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

Fatai Abiola Sowunmi () and Oluwasogo Dammy Abegunrin ()
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Fatai Abiola Sowunmi: University of Ibadan
Oluwasogo Dammy Abegunrin: National Centre for Genetic Resources and Biotechnology

Rivista Internazionale di Scienze Sociali, 2021, vol. 129, issue 3, 319-338

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.

Keywords: Rice value chain; Rice mill; Stochastic frontier approach; Profit efficiency (search for similar items in EconPapers)
JEL-codes: C01 C14 M21 O12 Q12 (search for similar items in EconPapers)
Date: 2021
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