World Journal of Agricultural Research
ISSN (Print): 2333-0643 ISSN (Online): 2333-0678 Website: http://www.sciepub.com/journal/wjar Editor-in-chief: Rener Luciano de Souza Ferraz
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World Journal of Agricultural Research. 2017, 5(2), 58-63
DOI: 10.12691/wjar-5-2-1
Open AccessReview Article

Gross Margin Analysis of Modern Groundnut Oil Extraction in Gombe Metropolis Gombe State, Nigeria

Saleh Abdullahi1, , Kolo Abdulwahab2 and Garba Sadiq Abubakar3

1Agricultural Economics and Extension Department, Federal University Kashere Gombe State

2Agricultural Economics and Extension Department, Abubakar Tafawa Balewa University Bauchi

3Department of Vocational and Technology Education, Abubakar Tafawa Balewa University Bauchi

Pub. Date: February 16, 2017

Cite this paper:
Saleh Abdullahi, Kolo Abdulwahab and Garba Sadiq Abubakar. Gross Margin Analysis of Modern Groundnut Oil Extraction in Gombe Metropolis Gombe State, Nigeria. World Journal of Agricultural Research. 2017; 5(2):58-63. doi: 10.12691/wjar-5-2-1

Abstract

The study examined the profit and market efficiency of small-scale modern groundnut oil extraction of RMP-12 and Ex-dakar varieties in Gombe Metropolis Nigeria. A multi-stage sampling technique was used to select 90 small-scale groundnut oil processors. Data were collected using structured questionnaires and were analysed using farm budget, sherphered-futrel and paired t-test models. The results revealed that costs of shelled groundnut constituted the major (92.3% and 91.6%) components of processing costs for RMP-12 and Ex-dakar groundnut varieties respectively. The gross ratio and operating ratio were all < 1, meaning that the business was profitable. Also, the returns per naira of RMP-12 and Ex-dakar were ₦ 0.17 ($ 0.0006) and ₦ 0.25 ($0.0009) respectively. The marketing coefficient revealed Jekadafari markets (69.97%) to be most efficients in the case of Ex-dakar products. The results further revealed 82.29% and 74.83% of the gross margins of respective RMP-12 and Ex-dakar varieties were spent on marketing costs, with the remaining 17.71% and 25.17% were retained as the net profit and diffrence was significant (P<0.01). Despite the fact that RMP-12 variety gave higher gross income, the study concluded that the Ex-dakar variety performed better. Major impediments to profit and market efficiency were inadequate capital, high costs of shelled groundnut and transportation costs. It is therefore recommended that, the traders should have access to formal loans so as to improve productivity and efficiency.

Keywords:
gross margin efficiency groundnut extraction small-scale

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