Economic Efficiency of Oil Palm Fruit Processing in Enugu and Anambra States, Nigeria.

Abstract

This research investigated economic efficiency of oil palm processing in Enugu and Anambra States, Nigeria. A multi-stage sampling technique was used to select 152 low-technology and 312 high-technology oil palm fruits processors. Primary data were used based on a well-structured questionnaire. The data were analyzed using descriptive statistics, stochastic frontier model and Tobit Regression model. The results show that the years of experience, household size, years of education, age of processors, income of the processors, and access to credit facilities were the significant factors influencing the economic efficiency of low-technology and high-technology of oil palm fruit processors. The Pseudo R square value is 0.2441 and 0.0179 for low-technology and high-technology. This denotes that 24.4% and 1.8% of the variation in economic efficiency is explained by the stimulus included in the model respectively. The average economic efficiency value obtained by the oil palm processors using low-technology was 63.8% while that of processors using high-technology was 93.6%. This implies that, on average, an individual processor using low-technology to process oil palm was able to obtain an economic efficiency of about 63.8% leaving an inefficiency gap of 36.2% that need to be filled using the existing low-technology. The processors using high-technology were able to obtain 93.6% level of economic efficiency on average basis with an inefficiency gap of 6.4% that needed to be filled using the existing available high- technology to reach the maximum level of economic efficiency in the study area. The study recommended that processors should transition from manual mortar and pestle methods to mechanized digesters and hydraulic presses. Modern machines can recover up to 75% of available oil, compared to only 25% - 35% with low-technology methods

Keywords

• Tobit Regression Model
• Low-Technology
• High-Technology
• Southeast

Supporting Institution

NIL

Project Number

NIL

Ethical Statement

NIL

Thanks

Thanks

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