Economics of Palm Oil Production Under Semi-Mechanized Processing Method in Afijo Local Government Area of Oyo State, Nigeria

  • A. E. Obayelu
  • O. O. Ayodeji
  • O. P. Adeoye
Keywords: Economics, oil palm, processing, gross margin


The study analysed palm oil production under semi-mechanized processing method in Afijo Local Government Area of Oyo State. A multistage sampling procedure was used to randomly select 80 palm oil processors. Data was collected with the aid of structured questionnaire. Descriptive statistics, budgetary analysis and ordinary least square regression model were used for the data analysis. The results showed that majority of the palm oil processors were female. Their mean age was 44 years. The majority of the respondents had one form of formal education or the other. 36.3% of the oil processors had between 10-20 years' experience in oil palm processing. Total cost, revenue, and profit per annum were N1,243,357, N1,673,820 and N430,463.4 respectively with Farm Gross Ratio of 0.30 and Return On Investment of 1.35. The study showed that education had 5% significant effect on the net returns of the processors in the study area. Major constraints were high cost of modern processing facilities and difficulty at getting modern equipment by processors, poor access to good road, poor incentives to processors, insufficient fund for buying of processing machine, low capital, price fluctuations, inexperienced manpower, high cost of hired labor and lack of storage facilities. It was recommended that government should provide social amenities such as such as electricity, pipe borne water, good road network, storage facilities and access to credit facilities and subsidize equipment needed by the processors in order to reduce both running and overhead costs in areas where palm fruits are processed to palm oil production by the processors.


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print ISSN: 0300-368X