62.5 62.5 20% Cost and Processing1 Increase Depreciation Intern 44.8 44.8 44.8 44.8 44.8 Planted Residual Returns2 Inter- 122.2 140.6 160.6 170.6 170.6 Planted Depreciation Planted 72.9 72.9 72.9 72.9 72.9 Alone , Residual Returns2 Planted 94.1 112.4 132.5 142.4 142.4 Alone 1Does not include Tappers' shares. 23mm of net revenue, Tappers‘? shares and interest. 2u7 Table 5. Gross Revenue, Expenses and Residual Returns from Cooperative Processing: Alternative Assumptions of Prices, Costs and Planting IMethod for Selected Years, Midwestern Nigeria, 1964. Price and Planting Year Cost Level Revenue or Expense Method 10 ll 12 13 27 wwwwww Shillings Per Ac;e----- Current Gross Revenue Both 365.6 397.2 433.3 451.4 451.4 Prices and Costs Tapping, Collecting Both 116.5 122.7 129.8 133.5 133.5 and Processing1 Depreciation Inter- 37.4 37.4 37.4 37.4 37.4 Planted Residual Returns2 Interm 211.7 237.2 266.1 280.5 280.5 Planted Depreciation Planted 61.3 61.3 61.3 61.3 61.3 Alone Residual Returns2 Planted 187.9 213.3 2&2.2 256.6 256.6 Alone 10$ Price Gross Revenue Both 329.1 357.5 390.0 006.3 406.3 Decrease and Tapping, Collecting Both 116.5 122.7 129.8 133.5 133.5 10$ Cost and Processin Increase Depreciation Inter- 41.1 41.1 41.1 41.1 41.1 Planted Residual Returns2 Intern 171.5 193.7 219.0 231.7 231.7 Planted Depreciation Planted 67.3 67.3 67.3 67.3 67.3 Alone Residual Returns2 Planted 105.3 167.4 192.8 205.4 205.n Alone N (1‘ Q) Table 5. (Continued) -— -1: - «mu-u. —- n—I—p-l‘... ”1-‘ -'—,-IA‘--—: n‘f' spa-"1.- - IR;- su-o-o--'u not” a. un-g—J-fi-me-m.‘ .- .g ..- Price and II mil: 3 _mm_bu__ Year Cost Level Revenue or Expense M: ch 10 ll 12 13 27 aaaaaa Shillings Per Acre------ 20% Price Gross Revenue Both 292.5 317.8 346.7 361.1 361.1 Decrease and Tapping, Collecting Both 116.5 122.7 129.8 133.5 133.5 20% Cost and Processing1 Increase Depreciation Interw 44.8 44.8 44.8 44.8 44.8 Planted Residual Returns2 Intern Planted Depreciation Planted Alone Residual Returns2 Planted Alone 131.3 150.3 172.0 182.9 182.9 72.9 72.9 72.9 72.9 72.9 103.2 122.2 143.9 154.7 154.7 éDoes not include Tappers' share. Sum of net revenue, Tappersg shares and interest. 249 Table 6. Gross Revenue, Expenses and Residual Returns from.Clean Lump Production: Alternative Assumption of Prices, Costs and Planting Method_for Selected Years, Midwestern Nigeria, 1964. Price and Planting _. 3:252, Cost Level Revenue or Expense Method 10 ll 12 13 27 wommowShgllingg Per'Aggenwuuo- Current Gross Revenue Both 379.6 412.5 450.0 468.8 468.8 Prices and , Costs Tapping, Collecting Both 62.5 64.5 66.8 68.0 68.0 and Processing1 Depreciation Inter» 37.9 37.9 37.9 37.9 37.9 Planted Residual Returnsz Interm 279.2 310.1 305.3 362.9 362.9 Planted Depreciation Planted 61.3 61.3 61.3 61.3 61.3 Alone Residual Returns2 Planted 255.9 286.7 321.2 339.5 339.5 Alone 10‘ Price Gross Revenue Beth 341.6 371.3 405.0 421.9 421.9 Decrease and Tapping, Collecting Both 62.5 64.5 66.8 68.0 68.0 10$ Cost and Process Increase Depreciation Intern 41.1 41.1 41.1 41.1 41.1 Planted Residual Returns2 Intens 238.1 265.7 297.1 312.8 312.8 Planted Depreciation Planted 67.3 67.3 67.3 67.3 67.3 Alone Residual Returns2 Planted 211.8 239.4 270.9 286.6 286.6 Alone 250 Table 6. (Continued) Price and Planting zear Cost Level Revenue or Expense Method 10 11 12 13 27 mmmmm Shillggs Per Acres-mum- 205 Price Gross Revenue Both 303.7 330.0 360.0 375.0 375.0 Decrease . and Tapping, Collecting Both 62.5 64.5 66.8 68.0 68.0 20% Cost and Processing]- Increase Depreciation Interm 44.8 44.8 44.8 44.8 44.8 Planted Residual Returns2 Intern 196. 5 220.8 248.4 262.3 262.3 Planted Depreciation Planted 72.9 72.9 72.9 72.9 72.9 Alone Residual Returnsz Planted 168.3 192.6 220. 3 234.1 234.1 Alone 1Does not include Tappers” share. 2 Sun of net revenue, Tappersv shares and interest. 251 Table 7A. Gross Revenue, Expenses and Residual Returns from Private Processing in a 2222 Processing Plant on a Five-Acre Small- holdings Alternative Prices, Costs, Planting Method and Processing Plant For Selected.Years, Midwestern Nigeria, 1964. Price and Planting Year Cost Level Revenue or Expense Method 10 11 lg 13 22 owe-Shill 3 Per Acre---- Current Gross Revenue Both 365.6 397.2 433.3 451.4 451.4 Prices and Costs Tapping, Collecting Both 67.3 69,4 71.6 72.8 72.8 and Processing1 Plant Upkeep Both 88.8 88.8 88.8 88.8 88.8 Depreciation Intern 86.7 86.? 