ABSTRACT
This study focuses on effective accounting
practices in agribusiness and its prospects for economic growth. A proper research was carried out to examine the extent to which farm record keeping
have a relationship with business planning and decision making process, to assess the effect of
farm record keeping on profitability and productivity of poultry agribusiness,
and to ascertain the extent to which farm record keeping enhances poultry
business growth and success.In carrying out the
research, research questions are been set in order to direct the researcher in
administration of questionnaires. There is also review of relevant literature
on related topics to the study. Questionnaires which was the instrument used
was given to 120 small scale poultry
farmers in Ojo Local Government Area of Lagos State by the researcher. A
total 120 copies of questionnaire were distributed but 97 copies were completed
and returned while 13 copies were not returned. Out of the 97 copies that were
returned, 84 copies were properly completed given a response rate of 70% while
13 copies had some degrees of omission that rendered them invalid and were not
used in the data analysis. One of the conclusions derived from the analyzed
result is that record keeping is essential for decision making and
business adjustments and proper accounting assists in budget and resource
allocation.
The study recommends
that small scale poultry farmers should ensure the adoption of good
accounting practices in the running of their farms. They should also ensure
that they keep accurate records of the farm activities and operations since
findings of the study showed that accounting practices provides information on
cash-flow andaccounting
statements increases the chance of business success and growth, which in turn
boost the economy.
TABLE OF CONTENTS
Abstract
CHAPTER ONE
INTRODUCTION
1.1
Background to the Study
1.2
Statement of the Problems
1.3
Objectives of the Study
1.4
Research Questions
1.5
Research Hypotheses
1.6
Significance of the Study
1.7
Scope of the Study
1.8
Justification of the Study
1.9
Organisation of the Study
1.10 Organisation
of the Study
CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
2.2 Conceptual Framework of the Study
2.2.1 Poultry Accounting and Record Keeping
2.2.2 Types of Poultry Records
2.2.3 Concept of Bookkeeping
2.2.4 Farmers’
Perception of the Importance of Farm Records and Bookkeeping
2.2.5 Small Scale Poultry
2.3.6 Concept of Accounting Practices
2.2.7 Objectives of Accounting
2.2.8 Accounting Statements
2.2.9 Constraints of Poultry Record Keeping
2.2.10 Consequences of Failure of Record Keeping
2.2.11 Business Performance
2.3 Theoretical Framework of the Study
2.3.1 Contingency Theory
2.4 Empirical Review of the Study
CHAPTER THREE
METHODOLOGY
3.1 Research Design
3.2 Area of Study
3.3 Sampling size and Sampling Technique
3.4 Data type and Data Collection
3.5 Analytical Method
3.5.1 Descriptive Statistics
3.5.2 Likert Scale
3.5.3 Chi-Square
CHAPTER FOUR
DATA PRESENTATION, ANALYSISAND
INTERPRETATION
4.1 Introduction
4.2 Data Presentation
4.3 Analysis of Responses Relating to
Research Questions
4.4 Test of Hypotheses
CHAPTER
FIVE
SUMMARY,
RECOMMENDATIONS AND CONCLUSION
5.1 Summary
of Findings
5.2 Conclusion
5.3 Recommendations
References
Appendix
CHAPTER ONE
INTRODUCTION
1.1 Background
to the Study
Organisations
globally are established to accomplish certain goals and objectives of their
owners in the course of their operations which may include high productivity,
profitability, market share, customer satisfaction and overall performance. For
them to achieve these goals and objectives there is need for proper recording
of all transactions that occurs in their operations. The relationship between effective
accounting procedures and the performance of agribusiness cannot be
overemphasized because it is crucial in the management of the resources of
agribusiness. Agribusiness is believed to be the roadmap to attaining sustainable
growth and development in Nigeria as over 70% of organisations in Nigeria depends
on the products of agribusiness for their raw materials (Adeyemi & Badmus, 2010;Odetola & Etumnu, 2013).
Also,
there is a general consensus among various stakeholders in Nigeria that the pathway
to reduce poverty, improve food production and ensure food security, alongside
wealth creation essentially lies on the performance of agribusiness in Nigeria.However, the ability of agribusiness
to play this important role in Nigeria, it must be managed in an efficient
manner and this cannot be achieved without effective accounting practices. Many
agribusinesses are not able to expand their business operations and make good
profits not because they do not make sales but due to their inability to keep proper
records all their business transactions (Aremu
& Adeyemi, 2011). The implication of this in
most case is that most of the owners of agribusiness cannot separate their
personal money from the business money and this often leads to spending of the
business money on personal need without accounting for them.
Agribusiness
refers to any business that is involved in the production, processing and
distribution of agrarian services, and all its inclusive activities (Okoli, 2011). Agribusiness
is an industrial sector that has responded to market forces, moving away from
the localized subsistence farming to developing a working commercial and
technical culture. Agribusiness in it contemporary times cuts across all market
processes such as production, inventory, marketing, sales, financial analysis,
profitability and probable expansion (Safiriyu,
2012). It is a movement towards meeting
consumer needs by integrating production and business processes.
