COMPARATIVE COST - BENEFIT ANALYSIS OF FRESH AND SEED OKRO PRODUCTION AT KPANDO IN THE VOLTA REGION BY SAMUEL SAKYI OWUSU THIS DISSERTATION IS SUBMITTED TO THE UNIVERSITY OF GHANA, LEGON IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF MASTER OF ARTS DEGREE IN AGRICULTURAL ADMINISTRATION DEPARTMENT OF AGRICULTURAL ECONOMICS AND AGRIBUSINESS, UNIVERSITY OF GHANA, LEGON DECEMBER 2002 University of Ghana http://ugspace.ug.edu.gh 35 /,as © o f c . / _G3 74941 University of Ghana http://ugspace.ug.edu.gh I, SAMUEL SAKYI OWUSU, author o f this dissertation “COMPARATIVE COST - BENEFIT ANALYSIS OF FRESH AND SEED OKRO PRODUCTION AT KPANDO IN THE VOLTA REGION”, do hereby declare that, with the exception o f ideas and quotations which have been duly acknowledged, the work presented in this dissertation was done entirely by me in the Department o f Agricultural Economics and Agribusiness, University o f Ghana, Legon, from September 2001 to December 2002. This work has never been presented either in whole or in part for any other degree in this University or elsewhere. DECLARATION SAMUEL SAKYI OWUSU (STUDENT) This dissertation has been submitted for examination with my approval as supervisor. MR D. P. K. AMEGASHIE (SUPERVISOR) University of Ghana http://ugspace.ug.edu.gh DEDICATION TO THE OWUSU FAMILY University of Ghana http://ugspace.ug.edu.gh I am greatly indebted to my supervisor Mr. D. P. K. Amegashie for his guidance, patience, encouragement, constructive criticisms, and suggestions. I also w ish to express my heartfelt appreciation to Mr. A. Mensah-Bonsu who started the work with me but had to leave for a programme outside the country. I am grateful to Mr. Emmanuel Adika and Mr. Ibrahim Addy o f the Agricultural Economics Library and Faculty o f Agriculture Library respectively for helping me assess information from the library. To my colleagues (MA / M. Phil. Agricultural Administration Class o f 2001 / 2002), thanks for your encouragement and concern. God richly bless you all. I apologize to all those who in diverse ways have contributed to this work but whose names have not been mentioned and to them 1 say, thank you. ACKNOWLEDGEMENT Samuel Sakyi Owusu December 2002 University of Ghana http://ugspace.ug.edu.gh ABSTRACT Okro is an important crop in the diet o f many Ghanaians and the economy o f Ghana. Fresh okro contains some amount o f protein, carbohydrates, vitamins A and C w ith traces o f B vitamins, as well as calcium phosphorus and iron. The problems o f removal o f subsidies on agricultural inputs, poor market price o f fresh okro, and nematode problem had resulted in low net income from fresh okro enterprise. Although Ghana has a high potential o f producing both fresh and seed okro, most farmers are currently in the production o f fresh okro. Farmers take into consideration the relative profitability o f alternative enterprises open to them before selecting those to invest in. This present study compares the costs and benefits as well as the profitability o f fresh and seed okro production. Data were collected through the use o f structured questionnaires administered to ninety farmers. The profitability o f the enterprises were compared, using net income, benefit-cost ratio, and return on sale concepts. Sensitivity analysis was carried out to take care o f risk and uncertainties on the conclusions drawn on the acceptability o f the enterprises. The study revealed that fresh production cost lesser than seed okro production per unit. Although both fresh and seed okro production are profitable, seed okro production is more profitable than fresh okro in the rainy season. Dry season fresh okro fruits production reaps higher returns than rainy season fresh okro fruits production. Major constraints in okro production are attributed to increasing pests and diseases, high cost o f agro-chemical and poor market price. In the light o f the above find ings o f the present study, it was recommended that extension education be intensified eradicate the major constraints to okro production so as to increase the net income. University of Ghana http://ugspace.ug.edu.gh Page DECLARATION i DEDICATION ii ACKNOWLEDGEMENT iii ABSTRACT iv LIST OF TABLES AND FIGURES vi LIST OF ABBREVIATIONS vii CHAPTER 1. INTRODUCTION 1.1 Background 1 1.2 Problem Statement 2 1.3 Objectives o f the Study 3 1.4 Justification o f the Study 3 1.5 Scope and Limitation o f the Study 5 1.6 Organization o f the Study 6 2. LITERATURE REVIEW 2.1 Introduction 7 2.2 Fresh and Seed Okro Production 7 2.3 Importance o f Fresh and Seed Okro 9 2.4 Performance Indicators For Farm Production 10 2.4.1 Concept o f Farm Budgeting 11 2.4.2 Concept o f Depreciation 12 2.4.3 Cost o f Production and Return on Sale 14 2.4.4 Benefit-Cost Ratio 14 2.5 Changes in Key Variables on Crop Profitability 15 2.6 Crop Profitability 17 3. METHODOLOGY 3.1 Theoretical Framework 19 3.2 Identification o f Variables 20 3.3 Method o f Data Analysis 20 3.4 Comparing Profitability Estimates 24 3.4.1 Net Income 24 3.4.2 Benefit-Cost Ratio 25 3.4.3 Return on Sale 26 3.5 Sensitivity Analysis 26 TABLE OF CONTENTS v University of Ghana http://ugspace.ug.edu.gh 3.6 Statistical Test 27 3.6.1 Measures o f Variability 27 3.6.2 Test o f Hypothesis 28 3.7 Data Sources 30 3.8 The Survey 30 4. RESULTS AND DISCUSSIONS 4.1 Introduction 31 4.2 Fixed Cost Estimates 31 4.3 Variable Cost Estimates 33 4.4 Total Cost Estimates 35 4.5 Total Revenue Estimates o f Okro Production 36 4.6 Net Revenue Estimates o f Okro Production 38 4.7 Benefit-Cost Ratio 39 4.7.1 Discounted Cash Flow 39 4.8 Return on Sale 41 4.9 Sensitivity Analysis 42 4.10 Constraints to Okro Production 46 4.10.1 Disease and Pest Problems 47 4.10.2 High Cost o f Agro-chemicals 47 4.10.3 Poor Market Price 48 4.11 Suggested Strategies for Solving the Problems 48 5. SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS 5.1 Summary 50 5.2 Conclusions 51 5.3 Recommendations 51 REFERENCES 53 APPENDICES 57 vi University of Ghana http://ugspace.ug.edu.gh Tables Table 1.1 Table 4.1 Table 4.2 Table 4.3 Table 4.4 Table 4.5 Table 4.6 Table 4.7 Table 4.8 Table 4.9 Table 4.10 Table 4.11 Table 4.12 Figures Figure 1. Page Proximate Composition o f Okro Seed 10 Fixed Cost Estimates per Hectare o f Fresh and Seed Okro Production 33 Variable Cost Estimates per Hectare o f Fresh and Seed Okro Production 34 Total Cost Estimates per Hectare o f Fresh and Seed Okro Production 36 Total Revenue Estimates per Hectare o f Fresh and Seed Okro Production 36 Financial Cash Flow 39 Benefit-Cost Ratio o f Fresh and Seed Okro Production 41 Summary o f Enterprise Return on Sale 42 Sensitivity Analysis at a 10% Increase in Costs 44 Sensitivity Analysis at a 10% Reduction in Benefits 44 Sensitivity Analysis at a 50% Increase in Discount Factor 44 Sensitivity Analysis at a 10% Increase in Costs, 10% Reduction in Benefits, and 50% Increase in Discount Factor Simultaneously 45 Enterprise Benefit-Cost Ratios 46 Constraints to Okro Production 46 LIST OF TABLES AND FIGURES vii University of Ghana http://ugspace.ug.edu.gh LIST OF ABBREVIATIONS MOFA Ministry o f Food and Agriculture > Greater than = Equals sp Species Z Summation N.P.K. Nitrogen, Phosphorus, and Potassium DF Discount factor Ben. Benefit Red. Reduction Std. Dev. Standard deviation C Var. Coefficient o f variation viii University of Ghana http://ugspace.ug.edu.gh CHAPTER ONE INTRODUCTION 1.1 Background Okro (.Abelmoschus esculentus, (L) Moench), originated from Tropical Africa and was taken to other parts o f the world by the Portuguese (Purseglove, 1986; Sinnadurai, 1992). It belongs to the Malvaceae family. The Americans call the crop okra, and is called ladies finger by the British (Sinnadurai, 1992). In Ghana okro is one of the most widely grown vegetables. The crop grows well throughout the year in West Africa, producing good yields if the soil is fertile and there is sufficient moisture in the soil (Thompson and Kelly, 1957). It is a very important crop in the diet o f many Ghanaians and hence its importance in the economy o f Ghana. Nutritionally both the leaf and fruits are eaten as vegetables. The leaves are used as spinach. Fresh okro is used in the preparation o f stew and soup in Ghana and throughout West Africa. The fresh fruits contain some amount o f protein, carbohydrates, vitamins A and C with traces of B vitamins. It is also a good source o f calcium, phosphorus and iron. Roasted and ground seeds are used in cooking and for edible oil extraction (Martin and Roberte, 1978). In Ghana, almost every agricultural commodity has become a potential export crop because of the effort to narrow the gap between the traditional export crops like cocoa and coffee, and food crops (MOFA, 1990). Government effort to promote non-traditional exports started as far back as 1960 (Dzokoto, 1990). Recent decline in world price o f traditional crops has made the government to encourage farmers to diversify into the production o f non-traditional crops like okro, pineapple, pawpaw, and mango, among others. 