COMPARATIVE ANALYSIS OF RETURNS TO YAM PRODUCING AND YAM PROCESSING HOUSEHOLDS IN OYO STATE, NIGERIA

Abstract

The issue of which is more profitable out of on-farm production and processing of agricultural produce ranges on. This study made an attempt to provide an answer to this contentious question in yam producing and yam processing sectors by evaluating returns to the producing and processing households in Oyo State, Nigeria. The study described the socio-economic characteristics of yam producers and processors, compared cost of investments and income in both enterprises, identified the factors that affect the income of respondents in both enterprises, examined the perceptions of respondents’ about their economic activities as sources of income. A multi-stage sampling procedure was used to identify 75 yam farmers and 75 yam processors that provided the data analyzed in this study. In the first stage; three of the 33 LGAs; namely Ori-ire, Ogo-Oluwa and Surulere were purposively selected for this study. In the second stage; 5, 4 and 4 communities respectively were selected from each of the LGAs. In the third stage; snowball sampling technique was used to select the yam farmers and yam processor. Data from individually interviewed respondents were collected by means of a structured questionnaire also, direct field observation were recorded. The data were analysed using descriptive statistics, inferential statistics, budgetary technique, linear regression model and a 5-point likert scale. The result of data analysis showed that the mean age of yam producers was 52 years with about 63% within 41 and 60 years while the mean age of yam processors was 52years with 80% within 41 and 60 years. Majority (91%) of yam producers were male while about 95% were female. Majority (96%) of yam producers were married while about 89% of yam processors were married. The mean household size for both yam producers and yam processors were 7 persons. The mean farming experience of both yam producers and yam processors was 23 years. The mean annual income on yam production was N608,890.67k whereas the mean annual income on yam processing was N187,719.67k. The economic returns to yam production was N0.97k. For yam processing, the result showed that the returns per naira invested was N0.51k. Using t-test, the result showed that there was a significant difference in cost of production, total revenue and net profit of yam producers and yam processors. The linear regression results indicated that the main determinants of profit in yam production were household size, quantity produced and price of produce and were statistically significant at 1%. Experience, household size, quantity produced and unit price of produce significantly influenced the profit in yam processing at 5%, 5%, 1% and 1% levels respectively. The major constraints limiting yam production were financial problems (65.3%), high cost of production (56.0%), incidences of pests and diseases/perishability (54.7%), and high cost of hired labour (49.3%) while the constraints affecting yam processing were financial problems (82.7%), lack of government assistance (58.7%), incidences of pests and diseases/perishability (53.3%), poor weather condition (52.0%) and high cost of production (42.7%). Major Perceptions of yam farmers about yam production enterprise revealed that 77.3% disagreed that only few producers were engaged in yam production, 69.7% of the yam farmers agreed that yam production is time consuming, 77.4% said there was availability of hired labour. Yam Processors’ major perceptions about yam processing enterprise were; 64.0% of the respondents perceived that yam processing is not difficult to engage-in, 52.0% disagreed that yam processing is time consuming while 64.0% stated that only few processors were engaged in yam processing. The findings of this study indicated that yam production was more profitable than yam processing. The study recommended that government should see to the most important problems faced in both yam production and yam processing by assisting them with credit facilities to invest in yam production and yam processing for higher productivity and higher income. The yam farmers should ensure that their produce are being processed by their wives so that this would also be an additional source of income to their households. With respect to yam processing, business minded individuals and government should go into construction of processing facilities which yam processors can easily access for processing their produce at a reasonable price.