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GROUNDNUT OIL PRODUCTION AND MARKETING IN KADUNA STATE, NIGERIA.

ABSTRACT

This study examined groundnut oil production and marketing in Kaduna State,

Nigeria. The specific objectives were to: examine the socio economic factors that

influenced the production of groundnut oil; examine the socioeconomic factors

that influenced marketing of groundnut oil; describe gender roles in the

production and marketing of groundnut oil in the study area; describe the

marketing channels employed in the distribution of groundnut oil; analyse

margins of groundnut oil production and marketing; and identify constraints

militating against the production and marketing of groundnut oil. Multi-stage

random sampling technique was used to stratify the state into northern (mostly

Moslems) and southern (mostly Christians) areas. A total of 100 respondents (50

producers and 50 marketers) were randomly selected. Data were collected from

producers and marketers based on the list from the extension agents using two

sets of structured and pre-tested questionnaires. Multiple regression model,

descriptive statistics and marketing margin analysis were used to achieve the

objectives. Socioeconomic factor such as sex, education, occupation, and years

of experience were significant at 1% level for production with an R- square of

about 70%, while for marketing, age and education were highly significant at 1%

level with an R-square of about 90%. Production of groundnut oil was dominated

by females, while both sexes had almost equal percentage in the marketing of

the product. More retailers (76%) bought groundnut oil directly from the

producers at more frequent intervals because they had low capital base. But the

wholesalers (24%) bought less frequently at larger quantities because of larger

capital.

The producer’s margin was 36%, with a Net Income of N43, 925.04 per

annum. The wholesaler’s margin was 28% with a Net Income of N 615, 960.00

per annum, while the retailer’s margin was 36% with a Net Income of N

201,636.00 per annum. The total marketing margin was 100. The constraints of

notable importance that affected production were lack of capital (92%), high

cost of groundnut (82%), poor variety (50%), and crude processing method

(70%). For marketing, high cost of groundnut oil (92%), high interest rate on

borrowed money (80%) and fluctuation in price of groundnut oil (70%) and

competition from other vegetable oils (50%). The production and marketing of

groundnut oil if given a favourable environment by reducing the problems facing

the industry to its barest minimum would thrive better. So, by way of

recommendation, research institutes should be encouraged through adequate

funding to produce high oil yielding varieties of groundnut. Loans should be

made accessible and at reasonable and affordable interest rate to producers and

marketers.

The indigenous manufacturers should fabricate groundnut oil

extractors and groundnut oil producers encouraged to use them so that larger

quantities of oil would be produced to meet market demand at a relatively lower

price. Proper market information should be disseminated so that all the market

players would be in the picture and finally policies should be put in place to

discourage unlawful importation of the vegetable oils into the country to avoid

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