ANALYSIS OF PALM OIL VALUE CHAIN IN OSUN STATE, NIGERIA

Abstract

The study analyzed the palm oil value chain in Osun State, Nigeria. The specific objectives of the study were to identify the socio economic characteristics of the various actors in the palm oil value chain, investigate the activities of all the actors in the palm oil value chain in Osun State of Nigeria and the value added at each stage of the value chain, evaluate the costs and returns associated with palm oil along the value chain and, identify the constraints encountered by actors in the palm oil value chain. Multistage Sampling Procedure was adopted in the study. One hundred and twenty respondents were randomly selected in the three Local Government Area of the state and structured questionnaire was used for data collection. The data collected were analysed using descriptive analysis and gross-margin analysis. The study revealed that palm oil processing and marketing in the study area are female dominated occupation with 97.8% and 100% respectively. The mean age of the processors were 46years and the marketer’s mean age was also 46years. About 60% of the processors had primary education while about 53% of the marketers had secondary education. Majority of the processors (71.1%) were married as well as majority of the marketers (50%) too. The processors have sufficient experience in the palm oil processing business with mean years of experience being 24years while the marketers also with mean years of experience of 21years, this is due to the fact that both categories of the respondents have been involved in this activities from childhood by working with their mothers during this activities. The mean household size of the processors was 6 while the mean household size for marketers was 5, meaning that there could be availability of labour for palm oil business. About 78% of the processors finance the business with their personal savings and about 63% of the marketers also fund their business with their personal savings, this savings over a long period of time is used as capital for their marketing activities. The result of the gross margin analysis indicated that palm oil business is a viable and profitable business in the study area with a gross margin of N315, 500 per month and with a gross margin of N89, 200 for the marketers. The major constraints encountered in their processing activity is poor water supplies because processing depends mainly on availability of water and because of this, they go to a far stream to fetch water for processing and at times pay labour to fetch the water for the processing, while the marketers complained about high cost of transportation which was as a result of poor road, they also complained of irregular supply of palm oil because the processors use the local technique of processing and thereby they supply less to demand.