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International Journal of Applied Research and Technology

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Economic Analysis of Soybean Production in Taraba State,

Nigeria.

Samuel, P. and Idris, M

Taraba State University Jalingo, Nigeria.

Available online: November 30, 2021.

To cite this article:

Samuel, P. and Idris, M. (2021). Economic Analysis of Soybean Production in Taraba State, Nigeria. International Journal of
Applied Research and Technology. 10(11): 24 – 44.

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 International Journal of Applied Research and Technology 26

International Journal of Applied Research and Technology Esxon Publishers

Vol. 10, No. 11, November 2021, 24 – 44.

Economic Analysis of Soybean Production in Taraba State, Nigeria.

Samuel, P. and Idris, M

Taraba State University Jalingo, Nigeria.

(Received: 23 November 2021 / Accepted: 24 November 2021 / Published: 30 November 2021).

Abstract
This study analyzed the economics of soybean production in Taraba State, Nigeria. The specific objectives were
to: estimate the profitability of soybean production and its determinants, examine the efficiency levels of soybean
production, estimate the level of investment in soybean production and its determinants, ascertain the sustainability of
soybean production and examine the challenges of soybean production in the study area. Multistage, purposive and simple
random sampling techniques were used to select 240 respondents for the study. Data for this study was collected using
structured interview schedule (questionnaire). The objectives of the study were achieved using cost and return, profitability
index and economic viability, stochastic production frontier, descriptive statistics And investment function, price stability
& income contribution and principal component analysis. The result obtained from the study revealed that soya beans
production is very profitable in the study area with a gross margin and net farm income of ₦168,908.6 and ₦106,694.04
per hectare respectively, soybean enterprise in the study area have 43.6% chance for improving production efficiency
using the existing technology of the best farmer, 49.1% shortfall in allocative efficiency of an average farmer,
56.25soybean enterprise had an efficiency index less than 50% while 54 enterprises had between 50% -79.9% which
indicates a moderate economic level efficiency of enterprise in the study area. Result on the level of investment showed
that soybean farmers invest more in buying farm equipment which accounted for 39.17%. An average sustainable index of
0.748 was obtained from the study which implies that the business sustainability performance is adjusted regularly to the
sustainability goals and has significant improvements potentials. The result also showed that all the factors were significant
and responsible problems associated with soybean production in Taraba State. It was recommended that farmers should be
encouraged by the Government and Non-Governmental organization to participate in soybean production in order to
increase the level of output.

Key word: soybean, production, profitability, efficiency, sustainability, constraints, Taraba State.

For corresponding author:

E-mail: [email protected]
Subject: 1121-0217.
© 2021 Esxon Publishers. All rights reserved.
Samuel and Idris (2021).
 International Journal of Applied Research and Technology 27
Introduction
Soybean (Zea mays L) is an annual crop of great importance, it was domesticated from America. It is used as a
source of carbohydrate to both human (in the developing countries) and animal feed worldwide due to its high feeding
value (Sahel capital, 2017). It is recently used in production of biofuel. It is equally well accepted for feed ingredient and
can contribute up to 30% protein, 60% energy, and 90% starch in animal diet. Soybean is one of the important crops
occupying third position next to wheat and rice in cereal production in the world (Khojely, et al., 2018). Soybean has been
recognized as a common component in most intercropping system. It seems to lead as the cereal constituent of intercrop
and is regularly combined with dissimilar legumes (Mahendra et al., 2018). Soybean yield is generally higher in high solar
intensities, lower night temperatures and lower incidence of pest and diseases (Daramola, et al., 2019). Investment in small
scale soybean production in North East Nigeria which yields a stream of returns over time, investments include purchase of
seed, the purchase of machinery, equipment and transport for commercial purposes. Soybean farmer’s decisions to invest
and to produce are closely influenced by access to financial instruments. If appropriate risk mitigation products are lacking,
or if available financial instruments do not match farmers’ needs, farmers may be discouraged to adopt better technologies,
to purchase agricultural inputs, or to make other decisions that can improve the efficiency of their businesses. Improving
access to finance can increase farmers’ investment choices and provide them with more effective tools to manage risks
(Obike et al., 2017). Thus, proper investment as a key element for any farmer to be productive, to compete, create jobs,
help in food security, especially in the developing nations and generally to succeed (Okeke and Onwumere, 2017). One of
the major food problems in Nigeria is the gross deficiency in protein intake, both in quantity and quality. Although, protein
in human diet is derived from both plant and animal sources, the declining consumption of animal protein due to its high
prices requires alternative sources. Soybean provides a cheaper and high protein rich alternative substitute to animal
protein. It is an important crop in the world and has been the dominant oilseed since the 1960s. It is a multipurpose crop
and its importance ranges from its use in milk production, oil processing, livestock feeds, medical, industrial and human
consumption and more recently, as a source of bio-energy (Omoigui et al., 2020).
The low national soybean production is caused by several factors, such as: unavailability of land allocation that is
definitely and specifically intended for the soybean production system; high-risk soybean farming, low productivity and
low soybean farming income; perpetrators of soybean farming of traditional farmers with a small business scale; slow
adoption of production technology; and program to increase soybean production which is not focused because the harvest
area data is not accurate (Daramola, et al., 2019; Omoigui, et al., 2020). Increasing soybean production in Taraba State not
only in terms of productivity but also on price stability has become a challenging factor to soya bean farmers. Efforts to
increase productivity through government policies in increasing the competitiveness of domestic soybeans and efficiency
of resource use are not feasible. Studies on agricultural efficiency related to soybeans production have been carried out by
numerous scholars across developing countries especially in Africa (Omoigui, et al., 2020; Daramola et al., 2019; Regasa
et al., 2019; Ichaou and Ismaïla, 2016; Upev, et al., 2015). Much of the existing literature on efficiency in Soybean has
exclusively focused on technical efficiency. However, how farmers allocate their resources in response to price incentive is
also an important determinant of profitability of the farming enterprise. In addition, Technical, allocative and economic
efficiency are important in improving the productivity gains from existing technologies. To achieve optimum production
level, resources available must be used efficiently. Successful planning and result-oriented policies require the technical
knowledge of productivities of farm resources to know the needed necessary adjustments to achieve a correct input mix.
Despite its importance, Soybean production in Taraba State is dominated by traditional small scales farmers who
use traditional methods of production. Resources are underutilized in addition to use of low yielding varieties, poor
extension services, inadequate incentives and amenities, which give rise to low output and hence low farm income
(Omoigui et al., 2020; Shehu et al., 2017). In addition, farmers might use resources rationally but not at economic optimal
level, all these contribute to low output. The small-scale production of soybean in Taraba State could be attributed mainly
to the relatively small initial capital investment, lack of readily available high yielding varieties and many unresolved and
poorly understood issues associated with land ownership. In view of the foregoing, it is proper to examine the economic
analysis of small-scale soybean production in Taraba State, Nigeria.

Materials and Methods

The study was conducted in Taraba State, Nigeria. Data was collected using structured interview schedules with
the aid of questionnaires. Multistage, purposive and simple random sampling techniques were adopted in sampling 240
respondents for the study. Objective one was achieved using cost and return, profitability index and economic viability.
The stochastic production frontier was used to determine the production level and production efficiency (objective two) of
the soybean farmers in the study area. Objective three was achieved using the descriptive statistics and investment
function. Technical and allocative efficiencies were used to obtain the economic sustainability (objective four) of soybean
production in the study area. Objective five was achieved using the exploratory factor analysis.

