Analysis of the Determinants and Profitability of Maize Value Chain in Southeast Nigeria
Abstract
The study analysed the determinants and profitability of maize value chain in Southeast, Nigeria. The study used primary data collected from four hundred and eighty (480) actors spread across Anambra and Ebonyi states of southeast, Nigeria. Data collection lasted from January 2025 to June 2025 and covered the 2023/2024 production season. The results of the study show that the average total revenue realized by maize seed suppliers, producers, processors and marketers respectively were N477,280.08, N3,420,276, N619,554.8 and N1,385,393.2 per ton with a total variable cost of N36,795.0, N228,777, N111,964 and N397,565 respectively and total fixed cost of N6,702, N18,890, N3,885.0 and N17,788 respectively. The maize actors made a net income of N433,783, N3,172,609 N503,705 and N970,040 respectively. The profitability index estimated are 9.97, 12.81, 4.35 and 2.34 respectively indicating that for every N1 invested by the respective actors yielded N9.97, N12.81, N4.35 and N2.34 to maize seed suppliers, producers, processors and marketers respectively. The results further show that maize seed producers contributed (2.03%) to the value chain while the marketers, seed suppliers and processors contributed (0.62%), (0.36%) and (0.33%) respectively. The determinants of maize seed supply are age, marital status, household size, educational level, years of experience, input cost, transportation cost, preservation and products costs, while gender, marital status, educational level, farm size, labour costs, input cost and product cost are the determinants of maize seed production. The determinants of maize seed processing are gender, age, household size, educational level, input cost and product cost while age, educational level, years of marketing experience, membership of marketing association, transportation cost, input cost and product cost are the determinants of maize seed marketing.
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Introduction
Maize as one of the most important cereal crops in the world is produced in a large quantity in Nigeria with the country as the tenth largest producer of the crop in Africa (IITA, 2012). Maize production in Nigeria is characterized by seasonality in production and lack of storage facilities. Due to the poor storage condition of maize in the area, prices fall during the peak production season thus resulting in low net returns to farmers. Despite being a staple crop with high local demand, the maize value chain in Southeast Nigeria suffers from low farm productivity, high post-harvest losses, weak processing and storage capacity, poor access to quality inputs and finance, and fragmented markets. Transportation of maize to the local markets is expensive due to poor road infrastructure in the area while packaging of maize in extended bags of 100kg has led to exploitation of farmers by traders. On the supply side, few local processors engage in meaningful value addition such as fortified flour, animal feed and starches thus leaving farmers to depend on market sales which are vulnerable to price swings. Market inefficiencies resulting from weak aggregation systems and limited market information constrain farmers’ access to formal finance and insurance. Furthermore, institutional and policy gaps due to weak extension system, inconsistent input subsidy policy and limited public investment in storage facilities further exacerbate these problems. As a result of these, there is reduction in farmers’ incomes and limitations in the region’scapacity to supply value-added maize products. In view of the above, this study therefore seeks to: 1) Examine the socio-economic characteristics of maize value chain actors in the area, 2) Estimate the net margin and profitability of maize value chain in the area, 3) Evaluate the determinants of value addition of maize input suppliers, producers, processors and marketers in the study area.
This study was carried out covering the entire south-eastern states so as to fill the gap in knowledge observed when it was first executed in Imo state, Nigeria.
Conclusion
The study analysed the determinants and profitability of the maize value chain in Southeast Nigeria. Key findings indicate that maize production is the most profitable segment (Profitability Index = 12.81), while marketing is the least profitable (PI = 2.34) due to high transportation and packaging costs. Producers also contributed the largest share (2.03%) to the chain'stotal value. The determinants of profitability vary across actor groups but consistently highlight the significant negative impact of transportation and input costs, and the positive role of education, experience, and cooperative membership. These findings underscore the need for targeted interventions, such as improved rural infrastructure, input subsidy programs, and the promotion of farmer cooperatives, to enhance efficiency and profitability across the maize value chain in Southeast Nigeria.