1 University of Ghana http://ugspace.ug.edu.gh 1.2 Problem Statement The construction o f the hydroelectric dam at Akosombo affected the people of Kpando. Their standard of living reduced due to destruction o f their farms, and other dam-induced losses. The Kpando Irrigation project was therefore initiated to assist farmers who had suffered dam-induced losses during the construction o f the dam to earn extra income. Okro is one of the crops cultivated in the area. High quality seeds are needed for the cultivation o f okro so as to obtain high yield o f okro fruits. Sometimes, seed required for planting is obtained from the previous harvest, a practice that is generally unacceptable since it generates into impure seeds with reduced quality as compared with the original seeds. The output or yield o f okro is affected by the quality o f seeds used during planting. Poor quality seed used as a planting material will give rise to poor yield, and a good quality seed is likely to give rise to a good crop yield. A good quality seed is therefore needed for achieving a high yield of both fresh and seed okro. A good quality seed is one that has high viability (usually 85% and above), high vigour, free from seed borne diseases and free from noxious weed seeds (Dzietror, 1995). Although Ghana has a high potential o f producing both fresh okro fruits and seed okro, in the rainy and dry seasons, most farmers are currently in the production o f fresh fruits. During the period o f glut for the fresh fruits, a farmer decides whether to sell at a reduced price or keep the fruits for seeds. Relevant data and analysis is needed before an investment decision could be made on the better alternative, that is, the production o f fresh fruits or seed. The cost of project inputs keeps rising as a result of the macro-economic policy o f removal of subsidies on agricultural inputs, coupled with the falling value o f the cedi against the major currencies, such as the dollar and pound. With the problems o f removal o f subsidies on agricultural inputs, reduced area o f production, declining yields, poor 2 University of Ghana http://ugspace.ug.edu.gh market prices, pests and diseases, the present study addresses the following pertinent questions, in an attempt to identify the two options and compare their costs and benefits: 1. What are the costs o f fresh and seed okro production? 2. What are the benefits o f fresh and seed okro production? 3. How profitable is it to produce fresh and seed okro? 4. What factors militate against the production o f fresh and seed okro? 1.3 Objectives of the Study The general objective of the study is to compare the costs and benefits o f fresh and seed okro production at Kpando in the Volta Region o f Ghana. The specific objectives addressed by the present study in order to achieve the general objective are: 1. To estimate the costs and returns o f fresh and seed okro production. 2. To assess the relative profitability o f fresh and seed okro production. 3. To identify the constraints militating against the production o f fresh and seed okro. 1.4 Justification of the Study Kpando district has been identified as a potential vegetable production area in the Volta Region that can be developed to increase supply o f fresh okro to both domestic and export markets. Propagation o f okro is by seed, and the supply o f high viable seed for planting needs to be increased. High viable seeds are seeds with a germination percentage greater than 80%. Although Ghana has a high potential o f producing both 3 University of Ghana http://ugspace.ug.edu.gh fresh okro fruits and high viable okro seeds (Dzietror, 1995, Owusu, 1999), a greater quantity o f high viable okro seed is imported. Investment in fresh okro fruits as well as seed okro production is therefore worth investigating. The study will offer reliable information on the profitability o f fresh and seed okro production to small-scale farmers. The determinants o f crop profitability are yield of crop, price per unit o f output, variable costs, labour and machinery cost (Bernard, 1990). Introduction o f a new technology, variable cost reduction, and increasing price per unit of output are among the interventions geared towards increases in crop profitability. Investment in fresh and seed okro production is a matter o f choice. Farm investment analysis should confirm that adoption o f a new technology will really be financially worthwhile, for farmers can respond to financial incentives only when it is truly remunerative for them to do so. The present study will also provide reliable information needed for farm planning by the small-scale risk-preferred, risk-neutral, and risk-averse okro farmer. Farmers live in a particular cultural and risk environment. Although a risk-neutral okro farmer could use only the profitability figures for farm planning, a risk-averse okro farmer will have to know the risk level associated with the investment before making a decision on the line o f action to take. There is little study done on the performance of okro production at Kpando. It is hoped that, this work will help to bridge the gap in research and also serve as a data source for interested investors and a database for policy formulation and implementation at Kpando, and Ghana as a whole. 4 University of Ghana http://ugspace.ug.edu.gh 1.5 Scope and Limitation of the Study This current study considered the cost and benefit of fresh and seed okro production for a year. Data for the major season as well as the minor season were used for the 2001 production year. The geographical area o f this study is the Kpando district in the Volta Region of Ghana. The district is one o f the administrative districts in the Volta Region. Kpando and Hohoe lie adjacent to each other in the middle o f the region. The district, lies within the transitional zone o f the country. The transitional zone experiences average annual rainfall of 1200 mm to 1300 mm. Although crops grown in the area includes okro, garden eggs, tomatoes, maize and cowpea in rainy season cultivation, okro production has assumed a greater prominence under the irrigation scheme and has become a major income earner for the farmers in dry season cultivation. Economic activities undertaken in the study area include farming, marketing, and processing. The main food crops grown are cassava, maize and yam. The main items processed are cassava, which is processed into gari. Palm fruit is also processed into palm oil locally called “dzomi”. For marketing, the main items traded are yam, dzomi, gari, beans, groundnuts, water yam, tomatoes, pepper, garden eggs and okro. The quantitative data obtained from farmers were mere approximations often recalled from memory. This is because most of the farmers hardly kept records on the exact quantities of inputs used and output realised. However, the combined use of questionnaire information, personal interviews, and observations where necessary 5 University of Ghana http://ugspace.ug.edu.gh were made to ensure least distortions in information gathered. Limit o f time made it impossible to investigate the enterprise over a longer period o f time. Another limiting factor o f the study is that, the resources available to each farmer differ both in quantity and quality. The managerial potential and objectives also differed. For fear of being asked to pay taxes, some farmers are reluctant to disclose information on their income, payment of social security and other financial obligations as well as production data. 1.6 Organisation of the Study The report of the present study is divided into five chapters. Chapter one above is the introductory chapter. It gives the background information, problem statement, objectives and relevance or justification of the research undertaken. Chapter two provides a summary o f the pertinent literature as related to the research topic. In Chapter three, the methodology and analytical concepts o f the study are outlined. Results of the study and discussion o f the results are presented in Chapter four. This is followed by the conclusions and recommendations, which are presented in Chapter five. 6 University of Ghana http://ugspace.ug.edu.gh CHAPTER TWO LITERATURE REVIEW 2.1 Introduction This chapter reviews literature relating to fresh and seed okro production, importance o f fresh and seed okro, and performance indicators o f an enterprise. It also reviews methods, which have been used by previous researchers to compare the profitability of two or more farm production enterprises. 