International Journal of Research and Innovation in Applied Science (IJRIAS) |Volume VII, Issue X, October 2022|ISSN 2454-6194

Effects of Risk on Cocoa Farmers’ Profitability in Ondo State, Nigeria

Adenike Abisola Ogunkunle¹*, Luke Oyesola Olarinde¹, Adebusola Adenike Adepoju1and Matthew Olufemi Adio^2
1Department of Agricultural Economics, Faculty of Agriculture, Ladoke Akintola University, Ogbomoso, Oyo State, Nigeria
²Department of Agricultural Economics and Extension, Faculty of Agriculture, Federal University, Oye-Ekiti, Ekiti State, Nigeria
*Corresponding author

Abstract: This study analysed cocoa farmers’ attitude to risk and effects on their income in Ondo State, Nigeria. Multistage sampling technique was used to select a representative sample (234) for this study. Attitudinal Scale Approach (ASA) model, Gross margin and Likert’s scale were used to analysed the data collected. Results showed that the mean age of the respondents was 50.27 years with an average of 15.98 years of experience. The sources of risks perceived by the cocoa farming households as threats to cocoa production were Natural risks (63.68%), social risks (88.89%), economic risks (75.21%), production risk (52.14%) and marketing risks (76.92%). The result of ASA model using Likert’s scale showed that 37.61%, 36.75% and 25.64% of the respondents were respectively categorized as risk averse, neutral and preferring individuals. Results of costs and returns analysis of cocoa farms in the study area indicated that the average farm’s profitability level wasN185,423,725. Regression result showed that the variables that determine farmer’s income included social risks (p<0.001), economic risks (p<0.001) and production risks (p<0.001) and marketing risks (p<0.001). The study concluded that plant diseases, theft of the crop, low market demand, low labour supply and Instability of price among others are the severe types of risks that affect cocoa productivity and all year source of risk to cocoa production in the study area.

Keywords: Cocoa Farmers, Profitability, Gross Margin, Risks and Regression Analysis.

I. INTRODUCTION

Cocoa production in Nigeria is retarded by the declining productivity of the existing old cocoa trees. These old trees, coupled with their susceptibility to pest attack are responsible for the decline in the quality and quantity of cocoa production in the country. Cocoa production in Nigeria is undertaken mostly by poor, small holder and low technical capability farmers [3]. Cocoa is highly sensitive to changes in climate from hours of sunshine to rainfall and application of water, soil condition and particularly to temperature due to effects on evapo-transpiration. Climate changes could also alter stages of rates of development of cocoa pests and pathogens. It can modify host resistance and results in changes in physiology of host-pathogen or pest interaction. These factors alters cocoa yields, and thus results in low productivity (very low or decline from cocoa farming) and results into crop loses which, will impact socio-economic variables such as farm income (for example, cocoa farmers mostly suffer from risk (though, mostly income risk)), farm-level decision making, marketability and farmers’ livelihoods.

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