Economic Analysis of Tea Production in Taraba State, Nigeria

Abstract

The study aims to investigate the yield, costs, and returns of tea production to assess its profitability trends over time. Profit making is one of the key objectives of any market-oriented farm business entity and Tea is one of such cash crops in Nigeria. The study was carried out between the years 2002 and 2012 in Taraba State, Nigeria. Three hundred and sixty (360) farmers were randomly selected from the study area. Primary data were collected from the sampled respondents with the use of structured questionnaires. The data collected were analysed using descriptive Statistics and Budgetary Analysis. The results from the analysis showed that in the year 2002, production costs increased at a decreasing rate relative to yield and they were at equilibrium in the year 2006. From the year 2006 onward, there was a fall in both cost and yield at a decreasing rate to the year 2008 when yield increased at an increasing rate to the year 2009 while cost remained constant during these periods. From year 2009, there was a sharp decrease in yield relative to cost. The ratio of net income to the total cost (NI: TC) was highest in 2009 (46.25%) and the lowest in 2003 (20.57%). The proportion of the NI: TC on one hectare in 2009, therefore, was 46.25%. Hence, 46.25% of the total cost expended on tea production was generated as profit. Tea production is profitable in Taraba but the profitability varies over the years examined.