ISSN 2360-7971
Abstract
This study evaluated the cost efficiency and returns on investment across sugarcane value chain actors in Kebbi State, Nigeria. A total of 400 respondents were selected through a multistage sampling procedure comprising 80 stem cutting suppliers, 120 producers, 60 processors, 70 wholesalers, and 70 retailers. Data were collected using structured questionnaires and analysed using descriptive statistics and cost–return analysis. The results revealed that all value chain actors were profitable, though with varying cost efficiencies. For stem cutting suppliers, the total cost of production per week was ₦1,624,000, and the total revenue was ₦2,500,000, yielding a gross margin of ₦876,000 and a return on investment (ROI) of 1.54. Among producers, the total cost per hectare was ₦2,543,695.80, total revenue ₦5,625,000, net farm income ₦3,081,304.20, and ROI 1.83, the highest among all actors. Wholesalers recorded a total cost of ₦695,500 per week, total revenue of ₦770,000, a marketing margin of ₦74,500, and an ROI of 1.11. Retailers incurred ₦124,900 per week in total cost, realised ₦147,000 in revenue, and achieved a gross margin of ₦22,100 with an ROI of 1.20. Processors expended ₦347,900 weekly, earned ₦378,000, generated ₦30,100 as net income, and recorded an ROI of 1.09. These findings indicate that sugarcane production is the most profitable enterprise, followed by stem cutting supply, retailing, wholesaling, and processing. The study concludes that all actors in the sugarcane value chain operate profitably but with varying levels of cost efficiency. However, high input costs, poor access to credit, and weak cooperative linkages hinder optimal performance. It therefore recommends the strengthening of cooperative societies, improvement in access to affordable credit, and subsidisation of input costs to enhance efficiency, profitability, and inclusive growth across the sugarcane value chain in Kebbi State.
Keywords: Sugarcane value chain, Cost efficiency, Return on investment, Profitability analysis, Kebbi State