86.7 86.7 86.7 Planted Residual Returns2 Intern 122.8 152.4 186.2 203.1 203.1 Planted Depreciation Planted 110.6 110.6 110.6 110.6 110.6 Alone Residual Returns2 Planted 99.0 128.5 162.3 179.2 179.2 Alone 10% Price Gross Revenue Both 329.1 357.5 390.0 406.3 406.3 Decrease and Tapping, Collecting Both 67.3 69.4 71.6 72.8 72.8 10% Cost and Processing1 Increase Plant Upkeep Both 88.8 88.8 88.8 88.8 88.8 Depreciation Intern 90.4 90.4 90.4 90.4 90.4 Planted Residual Returns2 Intern 82.6 108.9 139.1 154.2 154.2 Planted Depreciation Planted 116.7 116.7 116.7 116.7 116.7 Alone Residual Returnsz Planted 56.3 82.6 112.8 128.0 128.0 Alone 252 Table 7A. (Continued) Price and Planting ‘Year Cos Level Revenue or ense Method 10 11 12 13 22 mommaQShilliggs Per Acreu----- 20$ Price Gross Revenue Both 292.5 317.8 346.7 361.1 361.1 Decrease , and Tapping, Collecting Both 67.3 69.4 71.6 72.8 72.8 20$ Cost and Processing1 Increase Plant Upkeep Both 88.8 88.8 88.8 88.8 88.8 Depreciation Intern 94.1 94.1 94.1 94.1 94.1 Planted Residual Returns2 Inter- 42.3 65. 5 92.1 105.4 105.4 Planted Depreciation Planted 122.2 122.2 122.2 122.2 122.2 Alone Residual Rettmnsz Planted 14.2 37.4 63.9 77.3 77. 3 Alone 1. Does not include Tappers" shares. 2. Sun.of net revenue, Tappersfl shares and interest. 253 Table 7B. Gross Revenue9 Expenses and Residual Returns from Private Processing in a £100 Processing Plant on a Fivqucre Small- Alternative Prices9 Costs9 Planting Method_and holdings Processing Plant For Selected Years, Midwestern Nigeria, 1964. Price and Cost Level Revenue or ones Current Gross Revenue Prices and Costs Tapping, Colle ting and Processin Plant Upkeep Depreciation Residual Returns2 Depreciation Residual Returns2 10$ Price Gross Revenue Decrease and Tapping, Collecting 10$ Cost and Processing1 Increase Plant Upkeep Depreciation Residual Returns2 Depreciation Residual Returns2 Planting Method Both Both Both Interw Planted Intern Planted Planted Alone Planted Alone Both Both Both Intern Planted Inter- Planted Planted Alone Planted Alone Year 10 ll 12 . ---Shilliggs Per Acre--- 67.3 69.4 71.6 40.0 40.0 40.0 59.6 59.6 59.6 198.7 228.3 262.1 83.5 83.5 83.5 174.8 204.4 238.2 329.1 357.5 390.0 67.3 69.4 71.6 40.0 40.0 40.0 6303 6303 6303 158.5 184.8 215.0 89.6 89.6 89.6 132.2 158.6 188.7 1 2 451.4 451.4 72.8 72.8 40.0 40.0 59.6 59.6 279.0 279.0 83.5 83.5 255.1 255.1 406.3 406.3 72.8 72.8 40.0 40.0 63.3 63.3 230.1 230.1 89.6 89.6 203.9 203.9 Table 7B. (Continued) 254 Price and Cost Level Revenue or 20$ Price Decrease and 20$ Cost Increase 1180 Gross Revenue _ Tapping. Collecting and Processing1 Plant Upkeep Depreciation Residual Returns2 Depreciation Residual Returns2 Planting Both Both Both Intern Planted Intern Planted Planted Alone Planted Alone 292.5 317.8 67.3 69.4 40.0 40.0 67.0 67.0 118.3 141.4 95.1 95.1 190.1 113.3 71.6 72.8 72.8 40.0 40.0 40.0 67.0 67.0 67.0 168.1 181.3 181.3 95.1 95.1 95.1 139.8 153.2 153.2 1. Does not include Tappers' shares. 2. Sum of net revenue, TappersV shares and interest. 255 Table 8A. Gross Revenue, Expenses and Residual Returns from Private Processing in a £222 Processing Plant on a TennAcre Small- holding: Alternative Prices, Costs, Planting Method and Processing Plant For Selected Years, Midwestern Nigeria, 1964. Price and Planting £§ear Cost Levbl Revenue or figpense Method 10 ll 12 l 2 ~~---§hilliggs Per Acre ----- Current Gross Revenue Both 365.6 397.2 433.3 451.4 451.4 Prices and Costs Tapping, Collecting Both 67.3 69.4 71.6 72.8 72.8 and Processing1 Plant Upkeep Both 44.4 44.4 44.4 44.4 44.4 Depreciation Inter» 62.1 62.1 62.1 62.1 62.1 Planted Residual Returnsz Inter~ 191.8 221.4 255.2 272.1 272.1 Planted Depreciation Planted 85.9 85.9 85.9 85.9 85.9 Alone Residual Returns2 Planted 168.0 197.6 231.3 248.2 248.2 Alone 10$ Price Gross Revenue Both 329.1 357.5 390.0 406.3 406.3 Decrease and Tapping9 Collecting Both 67.3 69.4 71.6 72.8 72.8 20$ Cost and Processing Increase Plant Upkeep Both 44.4 44.4 44.4 44.4 44.4 Depreciation Intern 65.7 65.7 65.7 65.7 65.7 Planted Residual Returnsz Intern 151.6 178.0 208.1 223.2 223.2 Planted Depreciation Planted 92.0 92.0 92.0 92.0 92.0 Alone Residual Returnsz Planted 125.4 151.7 181.9 197.0 197.0 uglone 256 Table 8A. (Continued) Price and Planting Year Cost Level Revenue or ense Method 10 11 12 13 22_ -----Shilli§gs Per Acre ----- 20% Price Gross Revenue Both 292. 5 317.8 346.7 361.1 361.1 Decrease . and Tapping, Collecting Both 67.3 69.4 71.6 72.8 72.8 20$ Cost and Processing1 Increase Plant Upkeep Both 44.4 44.4 44.4 44.4 44.4 Depreciation Inter- 69.4 69.4 69.4 69.4 69.4 Planted Residual Returnsz Interm 111.4 134.6 161.1 174.5 174.5 Planted Depreciation Planted 97.6 97.6 97.6 97.6 97.6 Alone Residual Returnsz Planted 83.3 106.4 133.0 146.3 146.3 Alone 1. Does not include Tappers' share. 2. Sun of net revenues, Tappersv share and interest. 