Analysis of economic viability of gum arabic (Senegalia senegal) plantations involved in desertification control and revenue generation projects in Yobe State, Nigeria

Abstract

This study analysed the economic viability of gum Arabic (Senegalia senegal) plantations for desertification control and revenue generation projects in Yobe state, Nigeria. Specifically, it assessed the socioeconomic characteristics of gum Arabic marketers, economic viabilities of gum Arabic plantations, the profitability of gum Arabic marketing as well as establishment and management costs of gum its plantations in the state. Three plantation areas of Afunori, Nangere and Damaturu, established in 1999, were purposively selected for this study. A total of 125 gum Arabic marketers were randomly selected based on Yero Yemeni`s sample size model. Two structured questionnaires were developed. One was exclusively directed to the marketing respondents, while the other was restricted to the plantation managers. The variables on which data were collected included marketing costs and revenues as well as establishment and management costs. Data were also collected on socioeconomic variables of respondents. Results showed that gum Arabic plantations in the state were economically viable with BC-R values greater than 1 and with positive NPV and LEV values. Similarly, Gross Margin and profitability analyses for gum Arabic marketing showed significant profit margin with up to N2, 403.09 net profit per ton per marketer generated from 685.41tons of gum Arabic marketed within 5 years. However, establishment cost per hectare of N337, 515.63 was comparatively greater than the management costs of N57, 583.33per hectare. Conversion of gum Arabic substation of Rubber Research Institute of Nigeria at Jawa into a full fledge gum Arabic Research Institute was the major policy recommendation made.