Abstract
This study analysed cashew nut marketing in Kwara State,
Nigeria. Data were collected from the respondents with the aid of a structured
questionnaire. The analytical tools employed were the herfindahl index,
descriptive, gross margin and regression analyses. The study revealed that most
of the wholesale marketers (81.1%) were male with mean age of 33.5 years. The
study revealed a monthly gross margin of N1, 821, 922. The average rate of
returns to total investment was 25.5% implying that an average profit of N0.25k
could be realized on every naira invested in cashew nuts marketing in the study
area. The Herfindah index was 0.007 and this revealed that cashew nut market
tended towards pure competition. The coefficient of multiple determinations (R2)
was 0.506%, implying that about 51% of the total variation in output was
explained by the independent variables. Moreover, the purchase cost (X1),
transport cost (X3), agent cost (X4) and storage cost (X5)
were indicated as the important variables determining the returns of cashew nut
marketing. The marketing of cashew nuts is mostly affected by price instability
due to the seasonal nature of cashew nut production, poor storage and
processing facilities. Consequently, a controllable pricing system for
efficient and effective marketing is recommended. Marketers are to ensure good
quality nuts as well as observe good hygiene practices in drying, sorting and
packaging of cashew nut to enhance their profitability. More researches into
the production of high yielding varieties of cashew nuts and policies that
lower the costs of marketing should be vigorously pursued.
CHAPTER ONE
INTRODUTION
1.0 Background of the Study
The cashew tree (Anacardium occidentale); whose English
name “Cashew” is derived from the Portuguese name for the fruit of the cashew
tree cajú, which itself is derived from the Tupian word acajú, literally meaning "nut that produces
itself" is a tropical evergreen tree that produces the cashew seed and
the cashew apple. The generic name Anacardium, derived from
Greek (aná or above) and (kardÃa or heart), refers to the unusual location of
the seed above the core or heart of the fruit. It can grow as high as 14m (46ft),
but the dwarf cashew, growing up to 6m (20ft), has proved more profitable, with
earlier maturity and higher yields. The species is originally native to
northeastern Brazil (Topper and Callgari, 1999). The cashew tree is large
and evergreen, growing to 14m (46ft) tall, with a
short, often irregularly shaped trunk. The leaves are
spirally arranged, leathery textured, elliptic to obovate, 4–22cm (1.6–8.7in)
long and 2–15cm (0.79–5.91in) broad, with smooth margins. The flowers are produced in a panicle or corymbs up to 26 cm (10 in) long; each flower is
small, pale green at first, then turning reddish, with five slender,
acute petals 7–15mm (0.28–0.59in) long. It requires 500 to 1600 mm of rainfall,
which may last for 70 to 200 days of rainy season in the Sudan savanna. The
cashew nut, often simply called a cashew, is widely consumed on its own, used
in recipes, or processed into cashew cheese or cashew butter. The shell of the cashew seed yields derivatives that can be
used in many applications including lubricants, waterproofing, paints, and arms
marketing. The cashew apple is light reddish to yellow fruit, whose pulp can be
processed into a sweet, astringent fruit drink or distilled into
liquor. Though the plant was primarily intended for checking soil erosion, it
is now mainly grown for its commercial importance, kernel and shell oil (Nweze,
2002). Cashew apple and cashew nut is produced from cashew tree, it has a
pear-shaped structure, with colour ranging from light red to yellow, and its
fruit is pulpy or juicy and the skin delicate, it is grown in tropical areas
and the cashew seed; also called “Cashew” is widely consumed. Currently, the
major cashew producing countries is Vietnam, Nigeria, India and Ivory
Coast. Cashew producing states in Nigeria are Kaduna, Abia, Kogi, Enugu, Kwara,
Oyo, Niger, Imo, and Abuja FCT. It takes a cashew plant about 2-3 years to grow
from seed, with the tree first developing a drupe; it later develops into a
cashew apple from the small stalk bearing the drupe. The fruit which is the
cashew apple also bears a single seed known as the cashew nut. Unlike the cashew
fruit which can be eaten when plucked, the nut can’t be eaten unless after
being roasted, it contains a toxin which can only be destroyed by smoke or fire
(Adinya, 2001). Cashew is a seasonal fruit in Nigeria and in other areas of
cultivation, and a succulent one, though it is highly perishable, it is highly
sought after in the Nigerian market. Its fleshy pulp and nuts can be eaten and
it is very nutritional as it is a good source of protein and contains also Selenium,
Manganese, Copper, and Phosphorus, Magnesium, Iron and Vitamin B6. Consumption
of cashew and its nuts can greatly help in weight management, prevention of
gall stones, bone development and prevention of bone diseases, reduction of
heart diseases, and other numerous health benefits. Cashew can either be
eaten as a fruit or processed into cashew butter and cheese. The cashew nut
yields for the traditional tree are about 0.25 metric tons per hectare, in
contrast to over a ton per hectare for the dwarf variety. Grafting and other
modern tree management technologies are used to further improve and sustain
cashew nut yields in commercial orchards (ACA, 2012).