Model specification
Cost, return and profitability index for Objective three
NR = TR – TC - - - - - - - - - (3.1)
Where
NR = Net return
TR = Total Revenue
TC = Total cost
Samuel and Idris (2021).
 International Journal of Applied Research and Technology 28
TC = TVC + TFC - - - - - - - - (3.2)5
TVC = Total variable cost
TFC= Total fixed cost
TR = ΣPxQx - - - - - - - - - - -( 3.3)
Px = price per bag of soybean (₦)
Qx = quantity of soybean sold (₦/bag)
GM = TR – TVC - - - - - - - - - - (3.4)
Where; GM = Gross margin
Net farm income (NFI) = GM − TFC - - - - - - - (3.5)
Where; GM = Gross Margin

Ordinary Least Square for determinants of profit

Determinants was expressed implicitly as follows:
𝝅i= f (W1, W2, W3, W4, W5 W6, W7, W8, W9, W10 e) - - - - - (3.29)
Where:
𝝅i = Business profit (N)
W1 = Amount of credit (N)
W2 = Farming experience (years)
W3 = Amount of Savings (N)
W4 = Cultivated farmland (Hectares)
W5 = Sales from Soybean production business (N)
W6 = Amount of investment for ith farmer (N)
W7 = Cost of agrochemicals (including herbicide, pesticide and fertilizer (N))
W8 = Cost of Hiring machinery
W9 = Cost of hired labour
W10 = Distance to farm land (kilometers)

Determinants of amount of investment

I = f (X1, X2, X3, X4…X7) - - - - - - - - - (3.4)
Where:
I= Amount of current investment (N)
X1 = Amount of Loan (N)
X2= Return on Sales (N).
X3 = Level of Education (years)
X4 = Experience (years)
X5 = Farm size (Hectares)
X6 = Depreciation of farm equipment
X7 = Labour force (man-days)

Stochastic efficiency frontier production function for objective five

The stochastic production frontier was used to determine the production level and production efficiency of the
soybean farmers in the study area.
The stochastic efficiency frontier production function is defined by:
Yi = f (Xi, β) exp (Vi – Ui) - - - - - - - (3.10)
Yi = Soybean output for ith farmers
Xi = corresponding vector of inputs
Yi = f (X1 …………. Xn) - - - - - - - (3.11)
Yi = β0 + β1X1+β2X2+ β3X3…… +βnXn+ ei - - - - - (3.12)
Where ei = Vi-Ui,
Yi =β0 + β1X1+β2X2+ β3X3…… +βnXn+ Vi – Ui - - - - - (3.13)
Vi = is independently and identically distributed random errors, having N (0, σ2) distribution.
Ui = technical inefficiency
ei = error term
Where:
Yi = Soybean output for ith farmer
X1 = Seed/planting material (in kilogramme)
X2 = Cultivated farmland (hectares)
X3 = Fertilizer (in kilogramme)
X4 = Labour in manday
X5 = Pesticides/herbicides (litres)
X6 = Capital (Depreciation, insurance, tax, interest and rent on land)

Samuel and Idris (2021).

 International Journal of Applied Research and Technology 29
In the frontier model specified, to estimate β, which is the vector of the regression parameter, the stochastic
production model is linearized thus:
lnYi = β0+β1lnX1+ β2 lnX2 + β3 lnX3+β4 lnX4 +β5 lnX5 +β6 lnX6 - - - (3.14)
The stochastic frontier cost function for estimating the allocative efficiency adapted from Farrell (1957) is
specified as
Ci = f (Pi, β) exp (Vi – Ui) - - - - - - - -(3.15)
Ci = Soybean total cost for ith farmer
Pi = corresponding vector of input prices
Ci = f (P1………..sPn) - - - - - - (3.16)
Ci = α0 + α1P1+ α2P2+ α3P+ α4P4+ ei - - - - - (3.17)
Where ei = Vi-Ui,
Ci = α0 + α1P1+ α2P2+ α3P3 + α4P4+ α5P5+ Vi – Ui - - - - -(3.18)
Where:
Vi = is independently and identically distributed random errors, having N (0, σ2) distribution.
Ui = allocative inefficiency
ei = error term
Ci = Soybean total production cost for the ith farmer (in naira)
P1 = price of seed/planting material (in naira)
P2 = price of labour (in naira)
P3 = price of fertilizer (in naira)
P4 = price of cultivated land (in naira)
P5 = price of pesticides/ herbicides (in naira)
P6 = price of capital (Value of depreciation, insurance premium, tax, interest and rent on land)

In the frontier model specified, to estimate α, which is the vector of the regression parameter, the stochastic
production cost frontier model is linearized thus:
lnCi = αο+ α1lnP1+ α2lnP2 + α3lnP3 + α4lnP4+ α5lnP5 + α6lnP6 - - -(3.19)
Economic efficiency (EE) is estimated as:
EE= AE * TE - - - - - - -- - (3.20)
Note that 0 ≤ EE ≤ 1ss

The stochastic frontier cost functions model for estimating soybean production level overall economic efficiency
is specified as:
𝐶𝑖= (𝑌𝑖, P𝑖; ∝) + e𝑖 - - - - - - - -(3.21)
where:
𝑖 = 1, 2, 3, …. 𝑛
Where
Ci = represents the total production cost
Yi = represents the output produced
Pi = represents the prices of inputs
α = represents the parameters of the cost function
ei = represents the error term that is composed of two elements, that is:
e = 𝑉𝑖 + 𝑈𝑖
Determinants of production efficiency
The technical inefficiency is outlined by the equation
Ui = δ0 + δ1Q1 + δ2Q2 + δ3Q3 + δ4Q4 + …. + δnQn - Ui - - - -(3.22)

Equation (3.22) outlines the technical inefficiency effect and it also indicates that these effects in a stochastic frontier are
expressed in terms of various explanatory variables, which include the following:
Q1 = age of respondent (years)
Q2 = household size (head count)
Q3 = years of experience (years)
Q4 = years of formal education (years)
Q5 = value of off-farm income (naira)
Q6 = sex of respondent (1=male, 0=female)
Q7 = marital status of respondent (1=married, 0= single)
δ0, δ1, δ2 ……….δ7 are parameters to be estimated.
The allocative inefficiency is outlined by the equation
Ui = ϕ0 + ϕ1Q1 + ϕ2Q2 + ϕ3Q3 + ϕ4Q4 +…. + ϕnQn - Ui - - - -(3.23)

Equation (3.23) outlines the allocative inefficiency effect and it also indicates that these effects in a stochastic cost frontier
are expressed in terms of various explanatory variables, which include the following:
Q1 = age of the respondent (years)
Samuel and Idris (2021).
 International Journal of Applied Research and Technology 30
Q2 = household size (head count)
Q3 = years of experience (years)
Q4 = years of formal education (years)
Q5 = value of off-farm income (naira)
Q6 = sex of respondent (1= male, 0= female)
Q7 = marital status of respondent (1= married, 0= single)
ϕ0, ϕ1, ϕ2 ………… ϕ7 are inefficiency parameters to be estimated.

Measurement of sustainability
The measurement of sustainability in this study follows the approach proposed by Sellito et al., (2010) for
measuring environmental performance and sustainability. The main objective was to capture, with integrated indicators,
the complexity involved in environmental systems and how this manifests itself systemically. To do this, divide the
environmental impact of the operation, in five subsystems, (viz; selection of indicators, homogenization, standardization,
weighting and aggregation), attributing relative importance and describing the overall impact and process indicators that
are evaluated by experts through the Likert scale. Subsequently, they combined the indicators into a global index which
varies between 0 and 100 %.

The sustainability index is given as:

𝑗=3
SI = ∑𝑗=1 ∑𝑖=𝑛
𝑖=1 𝑁𝑃𝑗 𝐺𝑅𝑗 𝑂𝑅𝑗 𝑅𝑗 ................................................................................. (3.18)
Where,
SI = Sustainability Index
NP = Net profit to total sales
GR = Gross ratio
OR = Operating ratio
Rj = Rate or normalized value of the sustainability indicator

The normalization of the indicators can be done through the formula as given:
𝑋𝑖𝑗
𝑖𝑓 𝑋𝑖𝑗 𝑠𝑎𝑡𝑖𝑠𝑓𝑖𝑒𝑠 𝑡ℎ𝑒 𝑐𝑜𝑛𝑑𝑖𝑡𝑖𝑜𝑛 “𝑚𝑜𝑟𝑒 𝑖𝑠 𝑏𝑒𝑡𝑡𝑒𝑟”; 1 𝑖𝑓 𝑋𝑖𝑗 ≥ 𝑚𝑎𝑥{𝑋𝑖𝑗 } “𝑚𝑜𝑟𝑒 𝑖𝑠 𝑏𝑒𝑡𝑡𝑒𝑟”
𝑚𝑎𝑥{𝑋𝑖𝑗}
Rj={ 𝑚𝑖𝑛{𝑋 }
𝑖𝑗
{𝑋 }
𝑖𝑓 𝑋𝑖𝑗 𝑠𝑎𝑡𝑖𝑠𝑓𝑖𝑒𝑠 𝑡ℎ𝑒 𝑐𝑜𝑛𝑑𝑖𝑡𝑖𝑜𝑛 “𝑙𝑒𝑠𝑠 𝑖𝑠 𝑏𝑒𝑡𝑡𝑒𝑟”; 1 𝑖𝑓 𝑋𝑖𝑗 ≤ 𝑚𝑖𝑛{𝑋𝑖𝑗 } “𝑙𝑒𝑠𝑠 𝑖𝑠 𝑏𝑒𝑡𝑡𝑒𝑟”
𝑖𝑗

In the case where the indicators are homogenous and do not need a normalization procedure, an improvement
potential model which measures the level of sustainability of the soybean business was estimated as follows:

SI = 𝑁𝑃𝑗 ∗ 𝐺𝑅𝑗 ∗ 𝑂𝑅𝑗 𝑅𝑗 ................................................................................................ (3.19)

Decision rule: A scale of the sustainability index to give an evaluation of the business performance will follow the one
presented in Table 1.

