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Citation Information

Type Journal Article - Scientific Papers Series-Management, Economic Engineering in Agriculture and Rural Development
Title Why the economics of groundnut processing in Akwanga Local Government Area, Nasarawa State, Nigeria.
Volume 16
Issue 4
Publication (Day/Month/Year) 2016
Page numbers 103-110
URL http://managementjournal.usamv.ro/pdf/vol.16_4/Art16.pdf
Despite Nigeria`s plentiful agricultural resources and oil wealth, poverty is widespread in the Country and has
increase since the late 1990`s, neglect of rural infrastructure affects the profitability of agricultural production. The
lack of roads impedes the marketing of agricultural communities prevents farmers from selling their produce at
reasonable price and leads to spoilage. The study was designed to analyze the economics of groundnut processing
in Akwanga Local Government Area of Nasarawa State, Nigeria. A purposive sampling technique was adopted in
collecting the data used for the study from a sample of 60 groundnut processors. Descriptive statistics and gross
margin analysis was used to analyzed the data collected. The study revealed that 98.3% of the respondents are
females who used groundnut seed, firewood, water, labour and grinding machine in processing groundnut. The
study estimated the average variable cost per 100 kg of groundnut seed per cycle at N27,487.12 while the average
total revenue was estimated at N36,340.00 thus, a gross margin of N8,852.88 per 100 kg of groundnut seed per
cycle. The return per naira invested (ROI) was estimated at N0.322. This indicates that groundnut processing is a
profitable business in the study area. The study further revealed that majority of the respondents were constrained
by inadequate capital, inadequate processing machine, risk of buying low quality raw materials, inadequate capital,
unstable prices of inputs and unsteady market for products. Based on the findings the study recommended that
groundnut processors should be encouraged to form cooperative societies so that they can speak with common voice
in their attempt to acquire input and sell their output, affordable and accessible credit facilities should be made
available to processors among others. Farmers should be persuaded to dry their groundnut seed properly before
barging them to prevent the seed from spoilage.

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