Globally, 50 percent of cashew nut
produced is used for oil extraction, 37% for confectionary use and 12% for seed
purposes. It is an important component of Nigerian diet and about 5 percent of
the estimated 58.9g of crude protein available per head per day is contributed
by cashew nut (Panwal, 2006). According to Echekwu and Emeka, 2005, cashew nut
contains 25% protein and more than 40% oil. Its flour is used as an ingredient
in soup, confectionaries and pudding. Cashew nut cake is often deep fried or
dried to make a snack called Kuli-Kuli (Hamidu et al 2006). Similarly, Cashew nut haulms
also provide excellent hay for livestock (Taru et al, 2010). Okolo and Utoh (2008) estimated that Nigeria’s
cultivated area under cashew nut cultivation is about 1.0 to 2.5 million
hectares annually and yield in the range of 500 -300kg/ha while the seed yield
in Northern Nigeria is about 3000kg/ha. Africa contributed over 45% of an
estimate of 4,152,315 MT of the global cashew marketing in 2012. In recent
times, there has been a steady increase in Nigeria’s annual cashew nut marketing
from 466,000 MT in the year 2000 to 836,500 MT in the year 2012. The marketing
figure of 2012 for Nigeria worth 45% of cashew nuts produced in African
(FAOSTAT, 2015). Other major cashew producing countries in Africa are Ivory
Coast, Tanzania, Mozambique and Guinea Bissau.
1.2 Statement of Problem
Marketing is one of the significant aspects of Nigerian
agriculture. Agricultural marketing is the performance of all the activities
involved in the flow of agricultural products and services from the initial
points of production until they reach the hands of the ultimate consumers. Poor
trading systems of some crops and their products partly lead to the inherent
inefficient agricultural commodity marketing in Nigeria. For the cashew nut
produce, its marketing involves several players and channels. It starts from
the sale of raw cashew nuts by gatherers and farmers to the retailers who then
sell to the wholesalers until it reaches the level of the processors, for
selling of the processed and graded kernels to the ultimate consumers. Despite
the critical roles of marketing in Nigeria’s agricultural development,
successive governments paid more attention to the production aspect of
agriculture, with little attention to marketing related activities (Idachaba,
2000). One of the major problems facing farmers/marketers in the developing
world is lack of storage and processing facilities for the perishable and
seasonal agricultural commodities (Bani, 1995). This is more so for cashew nuts
that are mostly harvested prematurely and store without being dried properly.
These resulted in low quality and poor pcashew nutd nuts when taken to the
market. In addition, most consumer markets in Nigeria are not well developed
particularly in the area of weights and measures. There are no standard units
of measurement and lack of uniform means of measurement in most areas and where
such exist, they have been tampered with. This leaves the consumer to their
preferences and bargaining capabilities in securing a good deal. The cashew nut
gatherers are often times exploited by the so-called cashew nut retailers and
wholesalers. They end up getting peanuts for the sales of their nuts just
because they cannot afford to transport their nuts to the cities. One of the
major problems facing farmers/marketers in the developing world is lack of
storage and processing facilities for the perishable and seasonal agricultural
commodities (Bani, 1995). Cashew nuts when harvested prematurely or stored
without drying properly, could cause low quality nuts and eventually lead to
poor pricing when taken to the market. Due to lack of processing facilities and
market outlets most raw cashew nuts produced in Nigeria are exported to India
for processing from where they may be taken to Europe and America for further
consumptions (Andrighetti et al, 2010). Almost all the countries in Africa send
their raw nuts to India for processing because they have a long tradition and
good reputation as a high quality processor of cashew. This study therefore, would analyse the profitability analysis of cashew nut marketing in
Umunneochi L.G.A of Abia State, Nigeria.
1.3 RESEARCH
QUESTIONS
However,
this study is designed to seek answers to the following questions:
i.
What are the socio-economic
characteristics of cashew nut marketers in the study area?
ii.
What are the marketing practices and strategies
used for the cashew nut produced in the study area?
iii.
What is the return on investment rate
for cashew nut sellers (retailers and wholesalers) in the study area?
iv.
What is the relevant relationship
existing between marketing variables and revenue generated by the marketers?
v.
What are the cost and returns associated
with cashew nut marketing in the study area?
1.4 OBJECTIVES
OF THE STUDY
The broad
objective of this study will be to analyse the profitability of cashew nut
marketing in Umunneochi L.G.A of Abia State. The specific objectives will be:
i.
describe
the socio-economic characteristics of the respondents in the study area;
ii.
examine
the marketing practices of cashew nut enterprises in the study area;
iii.
estimate
the cost, returns and benefits of cost ratio;
iv.
analyze
the statistical relationship between marketing variables and revenue generated
by the marketers.
1.5 SIGINIFICANCE OF THE STUDY
This study will address the
socio-economic issues of cashew nut marketers in Umunneochi L.G.A and equally
identify the cost and returns associated with cashew nut marketing in the study
area.
1.6 SCOPE
OF THE STUDY
This
study will be carried out in Umunneochi L.G.A of Abia State and for the purpose
of the study, four (4) communities; Lekwesi, Leru, Lokpaukwu, Lomara.
1.6 RESEARCH HYPOTHESIS
HO1:
The socioeconomic characteristics of cashew nut marketers does not affect cashew
nut marketing in the study area.
HO2:
The current marketing practices in use by marketers does not improve the marketing/sales
of cashew nut in the study area.
HO3:
There is no relationship between cost of marketing and the output of cashew nut
farmers in the study area.
1.7 JUSTIFICATION
OF THE STUDY
This
study described the marketing functions, estimated costs and returns to cashew
nuts marketing and determines the factors influencing net returns of cashew
nuts marketers. This study will examine and ascertain the socio-economic
characteristics of the cashew nut marketers in the study area will. The study
will also examine the marketing, promotion and sales practices adopted by both retailers
and wholesalers in the study area. This
study is also aimed at the following
1.
To the Federal
Government, they can use this work to know the kind of policies that will help
the production as well as the marketing of cashew nut not only in the study
area but in Nigeria generally.
2.
To the Researchers,
this study will be very significant because it will add to the existing
literatures or research of work relating to cashew nut marketing.
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