ASSESSING RESOURCE USE EFFICIENCY AND INVESTMENT IN COCOA ENTERPRISE: A CASE OF OSUN STATE, NIGERIA

Abstract

This study determined resource use efficiency and investment in cocoa production in Osun state, Nigeria. Specifically, described the socioeconomic characteristics of cocoa farmers; determined the factors affecting cocoa production; determined the resource use efficiency in cocoa production; and estimated profitability of investment in cocoa production in the study area. The study was conducted in Osun state, south-western Nigeria. A multi-stage sampling procedure was used for selecting respondents for this study. A total number of 120 households were selected for the study. Data were analyzed using Descriptive statistics, Multiple Regression, Marginal value and budgetary analysis. The results for the entire respondents showed average values of 52 years for age, 26years for year of experience, 9 for household size, and 3.85 for farm size. Returns to scale (RTS) was 1.599. Years spent in formal education (p<0.05), farm size (p<0.05), volume of insecticide used (p<0.01), labour (p<0.01) positively and significantly influenced output of cocoa farmers. Resource use efficiency shows that family labour is 1.333, insecticide (2.575), fungicide (2.667), land (0.267), and hired labour (0.745). The estimated costs and return of cocoa farmers per hectare of land on the average in the study area were N 115,481.70 and N 156,518.30 per annum whereas the total revenue on the average was N272000, while the gross margin and net income were N166729.30 and N156518.30, respectively. The benefit cost ratio and labour efficiency ratio were 2.36 and 3.18, respectively. Following the findings of the study, the government and non-governmental agencies should ensure that farm inputs are made available to the cocoa farmers at the right time, quantity, quality and also at subsidized prices.