Exploratory factor analysis.

Principal component factor analysis with varimax-rotation and factor loading of 0.50 was used. Variables with
factor loadings less than 0.50 and variables that loaded in more than one factor was discarded following the study of
Madukwe (2004). The principal component factor analysis model is stated thus:

Y1 = a11Z1 + a12Z2 + * * *+ a1nZn - - - - - - - (3.32)

Y2 = a21Z1 + a22Z2 + * * * + a2nZn - - - - - - - (3.33)
Y3 = a31Z1 + a32Z2 + * * * + a3nZn - - - - - - - (3.34)
Yn = an1Z1 + an2Z2 + * * + anZn - - - - - - - (3.35)

Where

Y1, Y2 …Yn = observed variables / constraints to commercialization

a1 – an = factor loadings
Z1, Z2, …Zn= unobserved underlying factors constraining commercialization as follows:
Z1 = High cost of organic and inorganic fertilizer
Z2 = High cost of cassava stem
Z3 = High cost of agrochemicals
Z4 = Unavailability of labour to carry out farming Activities
Z5 = Very small output
Z6 = Low quality of soybean harvested
Z7 = Very far farm distance
Z8 = High cost of Transportation
Samuel and Idris (2021).
 International Journal of Applied Research and Technology 31
Z9 = Seasonal price variation
Z10 = Bad road network
Z11 = Perishability of the product
Z12 = Poor storage facilities
Z13 = Bulkiness of the goods
Z14 = Poor pricing
Z15 = Pest and diseases
Z16 = Scarcity of farm land
Z17 = Instability in government policy
Z18 = Lack of technical knowledge in the use of land
Z19 = Lack of collateral required to secure loan
Z20 = Poor extension agent farmers contact
Z21 = Barrier to adoption of farming techniques

Results and Discussion

Socio-Economic Characteristics of the Soybean Farmers.
The results on socio-economic characteristics of the soybean farmers in the area are presented in on Table 2. The
result in the Table 2 showed that soybean farmers within age range of 40 – 49 represented 41.7 percent,50-59 years
represented 33.3 percent, 30 – 39 years were 13.3 percent of the sample, whereas farmers between the ages of 60 and 69
represented 11.7 percent. The mean age of the respondent was 48.8years. This means that the farmers are ageing. This
result is in support of the findings of Obasi (2015) who recorded a mean age of 50.4 years. The high percentage of farmers
within 40– 49 and 50 – 59 years might be due to the fact that, within the age bracket, people are still in their active ages
and are capable of undergoing different difficult task and are more financially capable to involved in soya beans
production. Although the implication is that farmers are aging. Mgbada, (2010) noted that Nigerian farmers are mostly old
people. Sex of soybean farmer showed that majority of the respondents (59.17%) were females while 40.83% were males.
The crowding of the female in the soya beans production activities may be due to the fact that soybeans is a crop
that is more associated with women both at its raw stage and its value chain stages. This is in-line with the findings of
Dolaree et al., (2017) where they noted that soybean farming is female dominated because it involves less fatigue and
stress, and the low percentage of male participating in the soya beans farming may also be explained by socio-cultural
factors affecting men, stress involved and the fatigue involved and not as a result of technical and managerial inefficiency.
Furthermore, female is more patient in the harvesting and processing process that are involved in the cultivation of soya
beans This shows that females dominated soybean farming activities in the area. This result proves positive since women
in African countries form big portion of the population undertaken farming activities. However, they face socially
conditioned inequalities in the access, use and control of productive resource. The study showed that majority (91.3%) of
the respondents were married, 2.1% were single while 5.4% and 1.3% were divorced and widows respectively. This is
typical of Nigeria rural setting because family members often serve as a source of additional labor together with cultural
value attached to marriage. This result is in consonant with the findings of Ademola and Olujide (2014) where more than
three-quarter of the farmers were married, implying that household labour might complement farming activities. Marital
status can influence the role and responsibilities as well as occupational lives of members and their family (Kuhn et al.,
2000; Akinbode, 2013). Also, Zalkuwi et al (2014) who found that about 55.67 percent of farmers in Numan Local
Government Area of Adamawa State were married. The result also revealed that a greater proportion (35 %) of the
respondents have between 2.1-3.0 hectares of farm land, 30 percent have between 1.1-2.0 hectares of farm land, 17.92% of
the respondents have between 0.1 -1.0 hectares of farm land, 11.67 percent have between 3.1-4.0 hectares of farm land
while 4.58 percent have between 4.1 -5.0 hectares respectively. The mean farm size is 2.09 hectares. The above situation
reveals that there is skewedness in the distribution of land in the study area. Greater number (35 percent) have small area
usually fragmented holding which supported subsistence agriculture. The result reveal that majority of the farmers are
small-scale farmers. This may be attributed to high level of poverty where poor farmers can only afford small parcel of
land for subsistence farming coupled with inadequate credit facilities necessary to expand their farm lands.
According to FOS/FBS (1999) and Awoke and Okoji (2004), small scale farmers are farmers who cultivate
between 0.1 – 4.99 hectare and produce on subsistence level. The result supports the assertion made by Nnadi and
Amaechi, (2004), that under inheritance, the whole heirs of every family have their shares of land no matter how
fragmented and small their sizes area. This lays credence to the subsistence farming characteristic in the area. The survey
showed that the respondents (20.0%) had spent 1 – 10 years, 38.3% had spent 11- 20 years while 28.3% and 13.3 had spent
21 – 30 and 41 – 50 years in farming respectively. The mean farming experience was approximately 19 years. This showed
that soybean farmers in the study area had considerable experience in farming. This result agrees with Zalkuwi et al (2014)
who found out that about 64.95 percent had farming experience above 5 years. This result shows that majority of the
respondents had much farming experience to improve their production techniques. Because this could positively influence
their management capabilities on the crops, farmers with more years of farming experience may likely to adopt new
innovation and are likely to be technically efficient in their farm practices.
Nwaru (2004) noted that, the number of years a farmer spends in farming business may give an indication of the
practical knowledge he has acquired. The implication of this is that they are equipped to overcome their farming challenges
to a considerable extent (Ademola and Olujide 2014). It also shows that majority (98.8%) of the respondents acquired one
form of formal education or the other. The result implies that the farmers are literate having acquired one level of
Samuel and Idris (2021).
 International Journal of Applied Research and Technology 32
education or the other. This means that they manage and utilized credit properly given their level of education in
innovations and better farming practices. Their high literacy level is an asset as the farmers would be exposed to many
information sources, embrace innovations and analyze farm situations objectively. Undoubtedly, the high level of literacy
predisposes some level of managerial ability in the farm business (Acquah and Addo, 2011; Abula et al., 2013).
Furthermore, this study agreed with findings of Nzeakor and Aigbokie (2021) that education provides a favourable
atmosphere for awareness and adoption of innovation.
The formal educational profile and farm training experience of the farmers could adequately expose them to the
importance of credit farming operation. Zalkuwi et al (2015), also who found out that majority of the respondent have one
form of formal education or another. This has implications on their involvement in agricultural development activities such
as credit scheme since they can access information through print, electronic and professional associations meeting and
workshop. In addition, respondents’ level of education can have positive effect on enhancing their ability to pay back credit
within stipulated payback period. Pasha and Negese (2014) noted that level of education positively and significantly
influenced credit repayment. A dominant number of the farmers indicated membership of association. Specifically,
majority (62.9 percent) indicated that they belong to one association or the other. On the contrary, 37.1 percent indicated
that they do not belong to any association. Membership of association satisfies the social needs of farmers in additions to
serving as an avenue for access to information on agricultural technology. Farmers by virtue of their membership discern
the obvious advantages of agricultural technology as well as clarify their misconception of technology and the adoption.
Farmers that do not belong to association may been ignorant of the obvious gains through membership. This calls for
concerted extension campaigns for farmers’ membership of co-operative society (Nnadi et al, 2013). Majority (81.7%) of
the soybean farmers had contact with extension agent while 18.3% of the sampled population never had extension contact
through farming season. This suggests that greater number of the sampled population had extension visits. Ukoha et al
(2013) reported that better education through improve extension service would lead to improve access to credit, knowledge
and improves farm technologies, farm tools etc. which has strong influence on increased productivity.