2.2 Fresh and Seed Okro Production Major areas o f okro cultivation include the Northern Savanna Zones (Northern, Upper East and Upper West Regions), Transitional and Coastal Savanna Zones (Brong Ahafo, Greater Accra, and Volta Regions). A thorough land preparation is necessary for okro establishment. It grows best in a sandy loam soil into which well-rotted compost has been incorporated. Early ploughing followed by harrowing twice at two weeks interval is ideal for uniform land preparation. This allows for uniform germination and subsequent destruction o f weed seeds before planting (Irvine, 1969; Rice, Rice and Tindall 1986; Sinnadurai, 1992). Armah-Agyemang (1990) reported that, the ideal time to plant okro in the tropics is after March during the rainy season. Dry season planting is done between November and December. Under irrigation, planting is done at any time of the year. Propagation o f okro is by seed. Seeds are soaked in water for twenty-four hours prior to sowing to increase the rate o f germination and germination percentage (Adjei-Twum, 1962). 7 University of Ghana http://ugspace.ug.edu.gh Physiological maturity in okro is about 14 days after which ripening o f the fruit begins. Seed development in okro reduces the growth and yield o f the plant. (Ewete, Taylor and Cheda 1980). There is sequential ripening o f okro fruits on the plant in most of the cultivars. Further ripening after maturity consists mainly o f desiccation with little transfer o f nutrient into the seed. Maturity o f the fruit is associated with the fruit becoming grey or brown depending on variety (Kohle and Chavan, 1969; Herklots, 1972; George, 1985; Anoglo, 1990). The matured seed vary in colour from dark green to black. Okro is picked when it is matured. Fruit and seed maturity in okro differs among the varieties. Fruits are picked when they are still young and tender, and eaten as vegetable. Fruit readily snaps at this stage (Sinnadurai, 1992). It is useless to pick over matured fruits, because consumers reject such fruits. These fruits can be left on the plant for seeds (Purseglove, 1974; Tindall, 1983). Delaying picking until seed is matured and dried might result in yield losses due to lodging and shattering. Seed is extracted when fruit becomes dry and brittle. Seed yield o f 1500 kilogrammes per hectare has been reported in the United States o f America. The yield o f okro seed of different varieties is estimated to range from 900 - 1200 kg/ ha (Herklots, 1972). Although the seed of okro are comparatively short lived, Martin et al (1981) showed that low temperature (5 °C) and low moisture content permitted conservation for 11 years. Seeds left in the fruit for storage should be dusted with an insecticide to prevent weevil infestation (Norman, 1992). Seeds begin to deteriorate shortly after they reach physiological maturity in the field (Chauchan and Bhanderi 1971; Ellis and Roberts, 1980). The rate o f deterioration is positively related to temperature and moisture content at least to a critical moisture content (Ibrahim and Roberts, 1983). 8 University of Ghana http://ugspace.ug.edu.gh Deterioration leads to death o f the seed. Ellis and Roberts (1982) reported that many sub-cellular changes occur while seed deteriorates and this results in slower germination and poor vigour, which could affect crop yield. Increase in temperature within certain limits will increase the rate o f respiration, which produces heat. Okro seed is a bad conductor o f heat due to its hard seed coat (Christensen, 1974). If this heat generated is not conducted away, condensation takes place, which can lead to loss in seed viability (Salunkhe, 1986). Kozlowski (1972) reported that seeds showing marked reduction in non-soluble carbohydrate and protein germinate poorly. The most common and dangerous pest o f okro is the flea beetle, Fruitagrica sjostedti, followed by aphids, cotton stainers and caterpillars. Aphids and cotton stainers suck sap from shoots causing stunted or abnormal growth. Caterpillars damage flower buds and young fruits, which drop prematurely. Seed bugs, Oxycarenus spp, is also a major pest, which feed on developing fruits. Fruit yield and seed viability can be severely reduced as a result o f feeding o f these seed bugs. Diseases o f okro include fusarium wilt, fruit spot, root rot, and stem rot. Others include powdery mildew and cercospora leafspot (Charles and Sherf, 1960; Hill and Waller, 1988). 2 3 Importance of Fresh and Seed Okro Leaf of okro is used as spinach or fodder for goat. Fresh fruit o f okro is used in the preparation of stew and soup in Ghana and throughout West Africa. Fresh fruits contain some amount o f protein, carbohydrates, vitamins A and C with traces o f B vitamins. It is also a good source o f calcium, phosphorus and iron. Roasted and ground seeds are used in cooking and for edible oil extraction (Ramadan, Khalifa and 9 University of Ghana http://ugspace.ug.edu.gh Aboul-Nasr, 1997). Seeds contain other components in addition to oil, as shown in Table 1.1 below. Table 1.1 Proximate Composition o f Okro Seeds. Moisture (%) Protein (%) Oil (%) Ash (%) Crude (%) Carbohydrate (%) 9.77 23.56 21.29 4.46 16.66 24.26 Source: Berry et al, 1988. In Ghana, almost every agricultural commodity has become a potential export crop because of the effort to narrow the gap between the traditional export crops like cocoa and coffee, and food crops. Okro is one o f the non-traditional export crops being promoted in Ghana to generate more foreign exchange revenue. 2.4 Performance Indicators For Farm Production Investment appraisal has many dimensions. These are technical, financial, economic and social appraisal. The basic aim o f technical appraisal is to find out whether the physical inputs available can be effectively combined to produce the desired outputs in a given environment. Data for technical appraisal is from various technical groups o f specialists such as agricultural engineering, soil science and agronomy. The basic aim of financial appraisal is to find out whether the industry or project is financially viable, to ensure the availability of funds necessary for project implementation, and its subsequent operation and maintenance. The appraisal is carried out using discounted and undiscounted methods. Four discounted measures available for use are the net Present Value (NPV), Internal Rate o f Return (IRR), Benefit-Cost Ratio (B/C), and Net Benefit Investment ratio (N/K). Undiscounted methods, also known as traditional investment appraisal techniques, include Simple Rate of Return and the Payback 10 University of Ghana http://ugspace.ug.edu.gh Period. Financial ratios that can be used to judge profitability include return on sales, return on equity, and return on assets (Bernard, 1990). 