PROFITABILITY OF CASSAVA PRODUCTION IN ANAMBRA STATE OF NIGERIA

Cassava (Manihot spp.) is a very important and ubiquitous staple crop that plays a vital role in the food security of rural Nigeria. The youths in Anambra State are not willing to take cassava production as a means of livelihood because it is considered a non-profitable enterprise. This study estimated the gross margin of cassava farming in Anambra State as a second-best approach to determine the profit level of the enterprise. The specific objectives were to determine the expected input and output values of an average cassava farmer and apply Simulation technique to estimate the expected minimum, maximum and average gross margin of a typical cassava farmer in the state. Knowledge of the profitability of cassava production will assist the youths and prospective entrepreneurs in ranking cassava production properly among other candidate enterprises (for selection) for undertaking as a means of livelihood. The study used secondary cross-sectional data. The survey design was a multistage stratified sampling design. From the 21 LGAs of the state, 8 LGAs were selected for further sampling. The sample size of 543 was apportioned to the selected LGAs in proportionality to their sizes. In each of the selected LGA, systematic sampling was used to select the desired number of farmers from the sampling frame which was constructed by updating the listing of all VCDP beneficiary farmers in the LGA. The cassava producers in the sample were 244 farmers located in 7 LGAs. The data was collated and managed with Microsoft excel spread sheet and statistical analysis was carried out using the Statistical Package for the Social Sciences (SPSS). This study estimated the gross margin (GM) as total revenue (TR) minus total variable costs (TVC) that is GM = TR – TVC. Total revenue was calculated as the value of cassava sold plus the value of cassava consumed at home or given out as gifts. The variable costs in this study included values of: cassava cuttings, fertilizers applied, agrochemicals applied and aggregated labour. The cost of packaging and transportation were imputed because they were not captured in survey. The prices used were current market prices obtained during the survey. After 2000 iterations the resultant expected gross margin was estimated at N 1,976,559.78 only with an average of the expected gross margins at N1,715,734.49; Simulation of the gross margin enabled important decisions namely; despite the fluctuations in yield and prices, the expected gross margin showed that the variable cost was fully covered in the cropping enterprise; since the average expected gross margin was N1,715,734.49, it indicated that the cassava production enterprise was profitable in Anambra state; the estimation of the expected minimum and the maximum values of the gross margin enabled visual presentation of the distribution; and enabled comparison of any amount with the classes of the distribution of the expected gross margin. Cassava production in the State was constrained by: advanced age of the farmers; the limited number of extension visits; very exorbitant cost of fertilizers, agrochemicals and labor; and nonavailability of farming loans. The study recommended that government should formulate policies that will attract youths into cassava farming and increase extension to farmer ratio, to improve the number of extension visits to cassava farmers in Anambra State.