Profitability of Soybean Production and its Determinants

Table 3 revealed that, the average total variable cost of production per hectare was ₦135,841.40 while the total
fixed cost per hectare was ₦62,214.56. The total cost of producing soya beans in the study area per hectare was
₦198,055.96. This was largely attributed to the high cost hired labour in the variable cost of production and high cost of
land renting in the fixed cost used in the production. The average outputs of the respondents were 575kg per hectare
(equivalent of 11 ½ bags) and the revenue generated were ₦304,750.0 per hectare for soya beans production. The table
reveals that soya beans production had gross margin and net farm income of ₦168,908.6 and ₦106,694.04 per hectare
respectively. From the analysis the study reveals that soya beans production in Taraba State is very profitable most
especially if the cultivation is commercialized or produced in an extensive system (larger hectares) to enjoy economics of
scale. In general, as noted by Cazzuffi and Mckay (2012), many evidences found low production cost to be positive
associations with low levels of transactions costs especially labour and input costs. The implication is that soybean farming
is profitable (Adirika et al., 2012).

Determinants of Profitability of Soybean Production

The results in Table 4 shows the regression results for determinants of profit for the soybean farmers in the study
area. The choice of appropriate functional form for this study was chosen based on the economic, statistical and
econometric criteria. Based on the criteria stated above double-log functional form was chosen as the lead equation. From
the double-log functional form result, R2 value of 0.917 implies that the specified explanatory variables explained about
91.7% of the total variables in profit. The F-statistic of 245.084 which is statistically significant at 1% probability level,
indicate that the equation has goodness of fit.
The significant variables include amount of credit used, savings, farmland, investment, agrochemicals, cost of
machineries, cost of labour and distance. The coefficient of amount of credit used and saving were positive and highly
significant at 1%, indicating that increase in the amount of credit used and savings increase profit. The implication is that
soybean farmers with greater amount of credit and saving are more likely to perform better in production than their
counterparts who have low or no credit access and saving for next farming season, because access to credit and savings
enable them to purchase more input needed for soybean production. This result confirms the fact that credit contributed
significantly in the profitability of soybean production function. The finding agrees with Abbas, et al (2005) who reported
that increase in performance (profit) is afunction of credit.Access to credit gives the farmer opportunity to enter into
commercialization thereby earning more income for expansion. Hussain (2011) noted that credit is a very vital tool for
boosting the income of the farmer especially the pro-poor enterprise. Access to credit increases the performance of the
enterprise, expands firms and enables individual to acquire technologies; it also enables them to procure farm inputs and
hire labour for enhanced profitability and income (Idu et al., 2016).
The coefficient of farm land was positive and statistically significant at 1%, this shows that an increase farm size
will increase profit of the farmers. The implication is that soybean farmers with small land holdings will produce more
output than those with small land holdings. Meaning that, the more the available land for agriculture production the greater
the output level (Aigbokie et al., 2021). Cost of labour was negative and statistically significant at 1%. This implies that
increase in cost of labour, decrease the profit of the farmers in the area. With this increase, it shows that the cost of
production can be highly influenced by the cost of labour. The goal of production is to maximize profit through the sale of
output realized. A similar result of indirect effect of profit on cost of labor was obtained by Mausoybean et al. (2015).
Samuel and Idris (2021).
 International Journal of Applied Research and Technology 33
The coefficient of investment in soybean was statistically significant at 10% and positively related to profit;
meaning that the level of investment in soybean positively affects the level of profit. The positive sign of the coefficient
showed that as the level of investment in soybean increases, the level of profit increases and vice versa. The implication is
that the enterprises with greater investment are more likely to perform better in production than their counterparts. This
result confirms the fact that investment such maintenance of building and industry premises, equipment, transport,
variables inputs, business assets and inventories etc contributed significantly in the level of profit of the farmers. Also cost
of agrochemical and machineries were significant at 1% and positively related to profit; this implies that the cost of
agrochemical and machineries in an area significantly affect profit: therefore, as cost of agrochemical and machineries, the
profit level also increase, this is dues to economics of scale in used of agrochemical and machineries.
The coefficient of distance was significant at 1% and positively related, the implication of this is that increase in
distance, increase the profit of the soybean farmers. Increase in distance result for search for area where farmer and thus
seek market location where they make better profit. This implies that the soybean enterprise located in urban area make
more profit than those located in rural area and vice versa. Distribution of respondents according to their productivity
levels is presented in table 4.4. The analysis of the productivity levels of the farmers were measured in quantity of soybean
produced (kg) per Naira cost of all variable inputs used i.e kg/N. Results shows that a mean productivity level of 2.17 kg/N
was achieved by the soybean farmers. The implication is that soybean farmers with access to credit have greater
productivity level that farmers without access to credit. This means that soybean farmers got better returns from their
utilization of credit. Increasing agricultural productivity is a vital pre-requisite for rapid economic growth and development
of a country, especially in soybean sector. This implication is that the more the soybean farmers have access to credit, they
channel it to production and in turn get increase output which boost their productivity level.

Efficiency Levels of Soybean Production in the Study Area

The maximum likelihood estimates using stochastic frontier parameters for soybean farming is presented in Table
5. The estimated variance (σ2), gamma (γ) and Log likelihood function indicate goodness of fit with the stochastic frontier
model. For production factors the coefficient of land and labour were statistically significant at 1% and positively related to
total output. This implies that increase in any of these variables will lead to increase in output and vice versa. This is
expected and in accordance with a priori expectations. This result agrees with the findings of Ataboh et al., (2014) on
determinants of technical efficiency where farmland and labour had a direct relationship with production output. Also,
Quantity of fertilizer used was significant at 1% and positively related to output of the soybean farmers, this implies that
the higher the use of fertilizer, the more productive the soybean farmers become. This suggests that when the soybean
farmers adopt and utilize the fertilizer appropriately, it would lead to improved output. This supports the findings of
Ogundele and Okoruwa (2006) which observed that the use of fertilizer increased output of farming Nigeria.
Furthermore, the result shows that there is a positive relationship between the inefficiency variables (household
size, education and marital status) included in the model. This shows that increase in these variables increases the output of
the enterprise. Meaning that, the more the number of persons per household, the greater the output level. Also, education
implied that an increase in level of education by one year increases the output. While a negative relationship exists between
age of farmers, off-farm income and sex. This implies that as soybean farmers advance in age and have increased number
of activities in off-farm sector, the output level decreases. The implication is that the older the farms becomes the more his
output declines. This concur with the findings of (Olwande and Mathenge, 2012). Also, the coefficient of sex was negative
and significant at 1%. This implies that output increase in favour of female farmers.
The estimated parameters for the stochastic frontier cost function for soybean enterprise presented in Table 6
revealed the estimated gamma () parameter of 0.7565 implies that about 76 percent of the variations in the total cost of
production of soybean under was due to differences in their cost efficiencies. This means that cost inefficiency effects do
make significant contributions to the cost of producing soybean in the study area. Therefore, the hypothesis that the
parameter estimates of = 0 is rejected. The test was confirmed by the test of hypothesis using the Log likelihood-ratio test
presented in Table 4.5 which shows the estimated value of -94.14 exceeding the chi-square critical value at 1 percent level
of probability. Therefore, the null hypothesis, which specifies that the inefficiency effects are absent from the model, is
strongly rejected. Specifically, price of planting material, labour, fertilizer, land and price of pesticide were the significant
variables influencing the production cost of the soybean enterprise. The coefficient of price of planting material, labour,
fertilizer, land and price of pesticide were significant at 1% and positively related to production cost for the soybean
enterprise. This implies that a rise in the price of any of variables would result in increase in the total cost of production. A
similar result of direct effect of output on cost of production was obtained by Mausoybean et al. (2015).

