Efficiency Measurement of Modern Groundnut Oil Processing of RMP-12 and Ex-dakar Varieties in Gombe Metropolis Gombe State, Nigeria

Saleh A.^1, , Ochi J. E.² and Sani M. H.²

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

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

Cite this paper:
Saleh A., Ochi J. E. and Sani M. H.. Efficiency Measurement of Modern Groundnut Oil Processing of RMP-12 and Ex-dakar Varieties in Gombe Metropolis Gombe State, Nigeria. Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport. 2016; 4(3):71-80. doi: 10.12691/jbe-4-3-4

Abstract

The study examined the marketing efficiency of modern groundnut oil processing of RMP-12 and Ex-dakar varieties in Gombe Metropolis. The focus was on the profitability of the business, market structures and efficiencies of the products. The study area was delineated into six market districts where two markets each, were selected for their popularity in groundnut oil processing. A multi-stage sampling technique was used to select 90 groundnut oil processors. Data were collected using structured questionnaires and were analysed using, farm budget, sherphered-futrel, gini-coefficient and t-test models. The results revealed that, cost of shelled groundnut constituted the major (92.3% and 91.6%) components of processing costs for RMP-12 and Ex-dakar respectively. The gross ratios, fixed ratios and operating ratios of the two groundnut varieties were < 1, meaning that the business was profitable. Also, the returns per naira invested of the respective groundnut varieties was 0.17 and 0.25, significant (P<0.01). The marketing coefficients for Ex-dakar products (69.97%) of Jekadafari markets revealed to be most efficient. The results also revealed the Gini-coefficients for RMP-12 and Ex-dakar oil and cake marketing was 0.835 and 0.839 respectively, indicating great variation in the revenue generated with high level of market concentration. Major impediments of modern groundut oil processing were security challenges, costs of inputs, inadequate capital, and erratic power supply. The study concluded that the business was profitable, that Ex-dakar variety gave higher net income of 7,428.80 than RMP-12 variety per tonne per week. The study recommends that security situation in the groundnut producing areas should be restored, electricity should be provided adequately, the traders should also have access to formal credits so as to improve productivity and efficiency.

Keywords:
market efficiency profitability groundnut processing

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