Profitability of cocoa production enterprises in Ile-Oluji/Oke-Igbo and Idanre Local Government Areas of Ondo State, Nigeria

Abstract

The study examined the profitability of cocoa production enterprises in Ile-Oluji/Oke-Igbo and Idanre Local Government Areas of Ondo State using a two-stage sampling procedure. Data used for this study were collected using well structured questionnaire, which were administered to 100 Cocoa farmers through personal interview. The data were analysed using descriptive statistics, budgetary and regression analysis. Results showed that the annual gross margin, net profit and return/naira invested were ₦428,715.22, ₦417,070.29 and ₦3.75 per hectare respectively. Results of the multiple regression analysis indicated that production cost (Labour, Chemical, Fertilizer and Transportation costs) was shown to have explained about 69% of the systematic variation in the Gross Margin of cocoa producers in parts of Ondo State. The serious factors that affected cocoa productions in the study area were inadequate finance, incidence of pests and diseases, climatic problems, poor access to input and transportation problem. The study concluded that there should be improvement in the production processes of cocoa through the provision of adequate credit facilities and good road networks for farmers in the study area, so as to ensure the sustainability of the enterprise in the area.