257 Table 8B. Gross Revenue, enses and Residual Returns fren.Private Processing in a 00 Processing Plant on a Tenchre Small- holding: Alternative Prices, Costs, Planting Method and Processing Plant For Selected Years, Midwestern.Nigeria, 1964. Price and Planting erar Cost Level Revenue or Expense Method_, 10 ll 12*? 13 22 - ---- Shillings Per Acre----- Current Gross Revenue Both 365.6 397.2 433.3 451.1 451.1 Prices and _ Costs Tapping, Collecting Both 67.3 69.4 71.6 72.8 72.8 and Process Plant Upkeep Both 20.0 20.0 20.0 20.0 20.0 Depreciation Inter- 48.5 48.5 48.5 48.5 48.5 Planted Residual Returnsz Inter- 229.8 259.4 293.2 310.1 310.1 Planted Depreciation Planted 72.4 72.4 72.4 72.4 72.4 Alone Residual Returns2 Planted 205.9 235.5 264.3 286.2 286.2. Alone 10$ Price Gross Revenue Both 329.1 357.5 390.0 406.3 406.3 Decrease and Tapping, Collefting Both 67.3 69.4 71.6 72.8 72.8 10$ Cost and Processing Increase Plant Upkeep Both 20.0 20.0 20.0 20.0 20.0 Depreciation Intern 52.2 52.2 52.2 52.2 52.2 Planted Residual Returnsz Inter- 189.6 215.9 246.1 261.3 261.3 Planted Depreciation Planted 78.4 78.4 78.4 78.4 78.4 Alone Residual Returns2 Planted 163.3 189.7 219.8 255.0 255.0 Alone 258 Table 83. (Continued) Price and Planting Cost Level Revenue or ense Method Year 10 11 12 1 ------ Shillings Per Acre----- 292.5 317.8 346.7 361.1 361.1 67.3 69.4 71.6 72.8 72.8 20.0 20.0 20.0 20.0 20.0 55.9 55.9 55.9 55.9 55.9 149.4 172.5 199.1 212.4 212.4 84.0 84.0 84.0 84.0 84.0 121.2 144.4 170.9 184.3 184.3 20$ Price Gross Revenue Both Decrease Ta , Colle t Both 23; Cost angpgl'gcessingi ing Increase Plant Upkeep Both Depreciation Inter- Planted Residual Returns2 Inter- Planted Depreciation Planted Alone Residual Returns2 Planted Alone 1. Does not include Tappers' share. 2. Sun of net revenue, Tappers“ share and interest. 259 Table 9A. Gross Revenue, Expenses and Residual Returns from.Private Processing in a £222 Processing Plant on a 20-Acre Small- holding: Alternative Prices, Costs, Planting Method and. , Processing Plant for Selected Years, Midwestern Nigeria, 1964. Price and Cos Level Revenue or Current Prices and Costs 10$ Price Decrease and 10$ Cost Increase 61186 Gross Revenue Tapping, Collecting and Processing1 Plant Upkeep Depreciation Residual Returns2 Depreciation Residual Returns2 Gross Revenue Tapping, Colleiting and Processing Plant Upkeep Depreciation Residual Returns2 Depreciation Residual Returns2 Planting ethod Both Both Both Inter- Planted Interw Planted Planted Alone Planted Alone Both Both Both Inter~ Planted Inter- Planted Planted Alone Planted Alone Year 10 ll 12 1 ----- Shillings Ber ncre---- 365.6 397.2 433.3 451.4 451.4 67.3 69.4 71.6 72.8 72.8 22.2 22.2 22.2 22.2 22.2 49.7 49.7 49.7 49.7 49.7 226.4 256.0 289.8 306.7 306.7 73.6 73.6 73.6 73.6 73.6 202.5 232.1 265.9 282.8 282.8 329.1 357.5 399.0 406.3 406.3 67.3 69.4 71.6 72.8 72.8 22.2 22.2 22.2 22.2 22.2 53.4 53.4 53.4 53.4 53.4 186.2 212.5 242.7 257.8 257.8 79.7 79.7 79.7 79.7 79.7 159.9 186.2 216.4 231.6 243.9 260 Table 9A. (Continued) Price and Planting ‘Year Cost Level evenue or ense Method 10 11 12 l 2 ------ Shillings Per.Acre----- 20% Price Gross Revenue Both 292.5 317.8 346.7 361.1 361.1 Decrease and Tapping, Collefting Both 67.3 69.4 71.6 72.8 72.8 20$ Cost and Processing Increase Plant Upkeep Both 22.2 22.2 22.2 22.2 22.2 Depreciation Inter- 57.1 57.1 57.1 57.1 57.1 Planted Residual Returnsz Intern-o 145.9 169.1 195.7 209.0 209.0 Planted Depreciation Planted 85.2 85.2 85.2 85.2 85.2 Alone Residual Returns2 Planted 117.8 140.5 167.5 180.9 180.9 _n;one 1. Does not include Tappers' shares. 2. Sun of net revenue, Tappers“ share or interest. Table 9B. 261 Gross Revenue, Expenses and Residual Returns from Private Processing in a £100 Processing Plant on a 20-Acre Small- holding: Alternative Prices, Costs, Planting Method and Processing Plant for Selected Years, Midwestern Nigeria, 1964. Price and Cost Level Revenue or Current Prices and Costs 10$ Price Decrease and 10$ Cost Increase Gross Revenue Tapping, Collecting and Processing1 Plant Upkeep Depreciation Residual Returns2 Depreciation Residual Returns2 Gross Revenue Tapping, Collecting and Processing1 Plant Upkeep Depreciation Residual Returns2 Depreciation Residual Returns2 Planting ense Method Both Both Both Intern Planted Inter- Planted Planted Alone Planted Alone Both Both Both Intern Planted Intera Planted Planted Alone Planted Alana Yen; 10 ll 12 1 2 ---Shill;ngs Perincre---- 365.6 397.2 433.3 451.4 451.4 67.3 69.4 71.6 72.8 72.8 10.0 10.0 10.0 10.0 10.0 43.0 43.0 43.0 43.0 43.0 245.4 274.9 308.7 