Economics of palm oil production in Nsukka Local Government Area, Enugu State, Nigeria

Abstract

With the increasing technological advancement and adoption in palm production, this study examined the economic viability of palm oil  production in Nsukka Local Government Area (LGA) of Enugu state. Specifically, the study determined the socioeconomic characteristics of palm oil producers, different production techniques adopted, costs and return and the constraints that mitigate palm oil production of the farmers. Primary data were collected with the aid of a well-structured questionnaire from 50 palm oil producers selected randomly from the population. Data were analyzed using descriptive statistics, and gross margin model. In addition to the use of traditional production techniques, producers were identified to be using machine for their production (modern technique) and a combination of both. The gross margin analysis showed that the enterprise is viable and profitable. The study identified inaccessibility of palm fruits, high cost of harvesting, unavailability of human labour, and long duration of processing as the major constraints to palm oil production. The study recommended among others that producers need to form groups in other to be able to purchase modern machines as this will help in their production and also improve the rural infrastructures as it will help to reduce the transportation and the high cost of production challenges faced by farmers especially palm oil farmers/producers in Nsukka LGA of Enugu State.