HOW BENEFICIAL IS GROUNDNUT INVESTMENT ALONG VALUE CHAIN ACTORS. A CASE STUDY OF NIGERIA

Abstract

Groundnut (Arachis hypogea L.) is a major crop grown in Nigeria’s arid and semi-arid zones. It is the leading oil crop produced and processed locally by most small-scale producers and artisanal processors in Nigeria. The research examined the return on investment (ROI) of groundnut value chain and sub-value chain actors in three agro-ecological zones of Nigeria. A multi-stage sampling procedure was employed to select 1302 producers, 316 processors, and 409   marketers. Primary data were obtained from the sampled groundnut value chain actors using structured questionnaire and interview schedule. The ROI shows that for every ₦1 invested, groundnut producers in Guinea Savannah earned ₦3.39 compared to the Sahel and Sudan producers with ROI of ₦3.16, and ₦2.47, respectively. The large-scale industrial processors realized a profit of ₦238,600 ($627.474) per tonne from the sale of groundnut oil and cake compared to the artisanal processors that earned ₦70,600 ($185.665) per tonne and ROI of 1.27 and 1.09, respectively. Seed marketer obtained ROI of 1.87 per tonne compared to the grain (1.37) and groundnut oil (1.29) marketers. The pooled results shows that the ROI of producers (4.001) has better and more beneficial investment opportunities compared to marketers (1.5) and processors (1.18). Hence, the study concluded that the major activities of production, processing, and marketing along the groundnut value chain were profitable ventures, and these have positive implications for investment opportunities. The study recommends that value chain actors should optimize their resource allocation to enhance their ROI which invariably impact on overall agricultural productivity and economic growth.