325.6 325.6 66.8 66.8 66.8 66.8 66.8 221.5 251.1 284.9 301.8 301.8 329.1 357.5 390.0 406.3 406.3 67.3 69.4 71.6 72.8 72.8 10.0 10.0 10.0 10.0 10.0 46.6 46.6 46.6 46.6 46.6 205.2 231.5 261.6 276.8 276.8 72.9 72.9 72.9 72.9 72.9 178.9 205.2 235.4 250.5 253.5 262 Table 9B . (Continued) Price and Planting ‘Iear Cos e eve ue nse thod 10 11 12 l 2 -~---Shill;ngs zer Acre----- 20$ Price Gross Revenue Both 292.5 317.8 346.7 361.1 361.1 Decrease . i. and Tapping, Collecting Both 67.3 69.4 71.6 72.8 72.8 20$ Cost and Processing1 Increase . _ Plant Upkeep Both 10.0 10.0 10.0 10.0 10.0 Depreciation Inter- 50.3 50.3 50.3 50.3 50.3 Planted Residual Returnsz Inter- 164.9 188.1 214.6 228.0 228.0 Planted Depreciation Planted 78.5 78.5 78.5 78.5 73.5 Alone Residual Returns2 Planted 136.8 160.0 186.5 199.8 199.8 Alone 1. Does not include Tappers' shares. 2. Sun of net revenue, Tappers' shares and interest. 263 Table 10. Returns from.0rdinary Lump Production, SunéDried Sheet Production, Cooperative Processing and Clean Lump Production: 10 Per Cent Price Decrease and 10 Per Cent Cost Increase, Alternative Plant- ing Methods for Selected Years, Midwestern Nigeria, 1964} Planting Yen: Organisation Method Revenue Source 10 1.1 12 13 27 ""‘Shlll$£83 Per*Acre----- Ordinary Inter- Residual Returns2 128.0 144.2 162.7 171.9 171.9 Lump Planted Tappers' Income 101.0 109.7 119.7, 124.6 124.6 Interest 51.2 48.9 46.0 43.1 2.9 Net Revenue .21.“? .117.“ -209 ”02 “on Ordinary Planted Residual Returns2 101.1 117.9 136.5 145.7 145.7 Lump Alone Tappers“ Income 101.0 109.7 119.7 124.6 124.6 Interest 84.8 80.1 75.4 70.7 4.7 Net Revenue -84.0 -7l.9 -58.6 -49.7 16.3 Sun Dried Inter- Residual Returns2 154.0 174.8 197.7 209.0 209.0 Sheet Planted Tappers' Income 126.4 137.7 150.1 156.3 156.3 Interest 51.8 48.9 46.0 43.1 2.9 Net Revenue -24.2 11.7 1.5 14.1 54.3 Sun Dried Planted Residual ReturnsZ 127.7 148.6 171.4 182.7 182.7 Sheet Alone Tappers' Income 126.4 137.7 150.1 156.3 156.3 Interest 84.8 80.1 75.4 70.7 4.1 Net Revenue ~46.5 -35.1 -22.9 ~15.3 21.7 Cooperative Inter- Residual Returns2 171.5 193.7 219.0 231.7 231.7 Processing Planted Tappers' Income 164.5 178.7 195.0 203.1 203.1 Interest 51.8 48.9 46.0 43.1 2.9 Net Revenue ~44.8 -33.9 -22.0 -14.6 25.7 COOperative Planted Residual Returns2 145.3 157.4, 192.8 205.4 205.4 Processing Alone Tappers' Income 164.5 178.8 195.0 203.1 203.1 Interest 84.8 80.1 75.4 70.7 4.7 Net Revenue -104.l -9l.4 -77.6 -68.4 -2.4 264 Table 10. (Continued) Planting Iran Organization. JMethod Revenue Source 10 11 12 13 ' 27 ""'§h!!!é£flfl Ea: berg...-- Clean Inter- Residual Returns2 238.1 265.7 279.1 312.8 312.8 Lump Planted Tappers' Income 170.8 185.6 202.5 210.9 210.9 Interest 51.8 48.9 46.0 43.1 2.9 Net Revenue 15.5 31.2 48.6 58.8 99.0 Clean Planted Residual Returnsz 211.8 239.4 270.9 286.6 286.6 Lunp Alone Tappers' Income 170.8 185.6 202.5 210.9 210.9 Interest 84.8 80.1 75.4 70.7 4.7 Net Revenue -43.8 ~26.3 -7.1 4.9 70.9 1-See Chapter VII for returns under.Alternative Price and Cost Combinations. 2 Sun of following three items. 265 Table 11. Returns from Private Processing with Five and Ten-Acre Ordinary Suntholdings: Ten Per Cent Price Decrease and Ten Per Cent Cost Increase, Alternative Planting Methods and1 Processing Plants for Selected Years, Midwestern Nigeria, 1964.1 Size of Holding and Planting Processing Method Revenue Source Zen; Plant W 11 3 ----- We gen Acre-nu- Five Acres Inter- Residual Returns2 82.6 108.9 139.1 154.2 154.2 3222 Planted Tappers' Income 164.5 178.8 195.0 203.1 203.1 Processing Interest 113.9 107.6 101.3 94.9 .3 Plant Net Revenue ~195.9 -177.4 ~157.2 -l43.8 -55.2 Five Acres Planted Residual Returns2 56.3 82.6 112.8 128.0 128.0 £222 Alone Tappers' Income 164. 5 178.8 195.0 203.1 203.1 Processing Interest 147.0 138.8 130.7 122.5 8.2 Plant Net Revenue -255.2 -234.9 -219.9 ~197;7 ~83o3 Five Acres Inter- Residual Returns2 158.5 184.8 215.0 230.1 230.1 5100 Planted Tappers' Income 164.5 178.8 195.0 203.1 203.1 Processing Interest 79.7 75.3 70.9 66.5 4.4 Plant Net Revenue ~85.8 -69.3 -50.9 -39.5 22.6 Five Acres Planted Residual Returns2 132.2 158.6 188.7 203.9 203.9 E100 Alone Tappers' Incane 164. 5 178.8 195.0 203.1 203.1 Processing Interest 112.8 106.6 100.3 94.0 6.3 Plant Net Revenue «I'll-$5.1 ”126.8 -106e6 -93e3 -5e5 Ten Acres Inter- Residual Returns"a 151.6 178.0 208.1 223.2 223.2 £222 Planted Tappers' Income 164. 5 178.8 195.0 203.1 203.1 Processing Interest 82. 8 78. 2 73. 6 69. 0 4. 6 Plant Net Revenue -95.7 ~79.0 -60.5 -48.9 15.6 Table 11. (Continued) 266 Size of Holding and Planting Processing Method Revenue Source {ear Plant 10 ll 12 13 27 -m-W~-m Ten Acres Planted Residual Returns2 125.4 151.7 181.9 197.0 197.0 5222 Alone Tappers' Income 164. 