Allocative inefficiency
Estimated coefficient for Age (-0.04612), Household size (-0.11008) and experience (-0.11942) were negative.
The negative relationship of soybean farmers indicates a negative effect on cost allocation of respondents. Implying that
older and more experience farmers tend to be cost efficient than younger respondents in soybean enterprise. This means if
younger and energetic soybean farmers indulge into the enterprise, allocative efficiency would rise thereby reducing total
cost of production and vis-a-vis increasing profit. Also increase in household size reduced the lease to decrease in
allocative efficiency.
Table 7 indicates that the values of efficiency obtained lies between 0 and 1. This implies that the soybean
enterprise were operating below the frontier. The general distribution of respondents’ efficiency presented in Table 4.6
shows the obtained minimum, maximum and mean technical efficiency 0.07, 0.94 and 0.564 respectively of the
Samuel and Idris (2021).
 International Journal of Applied Research and Technology 34
respondents indicates that soybean enterprise in the study area have 43.6% chance for improving production efficiency
using the existing technology of the best farmer. Therefore, there is need to increase production by utilizing available
resources to attain the frontier level. About 17.5% of the respondents fall between technical efficiency of 1 - 29%.
Respondents operating at technical efficiency of between 30 and 59% were 35% while respondents with technical
efficiency above 59% were 48%. This showed that there is room for improvement since most farmers had technical
efficiency less that 50 percent.
The allocative efficiency minimum, maximum and mean were 0.04, 0.93 and 0.509 respectively. This shows a wide
distribution of allocative efficiency among the respondents, though, none of the respondents had attained the cost frontier
level of 100%. This implies that there is 49.1% shortfall in allocative efficiency of an average farmer. Respondents
allocating the cost resources between 1 – 29% were 25% of the sample whereas, 38.8% of the respondents allocate cost
resources between 30 to 59% while respondents with allocative efficiency above 59% were 27.5%.
Economic efficiency which is the product of technical and allocative efficiencies shows minimum, maximum and
mean were 0.02, 0.91 and 0.469were obtained, this implies that on the average, the respondents were able to obtain a little
over 46.9% of potential output, thus in the short run, there is a hope for increasing soybean production by 50.4% by
adopting the technology and techniques used by most efficient enterprise as to reduce inefficiency and increase economic
efficiency in soybean production in the study area. The result also reveals that 56.25soybean enterprise had an efficiency
index less than 50% while 54 enterprises had between 50% and 79.9%. Only 30soybean enterprise representing 12.5%
recorded economic efficiency of 80-100%. Soybean enterprise who scored 70% and above are said to be efficient; hence,
only 51 enterprises could be said to be economically efficient in soybean production in the study area. This clearly
indicates a moderate level efficiency of enterprise in the study area. This finding corroborates with findings of Adewuyi
and Joseph, (2013) who reported that enterprise who scored 70% and above are said to be efficient and they indicate a low-
level efficiency of enterprise in the study area. Furthermore, the Technical efficiency of the sampled enterprise is less than
one (i.e. 100%) which `according to Abba, (2019) indicate that all the enterprises are producing below the maximum
efficiency frontier.

Level of Investment and its Determinants in Soybean Production in the Study Area
Level of Investment and ways of Investment
Result in Table 8 shows the various ways of investment and level of investment. Table shows that most of the
soybean farmers invested their income in buying farm equipment, purchasing supplies, covering land costs, refinancing an
older income, marketing campaigns & advertising, making land improvements & repairs, investing in growth, covering
operating costs and rebuilding after natural disasters. Also, from the result in Table average amount of income utilized was
N426,437.41. Specifically, buying farm equipment accounted for 39.17%. This implies that majority of the soybean
farmers utilized their income on buying farm equipment. This is so because the beneficiary can’t run a farm without
specialized equipment. From tractors to irrigation systems to silos, the business is only as good as the equipment they use.
High-quality, reliable equipment lasts longer and will make their job easier. However, it comes with a hefty price tag, that
is why most of the income borrowed is diverted to purchase of equipment. A farmer borrowing income must estimate the
price of specialized equipment and factor them into the size of the agricultural income he/she is applying for they are
planning to take out.
Purchasing supplies accounted for about 27.9%. These are planting materials needed in order to grow the crop,
such as seeds, fertilizer, harvesting tools. Agriculture income can help soybean farmers get off on the right foot by enabling
them to purchase necessary supplies, Farmers borrow enough to cover the operating expenses until they start to generate
revenue. Covering land costs accounted for 27.5%. Agriculture incomes can be used to purchase or lease land. Soybean
farmers need will depend on the type of farming the soybean farmers plan to do. The soybean farmers will need to work
out what kind of land and how much of it is needed and how much it is going to cost in order to decide how much to
borrow. Although it may be difficult to obtain an agriculture income to purchase land without providing something as
collateral. Banks know that farming can be a tough business to succeed in and may want some backing or income co-signer
to ensure that they will be repaid. Refinancing an older income was 36.67%. This implies that if the soybean farmers
already have agriculture incomes outstanding, the soybean farmers may want to refinance. This means taking out a new,
lower-interest income and using the proceeds to pay off the old, higher-interest one. The soybean farmers will still have an
outstanding income but would save money due to the lower interest payments. This is a decision that only makes sense if
the interest savings outweigh the refinancing costs. So, it is best to discuss with the soybean farmers financial advisors and
the soybean farmers’ business team to make sure it makes sense for them.
About 15.8 % reported they utilized income for marketing campaigns & advertising. Once the soybean farms are
up and running, the farmers will need to market the soybean to the produce. From websites to logos to focused group and
campaigns. If the soybean farmers are not familiar with marketing practices, they may want to talk to a consultant to decide
what channels will be most effective for the soybean farmers. For example, trade journals may be a good way to reach out
to business-to-business customers while online marketing may be a better way to get to retail customers. The soybean
farmers can use the agriculture income funds to boost the soybean farm visibility. About 10% of the soybean farmers used
income for making land improvements & repairs. Farms need constant upkeep and maintenance to run efficiently. An
agricultural income can be used for expensive upgrades or repairs to land or infrastructure. This kind of capital
improvement can help boost the farm value, make the farm business more efficient, and improve the soybean output. In
today’s market of conscious consumers, the soybean farmer will want to keep up with the latest trends in ethical farming
and land care, This means investing huge sums.
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 International Journal of Applied Research and Technology 35
Investing in growth was accounted for by 18.3% of the investment by soybean farmers. An agricultural income
can be used to grow the business. When the soybean farmers first started out, they need to spend a large amount of money
on land, equipment, and other supplies. Expanding the soybean farm operation takes similar kinds of investment. They
could use the soybean income to buy more land, larger facilities, and more equipment, more – well. The soybean farmers
can also use the proceeds to hire more labour. Covering operating costs accounted for 20.8%. At the outset, the cost of
running the soybean farm business and getting off the ground can be prohibitive. Farmers can use the income to pay
employees, cover bills, and take care of expenses until the soybean business start to generate cash flows. This is not
forever, but in the interim, a farm income can help the soybean farmers make ends meet.
Rebuilding after natural disasters accounted for 12.5%. The USDA Farm Service Agency (FSA) has a program in
place to help farmers recuperate after natural disasters. Soybean farmers may face drought, flooding, tornadoes, fire, insect
or disease infestations, and other threats that can put a serious dent in the farmers’ ability to generate revenue. When that
happens, the soybean farmers can take out an agriculture income or an FSA income to help cover the costs of repairs,
operating costs, etc.

