ABSTRACT:

This study examined the profitability analysis of oil palm processing techniques among palm oil processors in Edo State Nigeria. Multistage sampling technique was used to select 240 respondents from 15 villages across five major palm oil-producing Local Government Areas: Ikpoba-Okha, Ovia North-East, Ovia South-West, Orhionmwon, and Uhunmwonde. Data were collected using structured questionnaire, and analyzed using descriptive statistics, budgetary techniques and ordinary least square. Results showed that 76.67% of respondents were male, with an average age of 47.17 ± 6.10 years and a mean household size of 7.20 ± 2.42. About 81.25% had formal education, 52.92% were association members, 40.83% had access to credit, and only 19.17% had contact with extension agents. In all, 12.08%,71.67% and 16.25% adopted traditional, semimechanized and mechanized processing techniques respectively. The result of the study further revealed that the net returns value of ₦140,206.30, ₦1,378,782.25 and ₦3,968,757.35 per processor per annum and a Benefit Cost Ratio of 1.52, 1.66 and 2.02 per processor per annum for manual, semi-mechanized and mechanized processors. The result of the regression estimates showed that the net profit of processors in the study area was affected by factors such as processing techniques, cost of FFB, transportation cost, labour cost, diesel cost, milling charges and depreciation on milling equipment. The study concluded that oil palm processing is a profitable venture in the study area irrespective of the processing technique adopted, however, with the mechanized processors being most profitable. The study recommended that the government, NGOs and other stakeholders in palm oil production should initiate a policy that will facilitate the transition of palm oil processors from the use of semi-mechanized to mechanized processing techniques.