ESTIMATION OF COSTS AND RETURN OF SWEET POTATO PRODUCTION IN OFFA LGA, KWARA STATE, NIGERIA

Abstract

Offa is the second largest town in Kwara State, located in central Nigeria with geographic coordinates 8'9N 4'43E. With a population of about 120,100 inhabitants. Located in a savanna vegetation region, Offa is well known for cultivation of sweet potatoes and maize. Offa LGA was purposively selected as it is the major sweet potato producing areas in the State. A two-stage sampling procedure was used in random selection of 120 sweet potato farmers for the study. Data collected were analyzed using descriptive statistics and budgetary technique. The results showed that the estimated costs and return for one hectare of sweet potatoes enterprises were ₦64,100.00 and ₦121,700.00, respectively, with the labour cost having the highest share of 39.78% of total cost followed by seed cost (11.7%) and fertilizer cost (10.06%). The profit margin percentage of 47.3% and return per capital outlay of 0.9 was noted, impliedly that for every ₦1 invested in sweet potato production enterprise there is a return of ₦0.90k to the enterprise. An operating cash expenses ratio of 39.5% was obtained along with benefit cost ratio (BCR) of ₦1.89k implying that the enterprise is profitable even with little capital invested into it. A positive gross margin (₦73,600) and net farm income (₦57,600) was also obtained indicating a profitable sweet potato production enterprise. The study concluded that with the values of all the performance indicator used, sweet potato enterprise could be said to be profitable, and profitability can still be increased under improved management practices.