2.4.1 Concept of Farm Budgeting Farm budgeting is a way to estimate the profitability o f a plan, or a proposed change in a plan, before making a decision and implementing it. Examples include enterprise budgeting, partial budgeting and whole farm budgeting. Whole farm budgets are used to derive performance standards. Farm budgeting is a standard farm management technique, which was introduced in the 1960s. Researchers however shifted from whole farm budgeting to enterprise budgeting except in areas where there was intensive intercropping (Carl and Doyce, 1982). Bernard (1990) defined an enterprise as a well-defined production unit, which differs from other production units either by the level o f returns to fixed resources or by the end product. The base unit for a n . enterprise budget is typically one acre for crops and one head for livestock. Using these common units permits an easy and fair comparison across different enterprises. The primary purpose o f an enterprise budget is to estimate costs, returns, and profit or net income per acre or per head for the enterprise. A prominent problem in the use o f budgets in analysis is the valuation o f inputs and outputs. Small-scale farmers generally purchase few inputs and retain a major portion o f farm output for family consumption. The value researchers assign to inputs and outputs become subjective. Another problem is the valuation o f family labour in the construction of farm and enterprise budgets. Despite the stress on data and problem of valuation, farm budgeting is a valuable tool o f analysis (Ruthenberg, 1980). Budgeting is found to be invaluable in farm survey research because they could be 11 University of Ghana http://ugspace.ug.edu.gh constructed relatively quickly and the training requirement for building and interpreting budgets are fairly easy relative to programming and regression methods. 2.4.2 Concept of Depreciation Depreciation is the slowly using up or loss in value o f an asset due to age and use o f the asset. Depreciation is also defined as the estimated outlay in current prices, which will be required if fanners were to replace the plant and equipment used up during the year (USDA, 1975). Used depreciation is a function o f time while time depreciation is the result of obsolescence and occurs regardless of the use o f the machine. Obsolescence is the loss in value o f the asset as a result o f technological improvements resulting in the production o f better machines. Fixed costs comprise cost of inputs that do not vary with the level o f output or production in the short run that is period o f time in which one or more o f the inputs do not change. Fixed cost is also known as common cost. Examples o f fixed cost items include administrative and office expenses such as accountancy fees, telephone bills and post bills; general overheads such as car expenses, road and other rates, licenses, and general insurance; cost o f owning fixed assets like machines and building such as depreciation (Johnson, 1990). The three main causes o f depreciation are wear and tear with use, obsolescence, and gradual deterioration with age. Wear and tear is the loss o f value caused by ordinary use as distinct from damage resulting from carelessness or accidents. Ovenden (1961) suggested that under inflationary conditions the calculation o f depreciation should be ideally based on current prices of the items. Ways of estimating depreciation o f farm assets include the following: 12 University of Ghana http://ugspace.ug.edu.gh i. Straight-line method or fixed instalment method. ii. Reducing or diminishing balance method. iii. Sum of year’s digit method. iv. Annual revaluation method The straight-line method is the simplest. This method assumes that assets will depreciate evenly throughout its lifespan. It is expressed as: Depreciation = (Purchase price - sal vage value) / lifespan o f asset. 2.43 Cost of Production and Return on Sale This is a term used to describe the average cost o f producing one unit o f a commodity. Cost o f production is estimated as: Cost o f production = Total cost / Area under cultivation Cost o f production is a useful concept particularly when marketing the product. Any time the product can be sold for more than its cost o f production, a profit is being made. Return on sales show how large an operating margin the enterprise has on its sales. This is determined by dividing the net income by the revenue. The lower the return on sales, the greater the sales that must be made to make an adequate return on investment. High return on sales o f an enterprise indicates larger operating margin of the enterprise per unit of sales, and therefore the more attractive the investment. 13 University of Ghana http://ugspace.ug.edu.gh 2.4.4 Benefit-Cost Ratio Benefit-cost ratio is a profitability indicator, which expresses the relationship between the sum of net benefits and capital costs over the life of a project. If the ratio is greater than one, it implies that the farmer benefits from the farm enterprise. If the ratio is less than one, it implies that the farmer is not benefiting from the farm enterprise. If the ratio is equal to one, it implies that the farmer is at break-even point, where he neither gains nor loses. Various researchers to determine profitability had used the ratio. Asare (2000) used the ratio in his research work, “Cost-Benefit Analysis o f Citrus Production in the Eastern Region of Ghana”, and had a benefit-cost ratio o f 1.48. This ratio is greater than one and implies that citrus production is profitable. Amoako (1997) and Ofori (1997) also used the ratio in their research work and had a benefit- cost ratio of 1.85 and 1.68 respectively. These ratios are also greater than one and imply that the project is profitable. 2.5 Changes in Key Variables on Crop Profitability The manager’s job is to make decisions in an environment o f risk and uncertainty. Risk refers to a situation where the exact outcome is not known, but the probabilities associated with the possible outcomes, estimated objectively with data are known. Uncertainty refers to situations where the probabilities of the outcome are not known but estimated subjectively. Production of agricultural commodities depend to a large extent on some prevailing natural conditions like temperature, rainfall and humidity in a developing country like Ghana. Most Ghanaian okro farmers rely solely on the weather for production. An adverse condition like an outbreak o f disease, reduction in the total amount o f rainfall will reduce the yield o f the crop and consequently reduce gross revenue that will be derived from the production of okro. Farm investment, such 14 University of Ghana http://ugspace.ug.edu.gh as growing of crops may result in a range o f possible yield, net returns, and gross returns. Drought, pest and diseases, price uncertainty and yield influence the outcomes. Any expected increase in income from farming, therefore, entails some risks. Depending on the risk attitude o f the individual farmer, a farmer is either risk- averse, risk-neutral, or risk-preferrer. A risk-averse farmer is one who is a caution individual with preference for less risky sources o f income. A risk-neutral individual makes his decisions without regard to the risks involved. Risk-preferrers, on the other hand tend to be adventuresome with their liking for risky farm ventures and investment. There are various methods for assessing risk at the farm level. These include the range, expected value, coefficient o f variation, maximin approach and sensitivity analysis. The range is a measure of variability and is the difference between the highest possible net returns or yields and the lowest possible net returns from the production of okro. A high value implies that the outcome can vary widely. A risk-averse okro farmer may prefer strategies with lower range. The expected value is found by summing the products of each possible outcome times the probability as follows: IR j = ZiPiR], where IR j is the expected value, Pi is the probability of each net return and R( is the net returns. The probabilities associated with each net returns can be established by farmers based on subjective judgement or from historical frequencies over a period of time. Probabilities used in risk analysis must all be non-negative (Pi 2 0) and must sum up to one (X,P, = 1). An expected 15 University of Ghana http://ugspace.ug.edu.gh value o f X cedis in terms o f net returns, implies that on the average, the net returns of okro production is X cedis per hectare. The risk-averse farmer prefers high expected value in terms o f net returns. The coefficient o f variation is the standard deviation divided by the expected value. If the coefficient o f variation o f a net return o f fresh okro production is 0.13 and that of seed okro production is 0.25, then it implies that it is riskier to produce seed okro than fresh okro in terms of net returns variability. The maximin approach is a method that examines different strategies for only the worst possible outcomes such as the worst profit or net returns in severe drought years. The farm strategy that gives the best result in the worst years is chosen farmer who is assumed to be risk-averse. Sensitivity analysis is a modelling and risk assessment procedure in which changes are made to significant variables in order to determine the effect o f these changes on the planned outcome. This analysis is usually applied to one estimate at a time although it can be applied to each estimate simultaneously. 