Economic Assessment of Yam Production Before and After Fuel Subsidy Removal in Okpokwu Local Government Area of Benue State, Nigeria

Abstract

This study was carried out to examine the economic assessment of yam production before and after fuel subsidy removal in Okpokwu Local Government Area of Benue State. A public opinion survey design was adopted for the study; a multi-stage technique was used to select 120 yam producers. Data for the study were sourced from primary sources with a questionnaire. Descriptive statistics, budgetary analysis and paired sample t-tests were tools for data analysis. Results revealed that the gross margin per annum was estimated at 1, 538,300.00NGN before the removal of the fuel subsidy and 737,125.83NGN. The mean difference of 801,224.00NGN was positive and significant at a 1% level of probability. This result indicates that yam production was a profitable venture in the study area before and after the removal of fuel subsidies. However, the profit before the fuel removal was higher than after the fuel subsidy removal.  The result also showed that the major challenges faced by yam producers were high input cost (100.0%), high cost of transportation (86.7%) and removal of fuel subsidy (77.5%). It was concluded that the removal of fuel subsidy reduced the profit-making potential of yam farmers due to an increase in the price of agricultural production inputs, cost of transportation, and cost of labour for weeding and heaps. It was recommended that farmers should be encouraged to form and join agricultural inputs cooperatives to take advantage of economies of scale in the purchase of agricultural production inputs.