The Economic Analysis of Oil Palm Processing in Ilesa East Local Government Area of Osun State, Nigeria

  • Oyebisi Olajide O. Doctoral Student
Keywords: oil palm, processing, factors, cost, returns, regression


The study focused on the economic analysis of oil palm processing in Ilesa East Local Government Area of the State of Osun. The objectives of the study were to determine the factors affecting palm oil production and estimate the costs and returns of oil palm processing in the study area.

Primary data were collected from 120 oil palm farmers using multiple stage random sampling procedure in the Local Government Area. Data were analysed using descriptive statistics, budgetary analysis and multiple regressions.

The descriptive statistics revealed that most of the farmers lack formal education. The mean age is 53 years and the industry is dominated by men. The budgetary analysis showed that oil palm processing is a profitable enterprise. The average Gross Margin was ₦77,613.30 and Net Profit of ₦39,146.64 in a production period of 4-6 months. The BCR and IRR are 1.26 and 25.8% respectively.

The regression results revealed that the quantity of Fresh Fruit Bunches (FFB), the Variety of oil palm fruits, the Method adopted in processing, Processing Period, and the level of Education impacted significantly on the Quantity of red oil produced. This directly affected the income of the sampled farmers. The various activities involved in oil palm extraction are still traditional (marjorly).

Policy recommendations include sensitization and enlightenment programme to encourage people to venture into oil palm industry, provision of improved variety of oil palm seedlings, modern equipment and processing machines at subsidized rate.


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Author Biography

Oyebisi Olajide O., Doctoral Student

Department of Agricultural Economics

University of Ibadan, Ibadan Nigeria.


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How to Cite
Olajide O., O. (2020). The Economic Analysis of Oil Palm Processing in Ilesa East Local Government Area of Osun State, Nigeria. GPH - IJAR International Journal of Agriculture and Research, 3(11), 08-21. Retrieved from