2.6 Crop Profitability The determinants of crop profitability are yield o f crop, price per unit o f output, variable costs, labour and machinery costs. A rewarding way to increase crop profitability is to increase crop yield. The yield o f a crop depends on planting o f quality seeds, planting of crop at the right time, application o f the correct quantities of fertilizer and insecticides, control o f weeds on time and the technique employed in 16 University of Ghana http://ugspace.ug.edu.gh harvesting o f the produce among others. High crop yield will increase crop profitability when the price o f the product is not reduced significantly (Bernard, 1990). Introducing a new technique of production, such as introducing irrigation, using a different type of chemical control and using a new seed variety for planting could lead to an increase in crop profitability. The marginal revenue in this case should be high enough to cover the marginal cost. Crop rotation and timeliness o f operations are also relevant factors to consider in any intervention to increase crop profitability. Crop rotation is the growing o f crop in a sequence on the same piece o f land. It maintains soil fertility and increases yield o f crops. Obtaining a higher price for the output and reducing variable cost o f production are also vital way for increasing the profitability o f crops. Higher price o f output could be achieved by improving time o f marketing and quality o f produce (Bernard, 1990). Opportunities existing for variable cost reduction include, soil analysis in order to avoid wasting fertilizer. Although there is cost associated with soil analysis, the overall effect per hectare is low as compared to the wastage o f fertilizer per hectare. Economising in the use o f fertilizer by placement rather than broadcasting is also a way to avoid wasting fertilizer in the cultivation o f okro in order to reduce variable cost of production. Timely cultivation of the crop to avoid the cost o f weedkillers is also necessary to reduce variable cost o f production. Timely cultivation will also reduce competition o f the crop with weedkillers. Yield o f crop is then increased and profitability is increased when the marginal revenue in this case is high enough to cover the marginal cost. 17 University of Ghana http://ugspace.ug.edu.gh Profitability of a farm enterprise may be raised, by increasing the total gross margin of the farm. Total gross margin of a farm is increased when the gross margins of existing enterprises are increased. It could be also be increased by substituting one or more enterprises for one or more others, or expanding an existing enterprise or reducing a new one without reducing other enterprises. The change will increase crop profitability only if the fixed cost is not raised significantly (Bernard, 1990; Johnson, 1990). 18 University of Ghana http://ugspace.ug.edu.gh CHAPTER THREE METHODOLOGY 3.1 Theoretical Framework Financial analysis is aimed at determining the project’s financial profitability on the basis o f actual or market prices and is the approach followed in the present study to compare the profitability o f fresh and seed okro production. Profitability can be measured in absolute terms or in ratio (Londurback and Dominic, 1982). Net income or profit is an absolute measure o f profitability and is given by the difference between gross farm income and total farm expenses (Dillion and Herdaker, 1993). A positive net income of an enterprise implies the production process is profitable and a negative net income implies the production process is not profitable. Ratios measuring profitability include the benefit-cost ratio and return on sales. The benefit-cost ratio is obtained by dividing the present worth o f benefit stream by the present worth o f cost stream. The selection criteria is to accept all projects with a ratio o f one or greater than one, and reject all projects with a ratio less than one. According to Gittinger (1982), return on sales, is one o f the important ratios that can be used as a measure of profitability. Return on sales shows the magnitude o f the operating margin o f an enterprise per unit o f sales. High return on sales implies high operating margin, and high profitability o f the enterprise. The lower the return on sales the lower the operating margin and the lower the profitability o f the enterprise. This ratio is most useful when comparing industries or enterprises in the same sector, and when analysing results o f past operations and comparing projection for future expansion. 19 University of Ghana http://ugspace.ug.edu.gh 3.2 Identification of Variables Input and output variables were carefully identified to measure the performance of each enterprise. Input variables identified include seed for planting, fertilizer, fungicides, insecticides, weedicides, land, labour, and baskets used by the farmer per acre of land. Output variables include total quantity o f produce from each enterprise and the price. Total quantity of fresh okro produced is made up o f quantities sold, given out as gifts, and that consumed by farmer and family. Total quantity o f seed okro produced is made up of quantities sold, given out as gifts, and quantities used as seeds by fanner for planting. Labour activities identified in the production o f fresh okro and seed okro include ploughing, harrowing, seeding (seed planting), irrigating, weeding, fungicide application, weedicide application, insecticide application, and shelling of dry fruits. 3.3 Method of Data Analysis Average cost and average returns per acre o f each enterprise were estimated for each farm size from the data collected. These results were then used to estimate total cost and total returns associated with the whole enterprise separately. In this study, the farm budget procedure was adopted to estimate the profitability o f each enterprise separately. The first specific objective, which is to estimate the cost of fresh and seed okro production was achieved by adding total variable cost to the total fixed cost o f production in each enterprise separately. Total cost (TC) o f production is the sum o f total variable cost (TVC) and total fixed cost (TFC). 20 University of Ghana http://ugspace.ug.edu.gh Variable costs comprise cost of all inputs that vary with the level of output in the short run, and are consumed in the production season. Variable inputs in irrigated agriculture include seeds, fertilizer (N. P. K., sulphate o f ammonia, potassium nitrate), cymethoate, karate, Dithane M45, labour, hiring o f knapsack sprayer and tractor. Cost o f variable inputs, were valued at the prices farmers paid for the adoption o f these inputs, that is, at market prices. The actual quantities o f inputs used in the production process were used to compute the total cost o f the input and not the total quantity o f input purchased. The sum of all the costs of these variable inputs gave the total variable cost o f production. This was estimated separately for each farmer and enterprise. For a farmer, variable cost o f production per unit area was estimated by dividing the variable cost by the area under cultivation. Fixed costs comprise cost of all inputs that do not vary with the level o f output or production in the short run. Fixed inputs identified in the study include land, hoes, irrigation water, baskets, and cutlasses. In the study, irrigation water is treated as a fixed cost item because at Kpando Torkor, farmers are charged a fixed amount for water supplied during the whole production period. Fixed cost was estimated in terms o f the value o f the fixed input used, during a single production period, that is, the sum of the depreciated value o f the input over time. The straight-line method was used to account for the value o f fixed assets such as cutlass and hoe. This method spreads the cost o f a fixed asset in equal amounts over the economic period o f usage. It is expressed as: D = (OC - SV) / N Where, D = value of depreciation. 