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Profit Efficiency of the Rice Milling Industry and Sustainability of the Rice Value Chain in Nigeria

Author

Listed:
  • Fatai Abiola Sowunmi

    (University of Ibadan)

  • Oluwasogo Dammy Abegunrin

    (National Centre for Genetic Resources and Biotechnology)

Abstract

Consistent profit making is a factor that sustains investment and encourages growth in business. This study was prompted by the need to examine the performance of the rice milling industry in Southwest Nigeria based on profit efficiency and reveals that the annual cost of labour and energy incurred by rice mills is high. The percentage of installed capacity utilized was 56.9% in the study area and the average profit efficiency was low (39.0%), with no significant variation among states (p>0.05). The state of Ekiti showed the highest (49.2%) profit efficiency, while Oyo had the lowest (15.5%). The age and milling experience of the manager/owner and the per day milling capacity of their machines were found to influence the profit efficiency of rice mills in the study area. Boosting rice production in order to enhance the capacity utilization of the rice milling industry and the adoption of strategies to reduce labour costs are recommended to ensure the sustainability of the rice milling industry in Nigeria.

Suggested Citation

  • Fatai Abiola Sowunmi & Oluwasogo Dammy Abegunrin, 2021. "Profit Efficiency of the Rice Milling Industry and Sustainability of the Rice Value Chain in Nigeria," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 129(3), pages 319-338.
    • Handle: RePEc:vep:journl:y:2021:v:129:i:3:p:319-338
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    More about this item

    Keywords

    Rice value chain; Rice mill; Stochastic frontier approach; Profit efficiency;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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