Determinants of Investment in Soybean Production

Based on statistical and econometric considerations, exponential functional form was chosen as the lead equation.
The coefficient of determination (R2) is 0.748, implying that the explanatory variables accounted for about 74.8% of the
change in the amount invested in farming. The overall significance of the model was measured using F-test, which has a
value of 13.126 which is significant at 1.0% level as shown in Table 9. The coefficient of amount of loan was positive and
highly significant at 1%, indicating that increased in the amount of loan, increased the farmers level of investment. The
implication is that the enterprises with greater amount of credit are more likely to perform better in production than their
counterparts who have low or no credit access. This result confirms the fact that credit contributed significantly in the level
of investment of the soybean enterprise. The finding agrees with Abbas, et al (2005) who reported that increase in
investment is a function of credit. Access to credit gives the business owner opportunity to enter into commercialization
thereby earning more income for expansion. Hussain (2011) noted that credit is a very vital tool for boosting the income of
the soybean enterprise especially the very poor individuals. Access to credit increases the level of investment of the
farmers as they expands their firms this also enables them to acquire modern technologies; it also enables them to procure
farm inputs and hire more labour for enhanced profitability and income (Idu et al., 2016).
The coefficient of Return on Sales (10%) and farm Size (10%) all move in the same direction (positive) with level
of investment. The implication is that as level of investment increase return on sales and farm size will also increase and
vice versa. Increase in investment level such as building, lands, land improvements, equipment, transport, variables inputs,
business assets and inventories, currency, bank deposits, shares and debentures, life insurance premium, will in turn
increase return on Sales and more land holdings and vice versa. The volume of investment has been found to increase
business return (Shitu, 2012). Furthermore, increase in volume of investment was negatively related to Depreciation of
farm equipment. This implies that the more an assets depreciation, the less investment in business building, lands, land
improvements, equipment, and assets. This is against a prior expectation.

Economic sustainability of soybean production in the study area;

Corporate Sustainability Index was used to achieve part of objective five, the result was summarized and
presented in Table 10 The purpose is to understand the sustainability level associated with soybean enterprise in the area.
The measurement of sustainability in this study follows the approach proposed by Sellito et al. (2010) for measuring
sustainability. This captured integrated indicators, the complexity involved in environmental systems and how this
manifests itself systemically. The environmental impact of the operation, in five subsystems (viz selection of indicators,
homogenization, standardization, weighting and aggregation) attributing relative importance and describing the overall
impact and process indicators that are evaluated by experts through the five-point Likert scale. Subsequently, they
combined the indicators into a global index which varies between 0 – 1 (i.e 0 – 100%). Table 10 indicates that the values of
sustainable index obtained lies between 0 and 1. From the result, the average sustainable index was 0.748 which implies
that on the average, the business sustainability performance is adjusted regularly to the sustainability goals and has
significant improvements potentials. An index of 0.75 and above are moderate for the enterprise as it allows the enterprise
to refocus organizational efforts towards the worst indicators (Frank et al., 2014)
Furthermore, the result shows that about 18.52% of total respondent have sustainability index less than 0.65 unit,
this implies that these respondent have poor sustainability level, the implication is that the business sustainability
performance is bad regarding the defined sustainability goals and has large opportunities of improvements. Also 18.52% of
total respondent have sustainability index between 0.65 – 0.74, this implies that these respondents have deficient
sustainability level. The implication is that there is deficient sustainability level with respect to the sustainability goals
defined by the organization and has several opportunities for improvement. About 24.69% of the total respondent have
sustainability index between 0.75 – 0.84; which implies that the business sustainability performance is adjusted regularly to
the sustainability goals and has significant improvement potentials. About 20.99% of the total respondents have
sustainability index between 0.85 – 0.94; which implies that the business sustainability performance is adjusted well to the
goals defined with some possibilities of improvement. While 17.28% of the total respondents have sustainability index
between 0.95 – 1.00, which implies that these respondents have a very well sustainability level: the implication is that the
business sustainability performance is adjusted very well to the goals defined in the organizational strategies. Sustainable

Samuel and Idris (2021).

 International Journal of Applied Research and Technology 36
development indicators and composite indicators are considered to be a good vehicle in helping to measure sustainable
development and progress achieved in the enterprise (UNCSD, 2012)

Challenges of Soybean Production Business

The problems associated with credit access and utilization are shown in Table 11. Seven factors/principal
Components were extracted based on the responses of the respondents. The Kaiser criterion was employed for selecting the
number of underlying factors or Principal Components explaining the data. The number was decided by leaving out
components/loadings with corresponding Eigen values of less than 0.50. Only variables with factor loadings of ≥0.50 were
used in naming the factors/principal Components. Variables that have factor loadings of < 0.50 were not used while
variables that loaded in more than one constraint were also discarded.
The loadings under factor 1 were; High cost of seed (0.601), Unavailability of labour (0.598), Very small output
(0.617), Very far farm distance (0.698), Seasonal price variation (0.688), Perishability of the product (0.653), Bulkiness of
the goods (0.578), Pest and diseases (0.641), and Scarcity of farm land (0.601). The loadings under factor 2 include
Unavailability of labour (0.511), Bulkiness of the goods (0.583), Pest and diseases (0.613), and Scarcity of farm land
(0.544). The third factor include lack of technical knowledge (0.578) and lack of collateral required (0.601). The fourth
factor include instability in government policy (0.575) and barrier to adoption of techniques (0.691). The fifth factor is bad
road network (0.507) and seventh factor is high cost of agrochemical (0.556) (Table 11).
After rotation, the first factor accounted for 21.355% of the variance of the problems associated with credit access
and investment, the second factor accounted for 14.798% of the variances, the third factor accounted for 9.409% of the
variance of problems associated with soybean production and the fourth factor accounted for 8.533% of the observed
variances. The fifth factor accounted for 6.888% of the variance of problems associated with soybean production, the sixth
factor accounted for 5.970% of the observed variances and the seventh factor account for 5.425% of total variation as
shown in Table 12. The four factors explained 72.378% of the variance’s problems associated soybean production.
Communalities measures the proportion of each variable’s variance that can be explained by the principal
component. It represents the relationship between the factors and all other variables (i.e., the squared multiple correlation
between a factor and all other factors). Principal component analysis works on the initial assumption that all variances are
common; therefore, before extraction, the communalities must be one. The values in the extraction column indicate the
proportion of each variable’s variance that can be explained by the principal components. From Table 13, it is observed
that Pest and diseases value was 0.868, Very far farm distance was 0.827 and unavailability of labour was 0.802. The result
shows that all the factors were significant and responsible problems associated with soybean production in Taraba State,
Nigeria. The implication of this result on soybean production is decrease in level of participation in soybean production
which also decreases output of farmers.

Conclusion and Recommendations

Soybean production is a profitable and sustainable business with an attractive net return on investment having a
gross margin and net farm income of ₦168,908.6 and ₦106,694.04 per hectare respectively. Soybean production enterprise
in the study area is technically efficient with 43.6% chance of improving production efficiency using the existing
technology of the best farmer. Also, the enterprise had a sustainability index of 0.748 which implies that the business
sustainability performance is adjusted regularly to the sustainability goals and has significant improvements potentials. It
was also revealed that all the factors were significant and responsible problems associated with soybean production in
Taraba State. Based on the findings from this study, the following recommendations are made: The significant variables
that have influenced level of profit, output, level of investment should be taken into consideration in policy issues, soybean
production was very profitable as shown in the result, there is need for the enterprises to engage more in production.
Therefore government should ensure that farm inputs are made available to the enterprises at a highly subsidized
rate, Since level of credit affect investment, therefore the government should provide credit facilities to the enterprise to
enable them acquire more production resources, especially farm labor and other modern inputs like wire, concrete cage
and other equipment and Nigeria government and international development agencies ensure that any intervention has a
capacity-building component which should center around environmental and ethnographic research, education about the
training on how to interact with soybean farmers and maintain a successful farm, and the development of infrastructure.

