Cost and Returns Analysis of Groundnut Production in Qua’an Pan Local Government Area of Plateau State, Nigeria

Abstract

This study assessed cost and returns analysis of groundnut production in Qua’an Pan Local Government Area of Plateau State, Nigeria. The specific objectives were to determine the socio economic characteristics of groundnut producers in the study area, estimate the cost and returns of groundnut production, determine the input and output relationship in groundnut production and identify the constraints faced by groundnut farmers in the study area. Multistage sampling technique was used in selecting 150 respondents for the study. Primary data were collected through the use of structured questionnaires and interview technique and were subjected to both descriptive and inferential statistics. The results obtained from the study revealed that the mean age of the respondents was 38 years with males dominating (82%) the groundnut production enterprise in the study area. Greater (85%) percentages of respondents were married with majority (64%) of them having primary school education. The respondents had an average household size of nine (9) persons, a mean farming experience of 9.3 years and an average farm size of 3.0 hectares. The result also revealed that majority (72%) of the respondents did not belong to any cooperative/ farming association. The result indicates that majority (79%) of the groundnut farmers acquired their farmland by inheritance. Groundnut production in the study area is profitable. The average output obtained per hectare was 696 kg at the prevailing selling price of ₦280/kg. The total revenue (TR), gross margin (GM) and, net farm income (NFI) per hectare obtained were ₦194880, ₦139380 and ₦123730 respectively. The return on naira invested (RNI) by farmers in the study area was ₦1.70 indicating that for every one naira invested, ₦1.70 profit was gained. The result of the double log production function analysis shows that farm size, cost of fertilizer and cost of labour were statistically significant and influenced the profitability of groundnut production. Major constraints to groundnut production in the study area include; high cost of inputs (64 %), high cost of labour (49 %), lack of organized market system (47%), land tenure (42%) among others. The study recommends that groundnut stakeholders and research institutes should work more on introducing new improved groundnut varieties. Government should subsidize groundnut inputs like recommended fertilizer and herbicides so as to motivate farmers to grow groundnut. Government should establish organized marketing systems where farmers will have proper and reliable linkages with buyers thereby reducing the undue exploitative tendencies of the middlemen. Improved storage facilities should be provided so that farmers could store their produce to avoid spoilage and for sale during times of scarcity.