5 178.8 195.0 203.1 203.1 Processing Interest 115.9 109.5 103.0 96.6 .4 Plant Net Revenue -155.1 436.5 -116.2 402.7 -12.5 Ten Acres Inter- Residual Returns2 189.6 215.9 246.1 261‘- 3 261.3 £100 Planted Tappers' Income 164.5 178.8 195.0 203.1 203.1 Processing Interest 65.8 62.1 58.4 54.8 3.6 Plant Net Revenue -40.7 -24.9 -7.4 3.3 54.5 Ten Acres Planted Residual Returns2 163.3 189.7 219.8 235.0 235.0 5100 Alone Tappers' Income 164.5 178.8 195.0 203.1 203.1 Processing Interest 98. 8 93. 3 87. 9 82. 4 5. 5 Plant Net Revenue -100.0 -82.4 -63.0 -50.5 26.4 1 See Chapter VII for returns under Alternative Price and Cost Assumptions. 2 Sum of following three items. 267 Table 12: Returns from Private Processing on a 20—Acre Ordinary molding: Ten Per Cent Price Decrease and a Ten Per Cent Cost Increase; Alternative Planting Method and Processing Plants for Selected Years, Midwestern Nigeria, 1964. Processing Planting Zear Plant Method Revenue Source 10 ll 12 13 27 ----§hulims_r_snlszs------ 1:222 Inter- Residual Returnsz 186.2 212.5 242.7 257.8 257.8 Processing Planted Tappers' Income 164.5 178.8 195.0 203.1 203.1 Plant Interest 67.3 63.6 59.8 56.1 3.7 Net Revenue -45.7 -29.8 -12.2 -l.4 51.0 c222 Planted Residual Returns2 159.9 186.2 216.4 231.6 231.6 Processing Alone Tappers' Income 164. 5 178.8 195.0 203.1 203.1 Plant Interest 100.4 94.8 89.2 83.6 5.6 Net Revenue -105.0 -87.3 ~43.2 -30.5 22.9 £100 Inter- Residual Returns2 205.2 231.5 261.6 276.8 276.8 Processing Planted Tappers' Income 164.5 178.8 195.0 203.1 203.1 Plant Interest 58.8 55.5 52.2 49.0 3.3 Net Revenue -18.l -8.4 14.4 24.7 70.4 2.100 Planted Residual Returns2 178.9 205.2 235.4 250.5 250.5 Processing Alone Tappers' Income 164. 5 178.8 195.0 203.1 203.1 Plant Interest 91.8 86.7 81.6 76.5 5.1 Net Revenue -77. 5 -60.3 -41.3 -29.1 42.3 lSee Chapter VII for returns with Alternative Cost and Price Assumptions. 23111: of following three items. APPENDIX G ov Sma 1 olde Bud ets Table 1. Yield of Dry Rubber: High, Medium and low Assumptions, Midwestern Nigeria, 1964. Mature _X§nr Yield Product 6 7 8 9 10 11 12 13-29 ------Pounds Per Acre Per Annum—~—— 1000 Sheet 243.0 378.0 522.0 621.0 729.0 792.0 864.0 900.0 Pounds Lump 81.0 126.0 174.0 207.0 243.0 264.0 288.0 300.0 800 Sheet 194.4 302.4 417.6 496.8 583.2 633.6 691.2 720.0 Pounds Lump 64.8 100.8 139.2 165.6 194.4 211.2 230.4 240.0 600 Sheet 145.8 226.8 313.2 372.6 437.4 475.2 518.4 540.0 Pounds Lump 48.6 75.6 104.4 124.2 145.8 158.4 172.8 180. Table 2. Prices of High Quality mep and Sheet: Alternative Prices, Midwestern Nigeria, 1964. Current 10% Price 20% Price Product Prices Decrease Decrease — __ Prices Per Pound =-=—=—_ —_ — Lunp 2.70 2.43 ‘ 2.16 Sheet 13.88 12.492 11.104 268 269 Table 3. Gross Revenue, Expenses and Residual Returns Elem a FiveeAcre Improved Smallholding Yielding 1,000 Pounds: Alternative Prices, and Processing Plant, Midwestern Nigeria, 1964. Price and ingggwgzngn§§3n3_fgnnn, % 100 Processin Plant Cost level Revenue or Expense 6 13 29 o 13 29 unauamaicm Shillings P6P Acre —“ — Current Gross Revenue 299.3 1108.5 1108.5 299.3 1108.5 1108.5 Prices Tapping, Collegting ggsts and ProcessingJL 27.9 45.3 46.3 27.9 46.3 “6'3 Plant Upkeep 88.8 88.8 88.8 40.0 40.0 40.0 Depreciation 59.2 59.2 59.2 38.8 38.8 38.8 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 104.5 895.3 895.3 173.9 964.4 964.4 10% Price Gross Revenue 269.4 997.? 997.7 269.4 997.7 997.7 Decrease . .- . and 10% Tapplng, tolleftlng " , Cost In- and Processing 27,9 uncj 40.3 27.9 46.3 46.3 crease Plant Upkeep 88.8. 88.8 88,8 40.0 40.0 40.0 Depreciation 61.+ 61.4 61.4 41.1 41.1 41.1 Tools 18.) 18.9 18.9 18.9 18.9 18.9 Residual Returns2 782.3 782.3 782.3 141.5 851.4 851.4 20% Price Gross Revenue 239.4 886.8 886.8 239.4 886.8 886.8 De angrggge Tapping, Colleiting Cost and Processing 27.9 46.3 46.3 27.9 46.3 46.3 Increase Plant Upkeep 88.8 88.8 88.8 40.0 40.0 40.0 Depreciation 54.4 54.4 54.4 43.3 43.3 43.3 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returnsz 49.5 678.4 678.4 109.3 738.3 738.3 1Does not include tappers' wage. Sum of net revenue, wages and interest. 2?0 Table 4. Gross Revenue, Expenses and Residual Returns from a TeneAcre Improved Smallholding Yielding 1,000 Pounds: Alternative Prices, Costs and Processing Plant for Selected Years, Midwestern Nigeria, 1964. Price and 5222 Processing Plant £100 Processing Plant Cost Level Revenue or Expense 13 29 13 29 am--.mShillings Per cre---~m Current Gross Revenue 299.3 1,108.5 1,108.5 299.3 1,108.5 1,108.5 Prices and Tapping, Collecting 27.9 116.3 146.3 27.9 “6.3 156.3 Costs and Process Plant Upkeep mm 114.11 mm 20.0 20.0 20.0 Depreciation 90.7 “0.7 #0.? 