EVALUATION OF PROFIT EFFICIENCY OF ONION (Allium cepa L.) AMONG VALUE CHAIN ACTORS IN KEBBI STATE, NIGERIA

Onion is a market sensitive vegetable crops that generates undulations in trade with retarding
issues like perishabilty, pricing inefficiency, market coordination gaps etc , however a vital
source of revenue. This study aimed to evaluate profit performance of onion value chain actors
in Kebbi State, Nigeria. Multistage and simple random sampling procedures were used to select
366 respondents from the study area based on sampling frame. Primary data was obtained using
questionnaires and focal group discussion from ten local government areas and two notable
onion markets in the State. Gross margin analysis reveals that efficiency ratios of all the actors
were less than one indicating, onion production and marketing is profitable. The Cobb-Douglas
production function results revealed that producer’s profit efficiencies varied from 56% to 89%
averaging 89% frontier profits, meaning 11% of the profit was lost due to combination of
technical and allocative inefficiencies. Wholesalers’ profit efficiencies varied between 55% and
95% averaging 80% frontier profits, suggesting 20% of the profit was lost due to combination
of technical and allocative inefficiencies and educational level, distance to market influence
wholesalers’ profit efficiency. Exporters’ profit efficiencies varied from 55% to 95% averaging
80% frontier profits, indicating 20% of the profit was lost due to combination of technical and
allocative inefficiencies, whereas age, market-distance, unfavourable weather significantly
influence profit efficiency. Onion is a viable agribusiness for the unemployed youths and a
means of reliable livelihood. Therefore, sustainable interventions through government support
policies to encourage adult basic business education system are paramount.