Cost-benefit Analysis of Cocoa Production in Idanre Local Government Area of Ondo State, Nigeria

Abstract

This study was carried out to investigate the cost-benefit of cocoa production in Idanre Local Government Area of Ondo State. Primary data were used for this study and a well-structured questionnaire and personal interview were used for the collection of the data. The production data covered a period of 3years (2018-2020). The data were analyzed using descriptive statistics, budgetary technique and multiple regression analysis. The study showed that the majority (64.2%) of the farmers were within the active age group, with an average age of 55years old. About 72.5% of the cocoa farmers were male and 27.5% were female. The majority (68.3%) of the farmers were married and nearly (65.0%) had a household size of 4 – 6 members. The sampled cocoa farmers had an average farming experience of 17 years, while about 75% of the farmers had formal education and 25% had no formal education. The study revealed that the total costs were estimated to be N165,001.85, N120,822.62 and N108,243.55 for the period of 2018, 2019 and 2020, respectively. The study recorded a Net Farm Income of N360,437.17, N499,228.80 and N591,993.82 across the years. The result of the cost-benefit analysis showed that at an interest rate of 20%, cocoa production was profitable. Also, a benefit-cost ratio of 4.48 was obtained indicating that for every N1 invested in cocoa production, a profit of N3.48 kobo was made as a profit which implies that cocoa production was profitable in the study area. The result revealed that inadequate credit facilities are the major constraint in the study area followed by inadequate modern equipment. This implies that the majority of the cocoa farmers are still practising the traditional farming method. Therefore, it is recommended that extension workers should be visiting the farmers in the study area regularly to enlighten them on modern techniques to adopt to boost cocoa production in the study area.