Economics of Value Added Cashew Products Processed in South-East Zone, Nigeria

Economics of value-added cashew products processed in the South-East zone, Nigeria was analysed. A cross-sectional survey design involving a structured questionnaire was used to obtain data from 353 randomly and purposively selected respondents. Ratio statistics, gross margin, benefit-cost ratio analysis, rate of return and ANOVA were applied to analyse the data. The results show that variable cost constitutes 96 but ≤ 98 per cent of the total cost of cashew value addition. The average net income from 1kg of value-added cashew products is profitable with cashew kernel yielding the highest net income (N2,724.4 (US $7.6) cashew nut (N2,547.9 (US $7.1)) both cashew products (N2,340.4 (US $6.5)). The benefit-cost ratios for 1kg of value-added cashew nut and cashew kernel were slightly higher (1:1.4) respectively than that of both cashew products (1:1.3), suggesting that value-added cashew products deliver positive net income to the processors. Equally, the rate of returns (RORs) for 1kg of value-added cashew products yield the highest (38.1 per cent) in cashew kernel cashew nut (37.4 per cent) both cashew products (34.1 per cent). The coefficient of dispersion (COD) in revenue and cost of value-added products shows the least risk in cashew kernel (0.097) and highest risk in both cashew products (0.122). The study provides empirical evidence for potential small and medium scale investors to make an informed investment decision about value addition to cashew products. It is recommended that government should encourage people to engage in value addition to cashew products because of its high rate of return, and assist processors with credit to procure modern processing equipment to enhance profitability and income generation