Accounting
management in agribusiness implies that producers have to produce quality
products at a competitive cost, to stay profitable and remain in business (Onaolapo & Adegbite, 2014). An estimated 70%
of agribusinesses remain in their poor financial state because they do not have
proper record keeping that will sustain their viability in the commercial
environment.
The
potentials of Poultry business has long been recognized as an important
component of the Nigerian economy, in particular for the sector’s contribution
to GDP earnings. Nigeria’s poultry value chain presently contributes 25% to the
agricultural GDP at $8 billion (NationalDailyng.com, 2017). Although the
poultry business has practical differences from other business sectors, there
is little to be gained by treating it differently. In fact, there are
significant rewards in knowing the similarities of agribusiness and the
business world at large. Recognising these similarities will reduce the
folklores proffered about poultry in the past, and will assist management in
viewing their role as effective managers of valuable and limited resources (Lalin & Sabir, 2010).
Consumers
may be anxious about production, hygiene issues, diseases incidence, poultry
welfare, biodiversity, genetic engineering and food quality, it is expected
that managers create a perception of quality, through record keeping and data
collection like the other businesses (Ismail
& King, 2007). Subsequently, changing social
attitudes and values impact directly upon poultry processes and
decision-making. Poultry business is experiencing a reduction in available
resources due to the urbanization of food production zones. This means that as
the State’s population increases, more pressure is placed on the food
production sector to increase yield within social constrictions and diminishing
resources.
Further
problems arise because the relative contribution of primary production to the
economy is declining, which in turn has battered the political influence of the
sector. The globalisation of the Lagos State economy, the rapid change in
computer technology and communication systems has increased the rate at which
information and businesses are processed, all having a direct impact on
agribusiness management.
Bookkeeping
in poultry business involves access to detailed physical and financial
information, which may include egg and poultry meat yield, livestock numeracy,
and movement and property map (Eric &
Gabriel, 2012). Bookkeeping is a vital input to
poultry business and is responsible for resource allocation, decision-making
and projected enterprise expansion.
Poultry
production is a very significant source of livelihoods for most rural
communities, as it is it provides available cash for emergency needs (FASDEP,
2002), supplies the fast-growing human population with high-quality protein,
contributes to food security, poverty alleviation and ecologically sound
management of natural resources (Guẽye, 2002). Onuekwusi (2001) suggests that
since there is a current rise in the cost of production of cattle, sheep, and
goat meat, consumer preferences have shifted to poultry meat in recent times. Ademola, Samuel and Ifedolapo (2012)
assert thatone possible approach to improving
small-scale farming is through proper farm record keeping.According toAdemola et al (2012), without
proper farm record keeping, agribusiness will not be able to keep pace with the
high completion prevalent in today’s business environment. Similarly, Abdulrasheed, Khadijat and Oyebola (2012),
posit that a farmer who maintains proper farm
records can usually handle problems better than the one who does not and that it
is impossible to manage poultry business in the face of high for poultry products
without maintaining adequate records. The most important aspect of bookkeeping
involves transactions in overhead and other daily expenses. The Lagos State
government in 2012, unveiled a new poultry estate to meet the high demand for
poultry foods and ensure poultry food security in the State. Poultry is
projected to feed at least 18 million persons daily in the State and this is in
line with FAO recommendation on daily consumption of protein. This effectively
translates to over 576, 000 tons of poultry supply at 32g of protein
consumption per head. It is in view of the above that this study seeks to
examine effective accounting practices in agribusiness and its prospects for
economic growthwith particular
focus on selected small scale poultryfarmers
in Ojo Local Government Area.
1.2 Statement of the Problems
Business
innovations and strategies have changed the world significantly, since the turn
of media and more recently internet communications. The advent of electronic media is bridging
the gap in poultry business; online poultry courses, digitalisation of poultry
sales and inventory. There is also the strategic approach to diversification,
when an organisation reaches a reasonable limit in its core businesses, majority
of banks in Nigeria are into poultry among others. Alongside these, poultry is
seeking commercial growth, to capture a systematic way to reach consumer demand
for food and other agricultural products. Before the rise of monetary exchange
in businesses, traditional farming or agriculture was only used for sustenance,
trade-by-barter or in marriage exchanges. This is still relevant today as
poultry farmers do not only practice farming for sustenance, but have also taken
a different approach by implementing
market functions and meeting business market demand differently.
Lagos
State population has grown significantly and so is the rise in demand for
poultry products. Over the years, the state populace has grown by 73% from the
last census (www.populationof2017.com). The state has a present poultry
consumption estimated at 2billion Naira annually and local production of an
estimated 250 million Naira poultry foods. This justifies the request for proper
record keeping in poultry agribusinesses in order to facilitate the development
of the sub–sector. Poultry owners are intensifying their efforts to promote
operations through effective accounting procedures as the volume of their
production and the demand for poultry products is growing tremendously. The
goal of poultry farming is to aid development to the economy in wealth
creation, income equality while meeting its primary objective of bird meat and
egg availability and security.
