ASSESSMENT OF ECONOMIC VIABILITY OF RICE PROCESSING AND MARKETING IN MAYO BELWA LOCAL GOVERNMENT AREA OF ADAMAWA STATE-NIGERIA

ABSTRACT

The study examined the economic viability of local paddy rice processing and marketing in Mayo-Belwa Local Government Area of Adamawa State, Nigeria. Data used for the analysis were obtained from 120 respondents through a multistage sampling procedure. Tools used for the analysis were descriptive statistics (tables, means, frequencies and percentages), budgetary technique and multiple regression analysis. The result of the study revealed that more than half (51.67%) of the respondents were females while 48.33% were males. About 51.67% of the respondents were married, their literacy level was as high as 97%which had attended one form of formal education or the other, moreso, majority (60.84%) of them belong to at least one cooperative society. Further, 60.84% were between 25 – 45years of age which is considered active and capable of doing rigorous work involved in rice processing and marketing. The result of the gross margin analysis showed ₦3190.08 and ₦3016.34 per bag of paddy per month as gross margin and net profit respectively, which indicate that the transaction was profitable venture. Other economic indices such as return on naira invested revealed a gain of 30k for every naira invested in the business. From results of the regression Cobb-Douglas was chosen as the led function following economic, econometrics and statistics criteria. The R² which gave 0.97 which indicate that 97% of the margin obtained from local rice processing and marketing was being explained by the independent variables captured in the analysis. All the variable factors were significant at varying levels and were important in determining margin obtain from the transaction. The challenges faced by respondents include poor price which was attributed to combination of factors such as presence of small stones, broken kernels as a result of lack of certified seed and traditional method of processing. Others are inadequate credit facilities, high cost of transport as a result of poor feeder roads that has made it difficult for the marketers

to convey the commodity freely. The study recommended marketers to use modern milling machines that are capable of de-stoning their local rice to attract better price, also Non-Governmental Organizations (NGOs) and the government should endeavor to educate the farmers on where  source for certified seeds to overcome challenges of mixed seed varieties that breaks during processing leading to poor quality of processed local rice.

Keywords: Low Demand, Paddy Rice, Processing, De-Stoning, Profitable Margin