ABSTRACT:

This study assessed the profitability and sensitivity dynamics of rice production in Nasarawa State, Nigeria. Rice, being a staple food crop and a critical component of food security in Nigeria, has witnessed significant growth in demand driven by population growth and urbanization. Nasarawa State faces challenges related to production costs, market volatility, and socio-economic constraints, despite being one of the leading rice-producing states in Nigeria. This research employs a quantitative approach to evaluate profitability using Net Farm Income (NFI), Return on Investment (ROI), and Benefit-Cost Ratio (BCR), while sensitivity analysis was conducted to examine the responsiveness of profitability to variations in input and output prices. Data were collected from 240 rice farmers across selected Local Government Areas through structured questionnaires and analyzed using descriptive statistics, profitability analysis, and sensitivity analysis. The results revealed that rice production in Nasarawa State is profitable, with a net farm income of ₦533,000 per hectare, an ROI of 69.5%, and a BCR of 1.7. However, profitability declines significantly with rising production costs and falling revenue, highlighting vulnerability to economic fluctuations. The sensitivity analysis shows that a 20% increase in production cost or a 20% fall in revenue is the maximum threshold for maintaining profitability. Major constraints identified include inadequate capital, lack of processing and storage facilities, herders’ invasion, and high transportation costs. The study recommends enhancing financial support, improving processing infrastructure, and addressing security challenges to sustain profitability and resilience among rice farmers.