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ECONOMIC ANALYSIS OF GROUNDNUT PRODUCTION IN DAMBATTA LOCAL GOVERNMENT AREA OF KANO STATE
ABSTRACT
This study was designed to assess the resource use efficiency and the profitability of groundnut production in Danbatta Local Government Area of Kano State. The specific objectives were to; (i) determine socio-economic characteristics of the groundnut farmers in the study area (ii) determine the input-output levels and the resource use efficiency in groundnut production in the study area, (iii) determine the costs and returns in groundnut production in the area, (iv) identify the major constraints to increased groundnut production in the study area. To achieve the objectives, data were collected from 100 groundnut growers in the study area during the 1997 cropping season. The analytical framework chosen for the study were descriptive statistics, net farm income and the regression analysis. The results showed that the farmers were making profit of N0.84 (not costing family labour) and N0.47 (costing family labour) on every Naira invested by the farmers respectively. Multiple regression analysis results showed that the inputs identified in groundnut production were significant at 5% level of significance in explaining 73.23% of the variation in the output. However the marginal value productivities (MVPs) of the inputs derived from the cobb-Douglas production function were more than enough to offset their costs, implying that the farmers were v i i i underutilizing such inputs like fertilizer, and labour and hence, it was necessary for them to employ more of such inputs in their production process for better returns. Labour was identified to be the most costly input in groundnut production among the farmers accounting for 47.20% of the total cost of production. However, 53.37% of this was unpaid family labour which constituted non-direct expense to the farmers. Most farmers (81.0%) were constrained by acute scarcity and costliness of input such as fertilizer. The study recommended that government should monitor the pricing and quality of fertilizers to be supplied by the private enterpreneurs since the subsidy has been removed,. Extension activities should enlighten farmers on how to use available resources effecientiy. In the study area, government shou!d release some of the large expanse of land acquired for irrigation but left unused to the farmers at reasonable charges.
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