ABSTRACT
The socio-economic characteristics, value chain processors, cost and returns; and problems faced by oil palm processing and value addition were examined in Ovia North-East local government area, Edo state, Nigeria. 97 palm fruit processor in Ovia North-East LGA, were used for the study. Primary data collected by the use of questionnaires were analyzed using percentages, mean, and cost and return analysis. Results revealed that majority of the respondents were mid-level educated married processor with slightly equal number of male and female, within the age bracket of 31-50 years, having a household size of 1-5 members, with about 10years of experience in palm oil processing. It was also revealed that the total revenue in oil palm processing in the study area was ₦1,789,964.45 of which palm oil account for 47.83% of the total revenue. The total variable cost was ₦270,204.8, total fixed cost was ₦609,231.06, with a gross margin of ₦1,519,759.65 and net profit of ₦1,180,733.39. Value added to oil palm processing showed that: 100% value was added in the processing of palm kernel from palm oil, 19.83% value was added in the processing of palm kernel shells and nuts from palm kernel, while 100% value was added in the processing of palm kernel oil from palm kernel nut. It was also observed that 100% value was added in the processing of press cake, broom and empty fruit bunch. The study also reveals that the major challenges of oil palm processing in the study area were: lack of capital to start up the business, lack of credit facilities, high cost of fuel, lack of access to modern processing equipment, high risk in processing and marketing, poor knowledge of modern processing techniques, unstable prices of oil palm products, high cost of processing machine, lack of storage facilities and high cost of transportation. This study concluded that adding value to palm fruit was profitable with total net profit of ₦1,180,733.39 and return per naira of ₦16.31 indicating a ₦16.31 kobo returns for every one Naira (₦1.00) invested in oil palm processing, thus, suggesting that oil palm processing is a profitable business in the study areas, irrespective of the problems militating against it.
