ECONOMIC ANALYSIS OF PADDY RICE PROCESSING IN WUKARI LOCAL GOVERNMENT AREA, TARABA STATE, NIGERIA

Abstract

The study assessed the economics of paddy rice processing in Wukari Local Government Area, Taraba State, Nigeria. The ban on the importation of some major staples left Nigerians with no option than to consider local rice as a necessary alternative, requiring it in processed form.  A multi staged sampling procedure was adopted in arriving at the 80 respondents used for the study.  Data were collected through the use of structured questionnaire. Data were analyzed using Gross Margin Analysis, multiple regression and Likert scale. Results showed that rice was a profitable business with an average revenue of N695, 082.48 per month of processing using an average input cost of N569, 846.23 and earning an average gross margin of N125, 236.58. Return per naira invested gave a ratio of 0.22, implying that for every naira invested 22k kobo was returned. Four socioeconomic factors were found to influence rice processing in the study area.  These were household size (54.462) at P≤0.1, age (12.621) at P≤0.5 and level of education and processing experience at P≤0.01. The regression results for the determinants of rice processing, on the other hand, revealed that volume of paddy rice processed, drums, firewood, water and fuel were all significant at P≤0.01. Unpredictable weather (particularly during rainy season), pests and poor marketing ranked first, second and third, respectively as challenges to rice processing in the study area. It was therefore concluded that rice processing was a profitable business. It is recommended that processes be supported financially to improve upon the volume of their activity.