30.5 30.5 30.5 T0013 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returnez 167.11 958.2 958.2 202.0 992.7 992.7 10% Price Gross Revenue 269.9 997.7 99?.7 269.h 997.7 997.7 Decrease Tapping, Collecting 27.9 96.3 “6.3 27.9 46.3 46.3 and and Processing1 10$ Cost Plant Upkeep 118.8 248.1; 1111.11 20.0 20.0 20.0 Increase Depreciation 92.9 92.9 92.9 32.7 32.7 32.? Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 135.3 895.2 845.2 169.9 879.8 879-8 20% Price Gross Revenue 239.9 886.8 886.8 239.9 886.8 886.8 Decrease Tapping, Collecting 27.9 96.3 “6.3 27.9 “6.3 “6.3 and and Process 20$ Cost Plant Upkeep 148.11 214.8 1.11.14 20.0 20.0 20.0 Increase Depreciation 95.1 85.1 95.1 3h.9 3h.9 34.9 T0013 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returnsz 103.2 732.0 732.0 137.7 766.6 766.6 1Does not include Tappers' wages. 2311111 of net revenue, wages and interest. Table 5. Gross Revenue, Expenses and Residual Returns from a 20-Acre Improved Smallholding Yielding 1,000 Pounds: Processing Plant for Selected.Years, Midwestern Nigeria, 1964. Alternative Prices, Costs and Price and Revenue and £222 ocess Plant £100 Processing Plant Cost Level Expenses 13 29 13 29 ~nn-Sgll_ings Per Acre-v-m- Current Gross Revenue 299.3 1,108.5 1,108.5 299.3 1,108.5 1,108.5 Prices and Tapping, Collecting 27.9 86.3 86.3 27.9 86.3 86.3 Costs and Processing1 Plant Upkeep 22.2 22.2 22.2 10.0 10.0 10.0 Depreciation 31.0 31.0 31.0 26.3 26.3 26.3 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 199.3 990.0 990.0 216.1 1,006.9 1,006.9 101 Price Gross Revenue 269.“ 997.7 997.7 269.“ 997.7 997.7 Decrease Tapping, Collecting 27.9 “6.3 “6.3 27.9 “6.3 “6.3 10$ Cost and Processing1 Increase Plant Upkeep 22.2 22.2 22.2 10.0 10.0 10.0 Depreciation 33.6 33.6 33.6 28.6 28.6 28.6 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 ‘166.8 876.7 876.7 189.0 893.9 893.9 20$ Price Gross Revenue 239.“ 886.8 886.8 239.4 886.8 886.8 Decrease Tapping, Colle 27.9 96.3 96.3 27.9 96.3 46.3 and and Processing 20% Cost Plant Upkeep 22.2 22.2 22.2 10.0 10.0 10.0 Increase Depreciation 35.9 35.9 35.9 30.8 30.8 30.8 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 138.6 763.5 763.5 161.8 780.8 780.8 1Does not include TapperSV'wages. 2 Sum of net revenue, wages and interest. 272 Table 6. Gross Revenue, Expenses and Residual Returns from.s‘Five—Acre Improved Smallholding Yielding 800 Pounds: Alternative Prices, Costs and Processing Plant lMidwestern Nigeria, 1968. Price and £222 Processggg Plant £200 Processipg Plant Cost Level Revenue or Expense 13 29 13 29 mu-oomShillings 2e; Acre ------ Current Gross Revenue 239.8 886.8 886.8 239.8 886.8 886.8 Prices and Tapping, Collecting 27.2 83.5 83.5 27.2 83.5 83.5 Costs and Processing1 Plant Upkeep 88.8 88.8 88.8 80.0 80.0 40.0 Depreciation 59.2 59.2 59.2 38.8 38.8 38.8 T0013 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 85.8 676. 676.3 118.5 785.5 785.5 10% Price Gross Revenue 215.5 798.1 798.1 215.5 798.1 798.1 Decrease Tapping, Collecting 27.2 93.5 83.5 27.2 83.5 93.5 and and Processing1 10% Cost Plant Upkeep 88.8 88.8 88.8 80.0 80.0 90.0 Increase Depreciation 61.8 61.“ 61.9 81.1 81.1 41.1 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 19.2 585.5 585.5 88.3 658.6 658.6 20$ Price Gross Revenue 191.6 709.8 709.8 191.6 709.8 709.8 Decrease Tapping, Collecting 27.2 93.5 93.5 27.2 43.5 “3-5 and and Processing 20% Cost Plant Upkeep 88.8 88.8 88.8 40.0 “0.0 40.0 Increase Depreciation 58.8 59.“ 5“.“ 9 .3 43.3 “3.3 Tools 18.9 18.9 18.9 1 .9 18.9 18.9 Residual Returnsz 2.3 503.9 503.9 10.8 563.7 563.7 1-Does not include Tappers' wages. Sum.of net revenue, wages and interest. 273 Gross Revenue, Expenses and Residual Returns from a Ten-Acre Improved Smallholding Yielding 800 Pounds: Alternative Prices, Costs and Processing Plant for Selected Years, Midwestern Nigeria, 1968. Table 7. Price and £222 Processin Plant £100 ocess 1'. Cost Level Revenue or Expense 6 13 29 13 29 ----- 5&5 Per Aege-«n- Current Gross Revenue 239.8 886.8 886.8 239.8 886.8 886.8 Prices and Tapping, Collecting 27.2 83.5 83.5 27.2 83.5 83.5 Costs and Proces Plant Upkeep 88.8 88.8 88.8 20.0 20.0 20.0 Depreciation 80.7 80.7 80.7 30.5 30.5 30.5 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 108.2 739.3 739.3 182.8 773.9 773.9 101 Price Gross Revenue 215. 5 798.1 798.1 215.5 798.1 798.1 Decrease Tapping, Collecting 27.2 83.5 83.5 27.2 83.5 “3.5 am am Process 10$ Cost Plant Upkeep 88.8 88.8 88.8 20.0 20.0 20.0 Increase Depreciation 82 . 