Economics of oil palm production: Evidence from Ondo State, Nigeria

Abstract

The study analysed the economics of oil palm production in Ondo State, Nigeria. Primary data were employed with the use of structured questionnaire to elicit information from oil palm producers in the study area. Multi-stage sampling procedure was employed to select 128 oil palm producers for this study. Data collected were analysed using descriptive and gross margin analysis. The result shows that majority of the oil palm producers were males, married, well experienced, and educated in the study area. The result shows majority of the farmers operate on a small scale due the farm size of 1.3 hectares. The results also revealed that average gross margin was estimated to be ₦46,730 per hectare. The return to naira invested was found to be 0.57kobo. This implies that for each 1naira invested in oil palm production business ₦1.57 was obtained. The major constraint associated with oil palm production was unfavourable climatic condition which affected the yield of oil palm producers in the study area. This study concludes that the production of oil palm in study area was a profitable venture, even though the producers ability to expand and reduce palm oil deficit is limited by several bottlenecks. The study recommends strengthening producers groups and improving extension services by Government and Non-governmental organization to support modern practices. Investment in climate based technologies by Government and private investors to improve poor weather conditions.