21 University of Ghana http://ugspace.ug.edu.gh OC = ori ginal cost o f asset. SV = salvage value N = expected lifespan of asset. The salvage value is assumed to be zero since traditional farmers hardly sell or use the farm tool for other economic purposes after its economic life. The expected life o f the assets is assumed to be two years for a cutlass or a hoe. The annual depreciation o f the assets was evaluated and added to cost o f irrigation and land (rent) to get the total fixed cost. For a farmer, fixed cost o f production per unit area was estimated by dividing fixed cost by the area under cultivation. Cost o f production per hectare was estimated as: Cp _ TVC [ TFC A A Where, CP = Cost of production per hectare. TC = Total cost TVC = Total variable cost TFC = Total fixed cost A = Area under cultivation in hectares 22 University of Ghana http://ugspace.ug.edu.gh To estimate the benefits or total revenue (TR) of fresh and seed okro production, the total quantity of produce was multiplied by the unit price. Total quantity o f fresh okro produced was estimated from quantities given out as gifts, fresh fruits consumed at home and quantities sold. The sum o f these was used as the total quantity o f fresh okro produced. Total quantities o f fresh okro produced were recorded in baskets (one basket is approximately equal to 20.0 kg). For a farmer, total revenue per unit area was estimated as: Q* P Where, 77? = - A TR = Total revenue per hectare. Q = Total quantities of fresh okro in baskets. P = Price o f fresh okro in baskets. A = Area under cultivation in hectares. Quantity of seed okro produced was estimated from quantities given out as gifts, seeds used for next season planting and quantity sold. The sum o f these was used as the total quantity o f seed produced. Quantities o f seed okro were recorded in bottles (680 ml beer bottle). Unit price of seed okro, and the total quantity of seed okro produced were used to estimate total revenue o f seed okro. Fresh and seed okro were valued at farm gate price, because retailers usually visited most farmers on the farm and in houses. Retailers buy the produce and send it to the market for sale. For a fanner, total revenue per unit area was estimated as: 0 * P TR = ^ —— A Where, TR = Total revenue per hectare. Q = Total quantities of seed okro in bottles. P = Price of seed okro in bottles. A = Area under cultivation in hectares. 23 University of Ghana http://ugspace.ug.edu.gh 3.4 Comparing Profitability Estimates To compare the profitability of fresh and seed okro production, the net income (profit), the benefit-cost concept, and return on sale concept were used. 3.4.1 Net Income The difference between average revenue and average farm expenses is the average net income of an enterprise. Net income (profit) is given mathematically as: Where, n = Net income per enterprise TR = Total revenue per farmer TFC = Total fixed cost per farmer TVC = Total variable cost per farmer N = number o f fanners (1,2, 3 , . . . N farmers) A given enterprise is accepted if the profit figure estimated is positive; this indicates profit. The enterprise is rejected if the profit figure estimated is negative, and this indicates a loss. The higher the. profit of an enterprise, the better the enterprise. 24 University of Ghana http://ugspace.ug.edu.gh 3.4.2 Benefit-Cost Ratio Benefit-cost ratio was calculated for each enterprise, that is, fresh okro production and seed okro production. Benefit-cost ratio is a discounted measure o f investment or project worth. The ratio was estimated as: Where, B/C = Benefit-Cost ratio B, = average total benefit Ct = average total cost r = opportunity cost o f capital t = time in years (1, 2 ... n) n = fourth and final year o f project If the ratio is greater than one, it means the farmer benefits from the farm enterprise. If the ratio is less than one, then the farmer is not benefiting from the enterprise. If the ratio is equal to one, it means the farmer is at break-even point, where he neither gains nor loses. 25 University of Ghana http://ugspace.ug.edu.gh 3.4.3 Return on Sale Comparison of profitability of the two enterprises was also addressed by using return on sales. Return on sale (ROS) is given as: ROS = n/ATR 17= Net income per hectare of an enterprise ATR = Average total revenue per hectare of an enterprise Return on sales shows how large an operating margin, the enterprise has on sales. An enterprise having a low return on sales implies that, greater quantity of the commodity or produce from the enterprise must be sold to make an adequate return on investment. High return on sales of an enterprise indicates larger operating margin of the enterprise per unit o f sales, and therefore the more attractive the investment. 3.5 Sensitivity Analysis Sensitivity analysis takes care o f risks and uncertainties about the conclusions drawn on the acceptability of okro enterprise under unfavourable conditions. Cost projections are inevitably subject to high degree o f uncertainty about what will actually happen. Unfavourable climatic conditions, pests and diseases can result in low yield of okro. Low yield and low price o f okro fruits can result in low benefit in okro production. Okro farmers may borrow from the bank to invest in okro production. A substantial increase in interest rate can erode earnings from the enterprise. A reworking of the analysis was carried out to see what happens when interest rate, revenue, and cost changes for fresh and seed okro. The sensitivity University of Ghana http://ugspace.ug.edu.gh analysis was therefore undertaken to determine the effect o f the following on the profitability of both fresh and seed okro enterprises: 1. A 10% reduction in total revenue in both fresh and seed okro production. 2. A 10% increase in total cost in both fresh and seed okro production. 3. A 50% increase in interest rate. 3.6 Statistical Test The mean was used as a measure o f central tendency. In this study, measures o f dispersion used include variance, standard deviation, and coefficient o f variation. Coefficient o f variation is used to measure the relative variability o f the data set. The measures o f central tendency and dispersion were used together because the picture of variability o f a data set is given by the two measures more than the use o f the central tendency alone. The mean values o f average cost, total revenue, and net revenue of fresh and seed okro production were compared using the t-distribution to test for difference between means. 3.6.1 Measures of Variability The coefficient o f variation was used to assess variability o f the data sets o f seed and fresh okro production. It was computed separately for the components o f fixed and variable cost for each o f the enterprises. Coefficient o f variation (CV) is estimated as: 27 University of Ghana http://ugspace.ug.edu.gh Where. SD = Sample standard deviation. X = Sample mean. A higher value of coefficient o f variation implies that there is a higher relative variability, and a lower value o f coefficient o f variation implies that there is a lower relative variability. 3.6.2 Test of Hypothesis The following null hypotheses (H0) were tested against their corresponding alternate hypotheses (Hi): i. Ho : The mean total costs o f fresh and seed okro production are not different. Hi : The mean total costs o f fresh and seed okro production are different. ii. Ho: The mean total revenue o f fresh and seed okro are not different. H] : The mean total revenue o f fresh and seed okro are different. iii Ho : The mean net revenue of fresh okro production is equal to that of seed okro production. Hi : The mean net revenue of fresh okro production is less than that o f seed okro production. 28 University of Ghana http://ugspace.ug.edu.gh A simple t-test was used to test for the differences in mean value of average total cost, average total revenue, and net revenue for fresh and seed okro production. The value o f the test statistic for Xi - X2 was computed as: Where, m and ri2 = Sample size o f fresh and seed okro respectively. Xi = Sample means o f average total cost or average total revenue or net revenue for fresh okro enterprise. X2 = Sample means o f average total cost or average total revenue or net revenue for seed okro enterprise. 