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 International Journal of Applied Research and Technology 37
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Tables
Table 1: Sustainability index performance (SIP) evaluation scale
CSI Range Evaluation level
0.95 ≤ SIP ≤ 1 Very well: the business sustainability performance is adjusted very well to the goals defined in the
organizational strategies
0.85 ≤ SIP < 0.95 Well: the business sustainability performance is adjusted well to the
goals defined with some possibilities of improvement
0.75 ≤ SIP < 0.85 Regular: the business sustainability performance is adjusted regular
to the sustainability goals and has significant improvements potentials
0.65 ≤ SIP < 0.75 Deficient: is deficient with respect to sustainability goals defined by
the organization and has several opportunities for improvement
0.65 < SIP Poor: the business sustainability performance is bad regarding the
defined sustainability goals and has large opportunities of
improvements

Table 2: Socio-economic characteristics of the Soybean farmers

Variables Frequency Percentage (%)
Age (years)
30 – 39 31 12.9
40 – 49 81 33.8
50 – 59 76 31.7
60 – 69 28 11.7
69 – 79 19 7.9
79 – 80 5 2.1
Mean 48.8
Sex
Female 142 59.17
Male 98 40.83
Total 240 100.0
Marital status
Single 219 91.3
Married 5 2.1
Divorced 13 5.4
Widow 3 1.3
Farm size
0.1-1.0 43 17.92
1.1-2.0 74 30.83
2.1-3.0 84 35.00
3.1-4.0 28 11.67
Mean 2.09
Experience
1 – 10 48 20.0
11 – 20 88 36.7
21 – 30 68 28.3
31 – 40 32 13.3
41 – 50 2 0.8
51- 60 2 0.8
Education
Never attended 3 1.25
Nursery 11 4.58
Primary 115 48.33
Secondary 60 25.00
Tertiary 46 19.17
Others (e.g Technical) 4 1.67
Association
No 89 37.1
Yes 151 62.9
Extension
No 44 18.3
Yes 196 81.7
Total 240 100.0
Source: Field Survey (2021)

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Table 3: Average Costs and Returns per Hectare of Soya beans Production
Variables/Items Unit cost Quantity Average Cost (N)
{a} Revenue
26500/bag (50kg) 11 ½ bag 304,750.00
{b} Variable cost
Seed 400/kg 29 11768.59
Insecticide 1130/litre 10 11302.22
Herbicide 800/litre 16 12816.86
Fertilizer 780/kg 28 21668.59
Transportation 1100 10 11036.69
Storage 1130 10 11361.26
Family labour 3000/man-days 10 30316
Hired labour 4500/man-day 6 25571.17
Total variable cost 135,841.4
{c} Fixed cost
Farm tools 24757.28
Rent on land 37457.28
Total fixed cost 62,214.56
{d} Total Cost (b + c) 198,055.96
Gross Margin (GM) {a – c} 168,908.6
Net farm Income (NFI) {a –} 106,694.07
Source: Field Survey Data, 2021

Table 4: Determinants of profitability of soybean production

Variables Linear Exponential Semi log Double log+
Intercept 16588.946 11.866 -3042891.057 3.415
(0.386) (103.531) *** (-13.884) *** (10.028) ***
W1 = Amount of credit 2005.039 0.002 85694.178 0.074
(4.308) *** (1.385) (4.664) *** (2.598) **
W2 = Experience 3277.237 0.006 26878.963 0.019
(2.648) ** (1.830) ** (2.888) *** (1.337)
W3 = Savings 7.358 1.752E-5 295021.096 0.860
(18.671) *** (16.678) (17.461) *** (32.766) ***
W4 = Farmland 22572.742 0.062 82763.871 0.130
(4.873) *** (5.009) (3.702) **** (3.730) ***
W5 = Sales -3505.408 -0.004 -24899.462 -0.022
(-3.395) *** (-1.618) * (-2.772) *** (-1.580)
W6 = Investment -0.082 1.416E-6 -3869.354 0.021
(-0.237) (1.539) (-0.569) (1.943) *
W7 = Agrochemicals 36257.505 0.096 19889.361 0.052
(4.079) *** (4.047) (2.237) ** (3.791) ***
W8 = Cost of machinery 1169.254 0.015 -8604.449 0.032
(0.677) (3.261) *** (-0.916) (3.147) ***
W9 = Cost of labour -0.770 -4.506E-6 3607.292 -0.032
(-2.616) (-5.748) *** (0.735) (-4.139) ***
W10 = Distance 882.567 0.000 14612.552 0.032
(2.237) *** (0.201) (2.935) ** (4.164) ***
R2 0.800 0.743 0.800 0.917
R-2 0.791 0.732 0.808 0.914
F-ratio 91.711*** 66.175*** 93.127*** 245.084***
Source: field survey (2021) + lead equation, *** Significant at 1%, ** Significant at 5%, *significant at 10%.

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Table 5: Maximum likelihood estimate of stochastic production frontier function

Variables Coefficient Standard error t-ratio
Production factor
Constant 9.6694 1.9790 4.89***
X1 = Seed/planting material 0.0000 0.0479 0.00
X2 = Cultivated farmland 0.0021 0.0005 4.01***
X3 = Fertilizer 0.9223 0.072 12.81***
X4 = Labour in man-day 0.0005 0.0001 3.70***
X5 = Pesticides/herbicides 0.0000 0.0000 0.000
X6 = Capital -0.0035 0.0045 0.78
Inefficiency factors
Q1 = Age of respondent -0.8541 0.0913 -9.35***
Q2 = Household size 0.0006 0.0001 7.05***
Q3 = Experience 0.0657 0.1106 0.59
Q4 = Formal education (years) 0.9465 0.0407 23.26***
Q5 = Off-farm income (naira) -0.4425 0.0880 -5.03***
Q6 = Sex -0.9345 0.0988 -9.46***
Q7 = Marital status 0.6999 0.0781 8.96***
Sigma squared (()) 1.0591 0.0619 17.10***
Gamma () 1.4138 0.0119
Log likelihood function -83.84
LR test 104***
Source: Field Survey data, 2021 ***, *; Significant at 1% and 10%, respectively

Table 6: Allocative efficiency of soybean enterprises

Variables Coefficient Standard error t-ratio
Allocative efficiency
Constant 10.68781 3.16331 3.38***
P1 = Price of seed 0.15743 0.00329 47.90***
P2 = price of labour 0.15204 0.00566 26.84***
P3 = Price of fertilizer 0.24069 0.00145 165.59***
P4 = Price of cultivated land 0.12737 0.00857 14.86***
P5 = Price of pesticides 0.15331 0.00046 334.54***
P6 = price of capital 0.03586 0.07114 0.504
Allocative inefficiency
Q1 = Age of respondent -0.04612 0.01891 -2.44**
Q2 = Household size -0.11008 0.03672 -3.00***
Q3 = Experience -0.11942 0.06135 -1.95**
Q4 = Formal education (years) -0.02952 0.32283 -0.09
Q5 = Off-farm income (naira) 0.08012 0.05231 -1.53
Q6 = Sex -0.43938 0.48298 -0.91
Q7 = Marital status -0.02598 0.02980 0.87
Sigma squared () 0.80232 0.48056
Gamma () 0.7565 0.06701 11.29***
Log likelihood function -94.14
LR test 128.211***
Source: Field Survey data, 2021 ***, *; Significant at 1% and 10%, respectively

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Table 7: Efficiency distribution of respondents

Efficiency Technical Efficiency Allocative Efficiency Economic Efficiency
Frequency % Frequency % Frequency %
0.10-0.19 24 10.00 33 13.75 27 11.25
0.20-0.29 18 7.50 27 11.25 21 8.75
0.30-0.39 21 8.75 18 7.50 36 15.00
0.40-0.49 36 15.00 42 17.50 51 21.25
0.50-0.59 27 11.25 33 13.75 21 8.75
0.60-0.69 30 12.50 27 11.25 33 13.75
0.70-0.79 33 13.75 21 8.75 21 8.75
0.80-0.89 27 11.25 21 8.75 18 7.50
0.90-1.00 24 10.00 18 7.50 12 5.00
Min 0.07 0.04 0.02
Max 0.94 0.93 0.91
0.564 0.509 0.496
Mean
240 100.0 240 100.0
Total 240 100.0
Source: Field Survey Data, 2021

Table 8: Ways of Investment and Level of investment

Variables Frequency* Percentage (%) Av. Amount Invested
Way of investment
Buying Farm Equipment 94 39.17 72,944.22
Purchasing Supplies. 67 27.92 59,500.00
Covering Land Costs. 66 27.50 54,450.42
Refinancing An Older Income. 88 36.67 62,307.69
Marketing Campaigns & Advertising. 38 15.83 52,058.09
Making Land Improvements & Repairs 24 10.00 45,000.00
Investing in Growth 44 18.33 31,914.48
Covering Operating Costs 50 20.83 36,318.07
Rebuilding After Natural Disasters 30 12.50 11,944.44
Amount of income invested (N)’000
0 – 500000 89 178
500001 – 1000000 8 16
1000001 – 1500000 1 34
2000001 – 2500000 1 12
Mean 426,437.41
Total 240 100
Source: Field survey (2021) *multiple responses recorded

