Profitabilty efficiency of cattle value chain actors in Niger State, Nigeria.

Abstract

This study analyses the profitability efficiency among cattle value chain actors in Niger State, Nigeria. Data collected were analyzed using both descriptive and inferential statistics. A sample of 193 actors in the chain was selected using simple random sampling technique to obtain primary data. Results show that all of the actors were male and within the active age of 20 and above. About 47% of them had no formal education; while 53% have one form of education or the other. The four most important intermediaries of cattle marketers in Niger State were producers, dealers, retailers and brokers. Transportation cost accounted for 74.3%, 60%, 46.2% and 12.1% of Total Variable Cost incurred by producers, dealers, retailers and brokers respectively. Cattle marketing was profitable in the study area with gross margin per head of cattle of N24, 916.58, N18.765.40, N8,554.60 and N3,313.15 for producers, dealers, retailers and brokers respectively. On the other hand, profitability ratios were 0.50, 0.19, 0.07 and 0.04, respectively. The frequency of cattle value chain actors’ specific profit efficiency estimates shows that majority (53.37%) had profit efficiency range of 0.10‐0.20 and (46.64%) had profit efficiency of 21% and above. The most efficient for this study had a profit efficiency of 0.86 which indicates that 24% of the gross margin is forgone due to inefficiency from the study area. Cattle value chain actors however, operated below economic frontier, giving a low mean profit efficiency and suggestive of a scope for improvement by allocating resources efficiently, and addressing the structural and marketing constraints. Inadequate finance, inadequate market information and double charges were the major problems militating against cattle marketing. Based on these findings, strengthening marketing institutions through capacity building for actors, rail system resuscitation and fixing of bad roads are recommended as steps necessary to enhance the commercialization and performance of cattle marketing.