9 82 . 9 82 . 9 32 . 7 32 . 7 32 . 7 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 82.1 688.8 688.8 116.7 683.0 683.0 201 Price Gross Revenue 191.6 709.8 709.8 191.6 709.8 709.8 Decrease Tapping, Collecting 27.2 83.5 83.5 27.2 83.5 43.5 and and Processing]- 205 Cost Plant Upkeep 88.8 88.8 88.8 20.0 20.0 20.0 Increase Depreciation 85 . 1 85 . l 85 . l 38. 9 38. 9 38. 9 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 56.0 557.5 557.5 90.6 592.1 592.1 1-Does not include Tappers' wages. 2 Sum of net revenue, wages and interest. Table 8. 278 Alternative Prices, Costs and Gross Revenue, EXpenses and Residual Returns from a 20chre Improved Smallholding Yielding 800 Pounds: Processing Plants for Selected Years, Midwestern.Nigeria, 1968. Price and £222 ocess Plant W Cost Level Revenue or Expense 6 13 29 13 29 ...... Shilliggs Eer.Ac:g----- Current Gross Revenue 239.8 886.8 886.8 239.8 886.8 886.8 Prices and Tapping, Collecting 27.2 83.5 83.5 27.2 83.5 43.5 Costs and Processing1 Plant Upkeep 22.2 22.2 22.2 10.0 10.0 10.0 Depreciation 31.0 31.0 31.0 26.3 26.3 26.3 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 180.2 771.2 771.2 157.1 788.1 788.1 10$ Price Gross Revenue 215.5 798.1 798.1 215.5 798.1 798.1 Decrease Tapping, Collecting 27.2 83.5 83.5 27.2 83.5 “3.5 and and Processing1 10$ Cost Plant Upkeep 22.2 22.2 22.2 10.0 10.0 10.0 Increase Depreciation 33.6 33.6 33.6 28.6 28.6 28.6 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 113.6 679.9 679.9 130.8 697.1 697.1 20$ Price Gross Revenue 191.6 709.8 709.8 191.6 709.8 709.8 Decrease Tapping, Collecting 27.2 83.5 83.5 27.2 83.5 43.5 and and Processing1 20% Cost Plant Upkeep 22.2 22.2 22.2 10.0 10.0 10.0 Increase Depreciation 35.9 35.9 35.9 30.8 30.8 30.8 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 87.8 589.0 589.0 108.7 606.2 606.2 1Does not include Tappers' wages. 2511111 of net revenue, wages and interest. 275 Table 9. Gross Revenue, Expenses and Residual Returns from a Five-Acre Improved Smallholding Yielding 600 Pounds: Alternative Prices, Costs and Processing Plants for Selected Years, Midwestern Nigeria, 1968. Price and 2222 Processing Plant E100 Process Plant Cost Level Revenue or Expense 6 13 29 13 29 - ---- Shilli_ngs 2e; Acre-«u- Current Gross Revenue 179.6 665.1 665.1 179.6 665.1 665.1 Prices and Tapping, Collecting 26.8 80.7 80.7 26.8 80.7 80.? Costs and Process Plant Upkeep 88.8 88.8 88.8 80.0 80.0 80.0 Depreciation 59.2 59.2 59.2 38.8 38.8 38.8 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 -l3.7 857.8 857.8 55.5 526.7 526.7 10% Price Gross Revenue 161.6 598.6 598.6 161.6 598.6 598.6 :Uecrease Tapping, Colle ting 26.8 80.7 80.7 26.8 80.7 80.7 and and Processi 10% Cost Plant Upkeep 88.8 88.8 88.8 80.0 80.0 80.0 Increase Depreciation 61.8 61.8 61.8 81.1 81.1 81.1 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 —33.9 388.8 388.8 35.2 857.9 857.9 20% Price Gross Revenue 183.7 532.1 532.1 183.7 532.1 532-1 Decrease Tapping, Collecting 26.8 80.7 80.7 26.8 80.7 80.7 and and Processing1 20% Cost Plant Upkeep 88.8 88.8 88.8 80.0 80.0 80.0 Increase Depreciation 58.8 58.8 58.8 “3.3 43.3 43-3 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns -88.8 329.3 329.3 15.1 389.2 389.2 1Does not include Tappers' wages. 28m of net revenue, wages and interest. 276 Table 10. Gross Revenue, Expenses and Residual Returns from a TenaAcre Improved Smallholding Yielding 600 Pounds: Alternative Prices, Costs and Processing Plant for Selected Years, Midwestern Nigeria, 1968. Price and £222 ocess Plant i100 Eggcessing Plant Cost Level Revenue or Expense 6 13 29 13 29 ------ W ----- Current Gross Revenue 179.6 665.1 665.1 171.6 665.1 565.1 Prices and Tapping, Collecting 26.8 80.7 80.7 26.8 80.7 80.7 Costs and Processing1 Plant Upkeep 88.8 88.8 88.8 20.0 20.0 20.0 Depreciation 80.7 80.7 80.7 80.7 80.7 80.7 Tools 18.9 ‘18.9 18.9 18.9 18.9 18.9 Residual Returns2 89.2 520.8 520.8 83.8 555.0 555.0 10% Price Gross Revenue 161.6 598.6 598.6 161.6 598.6 598.6 Decrease Tapping, Colle ting 26.8 80.7 80.7 26.8 80.7 80.7 and and Processin 10% Cost Plant Upkeep 88.8 88.8 88.8 20.0 20.0 20.0 Increase Depreciation 82.9 82.9 82.9 32.7 32.7 32.? Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 29.0 851.7 851.7 63.6 886.3 886.3 20% Price Gross Revenue 183.7 532.1 532.1 183.7 532.1 532.1 Decrease Tapping, Collecting 26.8 80.7 80.7 26.8 80.7 80.7 and and Processing1 20% Cost Plant Upkeep 88.8 88.8 88.8 20.0 20.0 20.0 Increase Depreciation 85.1 85.1 85.1 38.9 38.9 38.9 T0018 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 8.9 383.0 383.0 83.5 817.6 817.6 1Does not include Tappers' wages. 