51 = Sample standard deviation of average total cost or average total revenue or net revenue for fresh okro enterprise. 52 = Sample standard deviation of average total cost or average total revenue for or net revenue seed okro enterprise. [ { x x- x 2) - { u x- u 2)\ t computed («, ~ l ) j ,2 + ( » 2 - l ) j 2 k, + n, - 2 29 University of Ghana http://ugspace.ug.edu.gh U, = Population means o f average total cost or average total revenue or net revenue for fresh okro enterprise. U2 = Population means o f average total cost or average total revenue or net revenue for seed okro enterprise. The values of Ut - U2 were substituted from the null hypotheses (Ho). 3.7 Data Sources The prices and quantities o f inputs used were obtained from the fanners. Data to estimate cost and revenue were obtained through the use o f structured questionnaires. Where necessary, similar data was obtained from dealers in okro inputs. This was done to check the accuracy o f information or data obtained from the farmers. Where large differences existed, the suppliers’ figures or data was used for input cost, whiles farmers’ figures were used for output. 3.8 The Survey A structured questionnaire was used for the survey. Disorganization o f fanners thought was avoided by carefully arranging the questions. A list was prepared for all fresh okro farmers and seed okro farmers. A farmer was randomly selected from the first four names through balloting. Every third name on the list was subsequently selected and interviewed. A total of 90 farmers, 30 for each enterprise, were selected for interviewing, constituting about 48 percent o f the entire population. 30 University of Ghana http://ugspace.ug.edu.gh CHAPTER FOUR RESULTS AND DISCUSSION 4.1 Introduction This chapter is aimed at presenting and analyzing the results o f the study. It begins by discussing plot size and total cost estimates for both fresh and seed okro production in the two seasons, that is, rainy season and dry season production. It includes the analysis o f fixed cost and variable cost o f both enterprises. It continues by analyzing the total revenue and net revenue estimates derived from the production o f fresh and seed okro. Results on profitability estimates are also presented and discussed. The chapter ends by discussing problems facing the production of fresh and seed okro. Fresh okro fruits and seed okro are the major reasons for producing okro by different farmers in the study area in the rainy season, but in the dxy season the major reason for producing okro is for the fresh immature fruits. Costs and revenue estimates o f fresh immature okro fruits and seed okro production in the same season were therefore compared. 4.2 Plot Size per Farmer by Enterprise A summary o f mean plot size by enterprise is presented in Table 4.0. Among the enterprises, mean plot size for seed okro is the lowest at 0.3 hectares. This is followed by fresh okro production in the rainy season, which registered a mean plot size o f 0.5. Fresh okro production in the dry season registered a mean plot size o f 0.6. This implies that farmers produce seed okro on a smaller size o f plot as compared to fresh okro production. Mean plot sizes for individual fresh okro farmers in the rainy season ranged from 0.3 to 0.6, with a coefficient o f variation of 21.81%. Plot sizes for 31 University of Ghana http://ugspace.ug.edu.gh individual seed okro farmers in the same season ranged from 0.2 to 0.4, with a coefficient of variation of 28.72%. This implies that the data set for seed okro production showed variability more than the data set for fresh okro in the same season. Plot sizes for individual fresh okro farmers in the dry season on the other hand ranged from 0.3 to 0.8, with a coefficient o f variation of 27.69%. Table 4.0 Mean Plot Size by Enterprise Rainy Season Dry Season Fresh Okro Plot Size (Ha) Seed Okro Plot Size (Ha) Fresh Okro Plot Size (Ha) Mean 0.5 Mean 0.3 Mean 0.6 C Var. 0.2181 C Var. 0.2872 C Var. 0.2769 Min. 0.3 Min, 0.2 Min. 0.3 Max. 0.6 Max. 0.4 Max. 0.8 Source: Appendix 1 4.3 Fixed Cost Estimates of Okro Production The summary of fixed cost estimates for fresh and seed okro production in the rainy and dry seasons is presented in Table 4.1. The Table showed that total fixed costs for individual fresh okro farmers ranged from 00.37 million to 00.71 million in the rainy season, with a mean o f 00.61 million. Total fixed costs for individual seed okro farmers in the same season, on the other hand ranged from 00.62 million to 00.78 million, with a mean o f 00.68 million. Further analysis reveals that the total fixed cost represents 11.87 percent of the total cost of producing fresh okro fruit in the rainy season and 12.43 percent for seed okro production. The close relationship o f the figures is due to the fact that the tools and equipment used for the production o f fresh and seed okro are almost the same in the study area. Therefore any intervention to reduce total fixed cost o f producing fresh okro could be applied to seed okro production, in order to increase farmer’s net income. 32 University of Ghana http://ugspace.ug.edu.gh Table 4.1 Fixed Cost Estimates Per Hectare of Fresh and Seed Okro Production Cost Items Rainy Season Dry Season Fresh Okro (0*000,000) Seed Okro (0’OOO,OOO) Fresh Okro (0’OOO,OOO) Rent: Mean 0.16 0.16 0.16 Coeff. of Variation 0 0 0 Min. . - - Max. - - - Depreciation: Mean 0.45 0.53 0.43 Coeff. of Variation 0.1309 0.0962 0.1358 Min. 0.22 0.46 0.36 Max 0.55 0.63 0.65 Irrigation: Mean 0.20 flat Coeff. of Variation - - 0 Min. - - 0.20 Max - - 0.20 Total: Mean 0.61 0.68 0.78 Coeff. of Variation 0.0973 0.0742 0.0741 Min. 0.37 0.62 0.72 Max 0.71 0.78 1.01 Source: Appendices 3, 4, and 5. The coefficient of variation for fresh okro production is 9.73 percent compared with a coefficient o f variation o f 7.42 percent for seed okro production. Since the coefficient of variation o f total fixed cost for seed okro production has a lower value than the coefficient o f variation o f total fixed cost for fresh okro production, total fixed cost for seed okro production has a lower relative spread than total fixed cost o f fresh okro production. The study revealed that, dry season okro production is focused on fresh okro fruit production. Total fixed costs of individual fresh okro fruit fanners in the dry season ranged from 00.72 million to 01.01 million, with a mean o f 00.78 million, and a coefficient o f variation of 7.41 percent. Total fixed cost is about 13.73 percent o f the total cost. 33 University of Ghana http://ugspace.ug.edu.gh 4.3 Variable Cost Estimates of Okro Production Variable costs vary with changes in output, and it is a very important component to consider in making production decisions. A summary o f total variable cost estimates for fresh okro fruit and seed okro production are presented in Table 4.2. Table 4.2 Variable Cost Estimates Per Hectare for Fresh and Seed Okro Cost Item Rainy Season Dry Season Fresh Okro (£’000,000) Seed Okro (£’000,000) Fresh Okro (£’000,000) Labour: Mean 2.37 3.14 3.27 Coeff. o f Variation 0.0460 0.2154 0.1975 Min. 2.26 2.25 2.27 Max 2.64 4.98 6.42 Fertilizer: Mean 0.40 0.44 0.45 Coeff. of Variation 0.1599 0.0649 0.1568 Min. 0.24 0.39 0.13 Max 0.51 0.50 0.55 Agro-chemical: Mean 0.70 0.72 0.71 Coeff. of Variation 0.0608 0.0319 0.1358 Min. 0.57 0.68 0.25 Max 0.75 0.79 0.78 Planting material: Mean 0.35 0.38 0.35 Coeff. of Variation 0.1023 0.0529 0.2019 Min. 0.28 0.29 0.03 Max 0.40 0.41 0.47 Transport: Mean 0.11 0.12 0.12 Coeff. of Variation 0.1592 0.1189 0.1689 Min. 0.08 0.09 0.09 Max 0.15 0.14 0.18 Total variable cost: Mean 4.53 4.79 4.90 Coeff. of Variation 0.0355 0.1433 0.1389 Min. 4.15 3.74 3.68 Max 4.86 6.62 8.03 Source: Appendices 6, 7, and 8. The total variable cost per hectare o f fresh okro production in the rainy season ranged from £4.15 million to £<£4.86 million, with a mean o f 04.53 million and a coefficient 34 University of Ghana http://ugspace.ug.edu.gh of variation of 3.55 percent. Unlike fresh fruit production, total variable cost for seed okro production ranged from 03.74 million to £6.62 million, with a mean of 04.79 and a coefficient of variation o f 14.33 percent. Variable cost accounts for 88.13 percent o f the total cost of fresh okro fruit and 87.57 percent for seed okro production in the rainy season. In general, the variable cost of seed okro production is higher than production of fresh okro. This could be due to imputed labour cost associated with threshing dried fruits and drying of seed okro. Total variable cost for dry season fresh okro production ranged from 03.68 million to 08.03 million, with a mean o f 04.89 million and a coefficient o f variation of 13.89 percent. Variable cost accounts for 86.27 percent o f the total cost. About 66.73 percent o f the variable cost is attributed to labour cost. Reduction in labour cost could reduce the variable cost, which will increase net income. 