Table 9: Determinants of investment in Soybean Production

Variables Linear Exponential+ Double log Semi log
Intercept 562.276 0.006 -0.366 31318.640
(1.174) (1.697) * (13.187) *** (1.564)
X1 = Amount of Loan -524.538 11.819 -0.021 -4643.147
(-0.766) (54.456) *** (-.672) (-0.864)
X2= Return on Sales 0.366 2.419E-6 0.059 7910.278
(1.665) (1.861) * (1.178) (0.912)
X3 = Level of Education -280.255 -0.003 0.007 1949.461
(-0.507) (-0.786) (0.271) (0.413)
X4 = Experience 254.222 0.002 0.087 12213.319
(1.002) (1.193) (1.565) (1.278)
X5 = Farm Size 0.376 2.385E-6 0.375 59706.574
(0.1851) * (1.987) * (2.424) ** (2.233) **
X6 = Depreciation of farm equipment 1531.589 -0.010 -0.032 -4384.802
(-1.746) * (-1.923) * (-1.283) (-1.019)
X7 = Labour force 2717.241 0.018 0.075 11193.284
(1.140) (1.290) (1.173) (1.007)
R2 0.683 0.748 0.707 0.687
R-2 0.626 0.683 0.653 0.629
F-ratio 10.976*** 13.126*** 9.071*** 11.928***
Source: Field survey (2021) + lead equation, *** Significant at 1%, ** Significant at 5%,*significant at 10%. Figure in parenthesis are
t-ratio
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Table 10: Distribution of respondents based on sustainability level

Sustainability level Frequency Percentage Ranking Evaluation level
0.05 – 0.14 6 2.50 7th Poor
0.15 - 0.24 9 3.75 6th Poor
0.25 - 0.34 3 1.25 8th Poor
0.35 - 0.44 12 5.00 5th Poor
0.45 - 0.54 6 2.50 7th Poor
0.55 - 0.64 9 3.75 6th Poor
0.65 - 0.74 45 18.75 3rd Deficient
0.75 - 0.84 60 25.00 1st Regular
0.85 - 0.94 48 20.00 2nd Well
0.95 – 1.00 42 17.50 4th Very well
Mean 0.744
Total 240 100.00
Source: Field Survey Data, 2020

Table 11: Problems associated with credit access and utilization

Challenges Factor Factor Factor Factor Factor Factor Factor
1 2 3 4 5 6 7
Z1 = High cost of fertilizer 0.363 0.239 0.294 -0.237 0.251 0.369 0.348
Z2 = High cost of seed 0.601* 0.495 0.03 -0.269 0.257 -0.102 -0.126
Z3 = High cost of
-0.4 0.142 -0.12 0.112 0.408 -0.244 -0.556*
agrochemicals
Z4 = Unavailability of labour 0.598* 0.511* 0.109 -0.321 0.203 -0.157 0.053
Z5 = Very small output 0.617* 0.357 0.204 -0.112 -0.123 -0.456 -0.119
Z6 = Low quality of soybean
0.365 0.328 -0.572 0.101 0.12 0.283 0.048
harvested
Z7 = Very far farm distance 0.698* 0.201 -0.3 0.207 -0.406 -0.012 0.032
Z8 = High cost of
0.029 -0.069 -0.429 0.487 -0.376 0.225 -0.102
Transportation
Z9 = Seasonal price variation 0.688* 0.404 -0.218 0.052 0.069 0.151 0.028
Z10 = Bad road network -0.096 0.291 -0.333 0.037 0.507* 0.472 -0.327
Z11 = Perishability of the
0.653* 0.299 -0.152 0.226 -0.334 -0.083 -0.104
product
Z12 = Poor storage facilities -0.342 0.443 -0.171 0.02 0.041 -0.353 0.227
Z13 = Bulkiness of the goods -0.578* 0.583* -0.096 0.095 -0.053 0.007 0.148
Z14 = Poor pricing 0.143 -0.154 -0.035 0.491 0.391 -0.097 0.531*
Z15 = Pest and diseases -0.641* 0.613* -0.097 0.068 -0.068 -0.077 0.238
Z16 = Scarcity of farm land -0.601* 0.544* -0.099 -0.143 -0.106 0.138 0.207
Z17 = Instability in government
0.075 0.222 0.446 0.575* 0.041 -0.02 -0.074
policy
Z18 = Lack of technical
-0.214 0.462 0.578* 0.059 -0.283 0.355 -0.254
knowledge
Z19 = Lack of collateral
0.343 -0.05 0.601* 0.173 0.003 0.33 0.084
required
Z20 = Poor extension contact -0.343 0.637* 0.255 0.271 -0.08 -0.078 -0.105
Z21 = Barrier to adoption of
0.187 -0.05 0.137 0.691* 0.374 -0.177 -0.01
techniques
Source: Field survey, 2021 * factor reach cut off point for factor loadings/Eigen

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 International Journal of Applied Research and Technology 44
Table 12: Total variance explained on problems associated with credit access
Component Initial Eigenvalues Extraction Sums of Squared Loadings
Total % of Variance Cumulative % Total % of Variance Cumulative %
Z1 = High cost of fertilizer 4.485 21.355 21.355 4.485 21.355 21.355
Z2 = High cost of seed 3.108 14.798 36.153 3.108 14.798 36.153
Z3 = High cost of agrochemicals 1.976 9.409 45.562 1.976 9.409 45.562
Z4 = Unavailability of labour 1.792 8.533 54.095 1.792 8.533 54.095
Z5 = Very small output 1.447 6.888 60.983 1.447 6.888 60.983
Z6 = Low quality of soybean 1.254 5.970 66.954 1.254 5.970 66.954
Z7 = Very far farm distance 1.139 5.425 72.378 1.139 5.425 72.378
Z8 = Transportation 0.892 4.249 76.627
Z9 = Seasonal price variation 0.807 3.844 80.470
Z10 = Bad road network 0.730 3.474 83.944
Z11 = Perishability 0.613 2.918 86.862
Z12 = Poor storage facilities 0.518 2.465 89.327
Z13 = Bulkiness of the goods 0.401 1.912 91.239
Z14 = Poor pricing 0.352 1.677 92.916
Z15 = Pest and diseases 0.332 1.580 94.496
Z16 = Scarcity of farm land 0.277 1.319 95.815
Z17 = Government policy 0.265 1.260 97.074
Z18 = technical knowledge 0.205 0.977 98.051
Z19 = Lack of collateral required 0.153 0.726 98.777
Z20 = Poor extension contact 0.134 0.639 99.416
Z21 = adoption of techniques 0.123 0.584 100.000
Extraction Method: Principal Component Analysis.

Table 13: Communalities Scores on problems associated with credit access

Problems Initial Extraction
Z1 = High cost of fertilizer 1.000 0.652
Z2 = High cost of seed 1.000 0.771
Z3 = High cost of agrochemicals 1.000 0.742
Z4 = Unavailability of labour 1.000 0.802
Z5 = Very small output 1.000 0.799
Z6 = Low quality of soybean harvested 1.000 0.674
Z7 = Very far farm distance 1.000 0.827
Z8 = High cost of Transportation 1.000 0.630
Z9 = Seasonal price variation 1.000 0.715
Z10 = Bad road network 1.000 0.793
Z11 = Perishability of the product 1.000 0.719
Z12 = Poor storage facilities 1.000 0.520
Z13 = Bulkiness of the goods 1.000 0.717
Z14 = Poor pricing 1.000 0.731
Z15 = Pest and diseases 1.000 0.868
Z16 = Scarcity of farm land 1.000 0.760
Z17 = Instability in government policy 1.000 0.592
Z18 = Lack of technical knowledge 1.000 0.868
Z19 = Lack of collateral required 1.000 0.627
Z20 = Poor extension contact 1.000 0.686
Z21 = Barrier to adoption of techniques 1.000 0.705
Extraction Method: Principal Component Analysis.

Samuel and Idris (2021).