2Sum of net revenue, wages and interest. 277 Table 11. Gross Revenue, Expenses and Residual Returns from.a 20~Acre Improved Smallholding Yielding 600 Pounds: Alternative Prices, Costs and Processing Plant for Selected.Years, Midwestern Nigeria, 1968. Price and ‘ £222 Processing Plant 2100 t Cost Level Revenue or Expense 13 29 13 29 "flaw-""- Current Gross Revenue 179.6 665.1 665.1 179.6 665.1 665.1 Prices and Tapping, Collecting 26.8 80.7 80.7 26.8 80.7 8037 Costs and Processing1 Plant Upkeep 22.2 22.2 22.2 10.0 10.0 10.0 Depreciation 31.0 31.0 31.0 26.3 26.3 26.3 Tools . 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 81.1 552.3 552.3 98.0 569.2 569.2 10% Price Gross Revenue 161.6 598.6 598.6 161.6 598.6 598.6 Decrease Tapping, Colle ting 26.8 80.7 80.7 26.8 80.7 “0.7 and and Processingi 10% Cost Plant Upkeep 22.2 22.2 22.2 10.0 10.0 10.0 Increase Depreciation 33.6 33.6 33.6 28.6 '28.6 28.6 Tools 18.9 18.9 18.9 18.9 18.9 13.9 Residual Returns2 60.5 883.2 883.2 77.7 500.8 500.8 20% Price Gross Revenue 183.7 532.1 532.1 183.7 532.1 532.1 Decrease Tapping, Colleiting 26.8 80.7 80.7 26.8 80.7 “0.7 and and Processing 203: Cost Plant Upkeep 22.2 22.2 22.2 10.0 10.0 10.0 Increase Depreciation 35.9 35.9 35.9 30.8 30.8 30.8 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 80.3 815.0 815.0 58.2 832.3 832.3 :1Does not include Tappers' wages. 2Sum of net revenue, wages and interest. 278 Table 12. Gross Revenues, Expenses and Residual Returns from Processing COOperathmmyon.an Improved Smallholdings Alternative Yields, Prices and Costs for Selected Years, Midwestern Nigeria, 1968. Price and 1 000 Pounds 800 Pounds Cost Level Bezenue or gapense 6 13, .29 6 13, .29 nnnnnn Shillings Peg Agze------ Current Gross Revenue 299.3 1,108.5 1,108.5 239.8 886.8 886.8 Prices and Tapping, Collecting 177.9 196.3 196.3 187.2 163.5 163.5 Costs and Processing1 - Depreciation 22.2 22.2 22.2 22.2 22.2 22.2 Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 80.3 871.1 871.1 51.2 682.2 682.2 10% Price Gross Revenue 269.8 997.7 997.7 215.5 798.1 798.1 Decrease Tapping, Collefting 177.9 196.3 196.3 187.2 163.5 163.5 and and Processing 10% Cost Depreciation 28.8 28.8 28.8 28.8 28.8 28.8 Increase Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 88.2 758.1 758.1 25.0 591.3 591.3 20% Price Gross Revenue 239.8 886.8 886.8 191.6 709.8 709.8 Decrease Tapping, Collecting 177.9 196.3 196.3 187.2 163.5 163.5 and and Processing 20% Cost Depreciation 26.6 26.6 26.6 26.6 26.6 26.6 Increase Tools 18.9 18.9 18.9 18.9 18.9 18.9 Residual Returns2 16.0 688.9 688.9 -1.1 500.8 500.8 279 Table 12. (Continued) Price and 600 Poungn Cost Level Revenue or Expense 6’ 13 291 ------ Shillings Per Acre------ Current Gross Revenue 179.6 665.1 665.1 Prices and Tapping, Collecting 116.8 130.7 130.7 Costs and Processing1 Depreciation 22.2 22.2 22.2 Tools 18.9 18.9 18.9 Residual Returns2 22.1 893.3 893.3 10% Price Gross Revenue 161.6 598.6 598.6 Decrease Tapping, Collecting 116.8 130.7 130.7 and and Processing1 10% Cost Depreciation 28.8 28.8 28.8 Increase Tools 18.9 18.9 18.9 Residual Returns2 1.9 828.6 828.6 20% Price Gross Revenue 183 7 532.1 532.1 Decrease Tapping, Collecting 116.8 130.7 130.7 and and Processing1 20% Cost Depreciation 26.6 26.6 26.6 Increase Tools 18.9 18.9 18.9 Residual Returns2 -18.2 355.9 355.9 1. Does not include Tappers' wages. 2. Sum of net revenue, wages and interest. BIBLIOGRAPHY Books Bauer, P. T. The Rubber Industry. London: The London School of Economics and Political Science, 1988. Bevan, J. W. L. A Study of Yieldsa labour Innuts and Incomes on.Rubber Smallholdings in the Coastal Area of Selangor. Kuala Immpur: De- partment of Agriculture, University of Malaya, 1962. Bradbury, R. E. The Benin Kingdom and the EdouSpeaking Peonles of South ‘Western Nigeria. Part XIII of Western Africa. Edited by Daryll Forde. London: International African Institute, 1957. Bradford, Lawrence A., and Johnson, Glenn L. Farm Management Analzsig. New York: John Wiley & Sons, Inc., 1953. Buchanan, K. M., and Pugh, J. C. Lnnd and People in Nigeria. London: University of London Press Ltd., 1955. Christy, Cuthbert. The African Rubber Industry and Funtumia elastica. London: John Bale, Sons & Danielsson, Limited, 1911. Commodity Research Bureau, Inc. anncdity Year Book 1280. New York: Commodity Research Bureau, Inc., 1980. Commodity Research Bureau, Inc. ngmgditanear Book 199;. New York: Commodity Research Bureau, Inc., 1981. Commodity Research Bureau, Inc. ngngdity Year Book 1950. 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