Abstract
In Nigeria, cultivation of Industrial Sugarcane has suffered a serious setback due to poor performance of government established and owned sugar companies. Arising from over-dependence on sugar importation, development in the Nigerian sugar industry has been very slow for the past three decades while the domestic supply of sugar had lagged behind the demand for the product, inspite of the country’s comparative advantages for sugarcane production. This study is therefore necessary to examine profitability and competitiveness of sugarcane enterprises for attracting private investment and employment generation in the country. The study employed financial and economic indicators and the value chain approach in analyzing primary data collected in a sample survey of various actors across the sugarcane value chain. Results of the study revealed that every stage of the commodity chain is profitable. Domestic Resource Cost (DRC) Indices ranged from 1.8 for medium scale and 2.3for small scale operators. Thus sugarcane production is not internationally competitive. To develop the industry, investment in infrastructure and new innovative processing technology is required for the modernization and the expansion of local processing industries. Key words: Agro-processing, investment, employment, income.
Highlights
Greater integration of rural economies into the world economy has intensified the need for Nigerian agriculture to change and be globally competitive
The structures of financial costs of the sugarcane enterprise per metric tonne across the various stages of the commodity chain in Nigeria are summarised in Table 4 while Figures 1 to 4 indicated the graphical illustrations of the cost structures at the farm gate, assembly, processing, and logistic trading stages respectively
These are purchased inputs (31%) in which fertilizer dominates with 23% share of the total cost, hired labour accounts for 21%, renting of equipment accounts for 17%, while interest paid accounts for 13%
Summary
Greater integration of rural economies into the world economy has intensified the need for Nigerian agriculture to change and be globally competitive. This imperative necessitates policies favouring greater competition, support for small and medium scale enterprises broadly, better resource allocation and stable production of raw materials. A stable production of raw materials provides a competitive and stable supply chain from which other competitive agro-processing industries can emerge. This has been problematic due to recurring failure of government programmes of agrarian reform and the resulting marginalisation of the rural economies. By the 2000s, Nigeria had lost her dominant position in exports of these key crops and the share of exports of each of these crops
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