L.O. Jimoh1*, K.M. Idris-Adeniyi2, F.O. Ajayi2, H.T. Yakubu1

1Department of Agricultural Economics and Agribusiness Management, Osun State University, Osogbo, Osun State, Nigeria. P.M.B 4494, Main Campus, Osogbo
2Department of Agricultural Extension and Rural Development, Osun State University, Osogbo, Osun State, Nigeria P.M.B 4494, Main Campus, Osogbo

(Manuscript received 2 June 2024; accepted for publication 5 November 2024)

Abstract. The study analyzed comparative returns on investment of oil palm processing under different techniques in Olorunda Local Government area, Osun State, Nigeria. Data were collected between March and May, 2022 from 120 processors and analyzed to describe the socio-economic characteristics of oil palm processors, the net return on production, the determinants of oil palm output and major constraints encountered in oil palm processing in the study area. Multi-stage sampling procedures were used to select processors for the study. Primary data were collected with the aid of semi-structured questionnaire and analyzed using both descriptive and inferential statistics such as frequency distribution, tables, stochastic frontier production function and budgetary analytical tools. It was found that oil palm processing enterprise is female dominated majorly operating traditional method. The majority (69.2%) had formal education, while (61.7%) do not belong to cooperative society. The result further revealed an average benefit cost ratio (BCR) of N1.42 implying that oil palm processing is profitable in the study area. However, the traditional method is less profitable accruing a net revenue of N35243.24 and a BCR of 1.25 compared to modern method returning higher N109872 and a BCR of 1.5. Furthermore, coefficients of level of education (P<0.05), membership of cooperative society (P<0.1) and method of processing (P<0.01) were positive and significant to the quantity of oil produced, while inadequate finance, high cost of processing equipment among others were the major challenges to oil palm processing. In conclusion, establishment of commercial palm fruit plantation, cooperative equipment leasing and provision of low interest loan are recommended for an enhanced economic well-being.