Efficiency Appraisal of Cocoa Farming in Ondo State, Nigeria

Abstract

The study analyzed the costs and returns of cocoa farming in Ondo State, Nigeria. The socio-economic characteristics, sources of finance, cost and returns and constrain associated with cocoa production were examined. Data were collected from 90 respondents by means of structured questionnaire. Data collected were analyzed using descriptive statistics, ranking and budgetary analysis. The results revealed that, average age of the respondents was 57.2 years. This indicates that majority of the respondents are aged, male (78.9%), married (75.6%), had more than 20 years farming experience (53.3%) and source their capital through personal savings (94.4%). The gross margin analysis showed that cocoa production incurred a total variable cost of ₦64,588.38 and earned total revenue of ₦90,584.50 per hectare with gross margin of ₦25,995.12 and total cost of ₦74,059.09 and net revenue of ₦16,524.41. The Benefit Cost Ratio (BCR) was1.22. This is an indication that for every naira invested on cocoa production there is a gain of 22 kobo. The RTS of the variable inputs was 1.359 which implies that cocoa production resources were underutilized. The analysis of the estimated gamma coefficient (γ) showed that there was technical inefficiency effect in the production of cocoa in the study area. The major constraints to cocoa production were inadequate credit facilities, high cost of transportation, labour inadequacy, low produce price, high cost of fertilizer, pest and diseases, theft, bad weather and poor infrastructure. The study recommends, Construction of good road by government to reduce cost of transport and spoilage. Introduction of extension education programmes for the Farmers by government, to improve their technical knowledge and skills and Cocoa farmers should be encouraged by Government and Non-Governmental organization to have access to adult literacy education in order to enlightening them on the benefit of loan from formal source.