ANALYSIS OF THE DETERMINANTS OF PROFIT FROM COCOA BEANS MARKETING IN OGUN STATE, NIGERIA

Abstract

This paper examined the factors that influenced profit from cocoa beans marketing in Ogun State,
Nigeria. Fifty (50) cocoa beans marketers were selected using a multi-stage sampling technique. Data
were collected with the aid of a structured questionnaire designed to solicit information on the socio-
economic characteristics of the cocoa beans marketers, their operating costs and return and problems
associated with cocoa beans marketing in the study area. Descriptive statistics, marketing margin
analysis, gross margin analysis and the Ordinary Least Square (OLS) regression technique were em-
ployed in the analysis of the study data. The study revealed that men (84%) are more involved in co-
coa beans marketing than women. Further, the study finds cocoa beans marketing to be a profitable
venture in the study area having a gross margin of ₦137,719.27 (US $ 885.51) per month and a mar-
keting margin of N40,600 (US $ 261.94). The percentage marketing margin was 34.73% which implies
that the cocoa beans marketers realize a margin of 34.76% of the farm price. The result of the OLS
regression analysis revealed that cost of transportation, communication cost, volume of cocoa traded
and membership of market union are the significant determinants of the profit margin that accrue to
the cocoa beans marketer. The identified constraints to cocoa beans marketing in the study area in-
clude low quality of cocoa beans, poor transportation facilities and inadequate capital. The study con-
cluded that cocoa beans marketing is economically rewarding in the study area. It recommends that
the government should help to provide good transportation facilities. Also, agricultural and commercial
banks as well as other micro credit financial institutions should assist in providing credit facility to the
marketers as this will enable them expand their scope of marketing and consequently improve their
profit margin.