Analysis of Profitability and Market Outlets of Smallholder Garri Producers in Ondo State, Nigeria

Abstract

Aims: To ascertain the socio-economic characteristics of the respondents, identify the market outlets available in the area, estimate the profitability of garri processors, determine factors influencing the choice of market outlet employed by the processors, and identify the main constraints faced in processing garri in the area. Study Design: Primary data were used for this study and sourced through a well-structured questionnaire. Place and Duration of Study: The study was carried out among garri producers in Ondo State, Nigeria, between June and November, 2020. Methodology: A multistage sampling procedure was used to select 120 respondents, while descriptive statistics, budgetary technique, and multinomial logit (MNL) regression were used for the data analysis. Results: The results revealed that female (63.3%) dominated the enterprise, and about 81.6% of them were married. The average age was 49 years old, and many (80%) of them were literate. The result established three main market outlets and they are: producer gate (43.3%), open market (20.0%), and middlemen (36.7%). The result of budgetary technique revealed that the venture is profitable given the values of gross margin and profit as 82,972.58 and 71,694.68, respectively. The value (2.37) of return on investment, indicating that about 2.37 was realized for every naira spent. The result of MNL affirmed that marital status, education, experience and profit accrued were the significant factors influencing the choice of market outlet in the area. It was unveiled that price fluctuations, poor road network and high cost of transportation were the main constraints faced by the garri processors in the area. Conclusion: The policy implication is that garri production business is viable, therefore it is capable to reduce hunger and poverty if properly managed with functioning and organized market outlets and structure.