Profitability Analysis of Rice Processing and Marketing in Kano State, Nigeria

Abstract

The study determined the profitability of rice processing and marketing in Kano State. The objective of the study was to assess the profitability levels of rice processing and marketing, evaluate the value added to the commodity at each stage in the study area and determine the most efficient services produce. Primary data were collected from 120 randomly selected respondents comprising parboilers, millers, retailers and wholesalers using interview schedule. The findings indicated that Net Milling Income of millers was N3,378,855.08 per respondent per year; the value added was N5,736,658.82 and service efficiency was 243.3. This result, therefore, showed that the Net Milling Income, value added and service efficiency for millers were higher, followed by wholesalers (N2,239,086.63, N2,239,086.63 and 3.5 respectively) and retailers (N422,230.77, N422,230.77 and 5.65 respectively), with the parboilers having the least. The millers had a Net Present Value of N10, 555,709 at 22% and an Internal Rate of Return of 140 which shows that the business of milling can payback money loaned from bank at even 140% interest rate. Based on the findings, it was recommended that the parboilers should be paid for their services separately from costs of input for parboiling and the traders should enhance the existing co-operatives societies and encourage bulk purchase and transportation of the milled rice. This will reduce the high cost of milled rice as well as reduce the cost of transportation.

Keywords: Rice, Processing, Marketing, Profitability

Nigerian Journal of Basic and Applied Science (2011), 19(2): 293-298