Profitability and operational efficiencies of cocoa marketing in Abia State, Nigeria

The study assessed the profitability potentials of cocoa marketing in Abia State, Nigeria. A multi-stage sampling was adopted to select 80 cocoa farmers. Data was collected using a structured questionnaire. Descriptive statistics, marketing efficiency model and net farm revenue were employed in the data analysis. It was found that 69% of the respondents were men, 44% of the farmers (majority) were between ages 35 and 44 years. It was found that cocoa marketing is profitable as shown by the positive profit received. The marketers incurred an average variable and fixed cost of N 27,026 and ₦9,500 respectively. The marketers earned average total revenue of ₦53,862 per month, which indicates that an average marketer earned ₦17,336 as net income per month and realized 32 kobo in every ₦1.00 invested. The margin of 15.71% shows that cocoa marketing is profitable. The efficiency value of 1.474 suggests that cocoa marketing is efficient in the study area. Age, quantity sold and marketing experience were positively related to profit at 5 percent, 10 percent and 1 percent significant levels respectively while an increase in household size, distance to market, transportation costs and storage cost will reduce the level of profit of cocoa marketing. Shortage of capital, cost of marketing and storage facilities were the major constraints militating against cocoa marketing. It was concluded that cocoa marketing is profitable. We recommend that storage facilities and access to loans be provided to cocoa marketers not only as agricultural loans but as part of small and medium scale enterprises (SMEs) development grant, to expand their capacities.