This study examines the efficiency and profitability of dairy products processing and marketing in Kwara state, Nigeria. The specific objective was to examine the efficiency of dairy product processing and marketing in terms of cost and return, marketing margin, market structure, marketing performance as well as to identify the problems of associated with the processing and marketing of dairy products in the study area. Primary data were collected from processor and marketers of dairy product in the study area with aid of structured questionnaires. This study was carried out in three local governmentsin Kwara state were dairy processing and marketing activities is very common. A multi-stage sampling technique was used in selecting respondent in the study area.Sample frame of 180 was used as sample size. In all, 90 respondents comprising of 20 yoghurt and 70 cheese processor were selected using purposive and random method. Descriptive statistics, gross margin analysis and marketing structure and performancewere used in analyzing the data. The study reveals that majority of the marketers and processors in the study area are within the age of 21- 50 implying that they are withintheir productive age. The average household is also 5 in the study area. The result shows that the dairy activities in the study area are also profitable with an average return of 1.13 for yoghurt production and 1.8 for cheese production. The market efficiency for the dairy products is 50 percent and 33 percent for yoghurt and cheese respectively. It was also found that power supply and basic infrastructure is the major problem facing the processors. It was therefore recommended that loan should be provided andimproves power supply and basic infrastructure should be provided in the study area…..
1.1 Background to the Study
The agricultural sector in Nigeria is the most important non-oil sector of the economy,it is one of the largest employer of labour forces (National Bureau of Statistics, 2010). It plays a significant role in the Nigerian economy with 4.14 percent contribution to the GDP. The benefit it offers to the economy include production of food for consumption, raw material for the industries, foreign exchange earnings and also serves as the major revenue generation for the country before the oil boom (Olajideet al., 2007). After the oil boom the sector has suffered neglect due to government inconsistent policies over the years (Akinlabiet al, 2008). This led to change in emphasis from agriculture and low return in terms of efficiency and performance. According to Food and Agriculture Organization (2012) dichotomy has emanated in the agricultural production sector in the sense that while crop production is characterized by falling prices due to large supplies and stock replenishment in the recent years, cost of livestock production is increasing over the time due to high feed costs and reduced global livestock inventories and production (Food and Agricultural Organization, 2012). Also there seems to be more focus on livestock production due to increase in market demand driven by population growth in developing countries.
Research findings on processing and marketing of dairy product has shown that economic efficiency and success of a dairy product largely depend on effective management of operations like milk procurement, processing and marketing of dairy products as well as efficient marketing system (Dhaka et al. ,2007).
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