ASSESSMENT OF ECONOMIC VIABILITY OF NEEM PLANTATIONS INVOLVED IN DESERTIFICATION CONTROL AND REVENUE GENERATION PROJECTS IN YOBE STATE, NIGERIA

Y K Muhammad, A U Jibo, K J Ilu, K D Salami, B Ahmed

Abstract


This paper analyzed the economic viability of neem (Azadirachta indica) plantations involved in desertification control and revenue generation projects in Yobe State, Nigeria. It specifically assessed the socioeconomic characteristics of neem seed marketers, economic viabilities of neem plantations, the profitability of neem seed marketing as well as establishment and management costs of neem plantations in the state. Three neem plantation areas of Afunori, Nangere and Damaturu, established in 1999, were purposively selected for this study. A total of 125 neem seed marketers were randomly selected based on Yero Yemenis model of sample size determination. Two structured questionnaires were developed. One was exclusively directed to the marketing respondents, while the other was restricted to the plantation managers. The variables on which data was collected included marketing costs and revenues as well as establishment and management costs. Data was also collected on socioeconomic variables of respondents. Results have shown that neem plantations in the state were not economically viable with BC-R values less than 1 and with negative NPV and LEV values. Similarly, Gross Margin and profitability analyses for neem seed marketing have shown insignificant profit margin as only N970.84 net profit per tone per marketer was generated from 673.13 tones of neem seed marketed in 5 years. However, establishment (N127, 686.68) and management (N56, 166.67) costsper hectare werecomparatively lower. Based on financial and economic results, the study concluded that neem plantations were not economically viable in Yobe State. Creation of awareness about economic potentialities of neem, formation of market and neem associations were some of the major policy recommendations made.

This paper analyzed the economic viability of neem (Azadirachta indica) plantations involved in desertification control and revenue generation projects in Yobe State, Nigeria. It specifically assessed the socioeconomic characteristics of neem seed marketers, economic viabilities of neem plantations, the profitability of neem seed marketing as well as establishment and management costs of neem plantations in the state. Three neem plantation areas of Afunori, Nangere and Damaturu, established in 1999, were purposively selected for this study. A total of 125 neem seed marketers were randomly selected based on Yero Yemenis model of sample size determination. Two structured questionnaires were developed. One was exclusively directed to the marketing respondents, while the other was restricted to the plantation managers. The variables on which data was collected included marketing costs and revenues as well as establishment and management costs. Data was also collected on socioeconomic variables of respondents. Results have shown that neem plantations in the state were not economically viable with BC-R values less than 1 and with negative NPV and LEV values. Similarly, Gross Margin and profitability analyses for neem seed marketing have shown insignificant profit margin as only N970.84 net profit per tone per marketer was generated from 673.13 tones of neem seed marketed in 5 years. However, establishment (N127, 686.68) and management (N56, 166.67) costsper hectare werecomparatively lower. Based on financial and economic results, the study concluded that neem plantations were not economically viable in Yobe State. Creation of awareness about economic potentialities of neem, formation of market and neem associations were some of the major policy recommendations made.


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References


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