Accounting
management in poultry will through its value chain, create employment
opportunities for the State from the farm to the point of sales. It provides a
more convenient way to make food readily affordable and ensuring its security.
Accounting management monitors cost, supply chain, and all other business
decisions – it converts the farm to a commercial environment, making decisions
that prompt economic growth. And the
heat for adapting is high, as market respond less to the traditional business
system, there is more demand for better management structure and results.
There
are many challenges facing poultry business in Nigeria. One of the major problem is in the area of
record keeping, which hinders; effective business planning and decision making
process; profitable and productive poultry agribusiness; measurement of poultry business growth and
success. Okantah (2003) stated that
farmers who didn’t have good accounting records, had difficulties in making
business decisions and more than 60% could not obtain credit facilities
(Devonish et al, 2009). The question here
is how do the small-scale poultry owners better their accounting practices for
business planning and decision making? Are they adapting their small
enterprises to improve their profitability and productivity in poultry
agribusiness? How are they keeping track of their poultry business for growth
and success? These questions form the basis of interest in this study.
1.3
Objectives of the Study
This study is set out to achieve
the following objectives:
i.
To examine the extent
to which farm record keeping have a relationship with business planning and
decision making process
ii.
To assess the effect of
farm record keeping on profitability and productivity of poultry agribusiness.
iii.
To ascertain the extent
to which farm record keeping enhances poultry business growth and success.
1.4
Research Questions
The following questions were
formulated to the guide the study.
i.
Does farm record
keeping have any relationship with business planning and decision making
process?
ii.
What are the effect of
farm record keeping on profitability and productivity of poultry agribusiness?
iii.
To what extent does
farm record keeping enhance poultry business growth and success?
1.5 Research Hypotheses
The
following hypotheses will be tested in the curse of this study.
Hypothesis One
H0: There is no
significant relationship between farm record keeping and business planning and
decision making process
Hypothesis Two
H0: Farm record keeping
has no significant effect on profitability and
productivity of poultry agribusiness.
Hypothesis Three
H0: Farm record keeping does
not enhance poultry business growth and success.
1.6
Significance of the Study
The
study shall examine the effect and contributions of accounting practices in agribusiness,
with a focus on small scale poultry farmers. It will provide insight on present
accounting practices, challenges, and options to implement better management
strategies. It will also serve as a reference point to accounting and
bookkeeping experts, small scale farmers, agribusiness managers, poultry
associations and the State government.
1.7 Scope of the Study
This
study examines effective accounting practices in agribusiness and its prospects
for economic growth. The study is limited to selected small scale poultry
farmers in Ojo Local Government Area of Lagos state. There would be a total of
120 respondents who will be selected among small scale poultry farmers within
the LGA.
1.8
Justification of the Study
There is growing evidence
that agribusiness has a crucial role to play in the improvement of the standard of
living of the people in Nigeria. However, most of the agribusinesses in Lagos
State are finding it very difficult to sustain their business operations which
in effect is threatening the very existence of these firms. This
research study is justified because the welfare of the population of any nation is of paramount
importance to both the government and everybody in the nation and there is the
need to evaluate how effective accounting management can be used by
agribusiness to achieve higher performance that guarantee food security to the
nation and survival for the farmers
1.9
Organisation of the Study
The
research work is made up of five chapters. Chapter one is discussed the
background of the study, statement of the problem, aim and objectives of the
study and research questions. It also discussed the significance of the study,
the scope of the study, justification of the study, organisation of the study and
definition of terms.
Chapter
two reviewed the past literature on the subject matter. Chapter three explained
the methods adopted in carrying out the study. It discussed research design,
population of the study, sampling and sampling techniques, data collection
instrument, statistical tools and analytical procedure and limitations of the
research methods. Chapter four discussed data presentation and analysis while
chapter five presented the summary of findings, conclusion and recommendations
of the study.
1.10
Definition of Terms
Accounting
Management: In agribusiness, accounting management
implies that producers have to produce quality products at a competitive cost,
to stay profitable and remain in business.
Agribusiness:
This refers to any business that is involved in the production, processing and
distribution of agrarian services, and all its inclusive activities.
Commercial
Poultry Farmers: These are large poultry farmers who keep large amount
of poultry as a source of earning extra income.
Economic Growth:
This occurs when there is an outward shift or increase in output of a nation.
Food
Supply Chain: This refers to the stages in the chain of food
distribution in the country.
Gross Domestic Product
(GDP): This is the broadest quantitative measure of a
nation’s total economic activity. More specifically, GDP represents the monetary value of all goods and services
produced within a nation’s geographic borders over a specified period of time.
Poultry Food Security: This
refers to the sustainable availability and accessibility of poultry foods to
the people.
Sustainable Food Supply Chain: This
refers toproducing
safe, healthy products in response to market demands and ensures that all
consumers have access to nutritious food and to accurate information about food
products.
Subsistence
Poultry Farmers: These are small poultry farmers who keep a small
amount of poultry for home consumption.