4.4 Total Cost Estimates Total cost of producing fresh and seed okro is presented in Table 4.3. The total cost o f producing fresh okro fruits ranged from 04.52 million to 5.48 million, with a mean total cost o f 5.14 million, whiles total cost o f producing seed okro ranged from 04.42 million to 07.35 million, with a mean total cost o f 5.47 million. The coefficient of variation for fresh okro is 3.80 percent, and that for seed okro is 12.66 percent. This implies that there is higher relative variability in the sample of total cost o f producing seed okro than fresh okro. The critical values o f t for d f = 58 and 0.025 in each tail o f the t-distribution are -2.00 and 2.00. The value o f the test statistics t for Xi - X2 is -2.516. Because the value of the test statistic t = -2.516 falls in the rejection region, the null hypothesis is rejected. Consequently it’s concluded that the mean total cost o f producing fresh and seed okro are different. 35 University of Ghana http://ugspace.ug.edu.gh Table 4.3 Summary of Total Cost Estimates per Hectare (In Million Cedis) Rainy Season Dry Season Fresh Okro Seed Okro Fresh Okro Total Fixed Cost: Mean 0.61 0.68 0.78 Coeff. o f Variation 0.0973 0.0742 0.0741 Min. 0.37 0.62 0.72 Max 0.71 0.78 1.01 Total Variable Cost: Mean 4.53 4.79 4.90 Coeff. of Variation 0.0355 0.1433 0.1389 Min. 4.15 3.74 3.68 Max 4.86 6.62 8.03 Total Cost: Mean 5.14 5.47 5.68 Coeff. o f Variation 0.0380 0.1266 0.1187 Min. 4.52 4.42 4.49 Max 5.48 7.35 8.80 Source: Appendices 9 ,10, and 11. The higher cost o f seed okro production as compared to the fresh okro could be due to labour costs associated with threshing of dried fruits, drying o f seeds and purchase o f 680 ml beer bottle. These activities are not undertaken in fresh okro production. 4.5 Total Revenue Estimates of Okro Production Total revenue for fresh okro fruit ranged from 05.30 million to 08.40 million (see Table 4.4), with a mean o f 06.67 million and coefficient o f variation o f 12.70 percent for the sample. Unlike fresh okro, seed okro registered a range o f total revenue from 06.70 million to 09.55 million, with a mean o f 08.30 million. The coefficient of variation for the sample is 7.25 percent. The total revenue for seed okro production is about 01.63 million higher than that o f fresh okro fruits production. This could be due to price variability o f fresh and seed 36 University of Ghana http://ugspace.ug.edu.gh okro over the same period of study. The critical values o f t for d f = 58 and 0.005 in each tail o f the t-distribution are -2.66 and 2.66. The value of the test statistics t for X| - X2 is -8.581. Because the value o f the test statistic t = -8.581 falls in the rejection region, the null hypothesis is rejected. Consequently it’s concluded that the mean total revenue of fresh and seed okro are different. Table 4.4 Mean Total Revenue per Hectare of Fresh and Seed Okro Production (In Million Cedis)_______________ ______________________________________ ________ Rainy Season Dry Season Fresh Okro Seed Okro Fresh Okro Total Revenue: Mean 6.67 8.30 10.41 Coeff. o f Variation 0.1270 0.0725 0.1121 Min. 5.30 6.70 8.13 Max 8.40 9.55 11.75 Total Cost: Mean 5.14 5.47 5.68 Coeff. of Variation 0.0380 0.1266 0.1187 Min. 4.52 4.42 4.49 Max 5.48 7.35 8.80 Net Revenue: Mean 1.53 2.82 4.73 Coeff. of Variation 0.5776 0.3529 0.2949 Min. 2.19 0.73 1.72 Max 3.41 5.05 6.39 Source: Appendices 12, 13, 14, 15, 16 and 17. There is a higher relative variability in the total revenues o f fresh okro as compared to seed okro. Total revenue for dry season fresh okro production ranged from (48.13 million to 011.75 million, with a mean of £ 10.41 million, and a coefficient o f variation of 11.21 percent. The high total revenue derived from dry season fresh okro production could be due to high price o f the produce. A basket o f fresh okro was sold for 060,000.00 in the dry season. This high price could be due to demand exceeding supply of fresh okro in the study area. 37 University of Ghana http://ugspace.ug.edu.gh 4.6 Net Revenue Estimates Net revenue per hectare o f fresh and seed okro production is presented in Table 4.4. The net revenue for fresh okro ranged from £2.19 million to £3.41 million, with a mean of £1.53 million, but net revenue for seed okro ranged from £0.73 million to £5.05 million, with a mean of £2.82 million. The coefficient o f variation o f fresh okro is higher, 57.76 percent, than seed okro with a coefficient o f variation o f 35.29 percent. The critical values of t for d f = 58 of the t-distribution is -2.392. The value of the test statistics t for Xi - X2 is -5.304. Because the value o f the test statistic t = -5.304 falls in the rejection region, the null hypothesis is rejected. Consequently it’s concluded that the mean net revenue o f seed okro production is higher than that of fresh okro production. Although total cost for seed okro production was higher than fresh okro, net revenue for seed okro is high. This is due to the high total revenue from the production o f seed okro. Net revenue o f dry season fresh okro enterprise ranged from £1.72 million to £6.39 million, with a mean o f £4.73 million / ha and a coefficient o f variation o f 29.49 . percent. Further analysis revealed that the returns from dry season fresh okro fruits production (£4.73 million / ha) are higher than that o f rainy season fresh okro fruit production, which is £1.53 million / ha. Okro fanners in the area could expand their farm for the production of fresh okro in the dry season as an attempt to raise their net income. A leguminous crop such as groundnut or cowpea could be cultivated in the rainy season and fresh okro also cultivated in the dry season in a rotation system on the same piece of land. This system will raise the fertility o f the soil and reduce total cost o f fertilizer application. Net revenue to the dry season okro farmer could be raised in this system. 38 University of Ghana http://ugspace.ug.edu.gh 4.7 Benefit-Cost Ratio Benefit-cost ratio was calculated for each enterprise, that is fresh okro fruits production, and seed okro production in the rainy season as well as dry season fresh okro fruit production. The ratio was estimated as: B / C = benefit-cost ratio. B,= average benefit. C, = average cost. r = discount factor, t = time in years. 4.7.1 Discounted Cash Flow The financial cash flow was discounted at the opportunity cost o f capital and projected in Table 4.5. The farmers used their own resources as a source o f capital invested in the 2001-growing season. The rate o f return on equity capital was assumed to be the opportunity cost of investing their money in 91-day Treasury bill. The interest rate on a 91-day Treasuiy bill for the period was 29.7 percent. The cash flow was therefore discounted at 29.7 percent. The benefit-cost ratio for rainy season fresh okro production is 1.33. 1.33 is greater than one by 0.33. This implies that in real terms, every cedi invested in the production of fresh okro fruits would yield an average return of 0.33 of a cedi in the end. The benefit-cost ratio for rainy season seed okro production is 1.38. 1.38 is greater than one by 0.38. This implies that in real N Where, 39 University of Ghana http://ugspace.ug.edu.gh terms, every cedi invested in the production of seed okro fruits would yield an average return of 0.38 of a cedi in the end. Further analysis revealed that 1.38 is greater than 1.33 by 0.05. This implies that in real terms, every cedi invested in both enterprises (fresh orkro and seed okro enterprises) in the rainy season, seed okro would yield an average return of 0.05 o f a cedi higher than what fresh okro would yield at the end. The benefit-cost ratio for dry season fresh okro production is 1.80. 1.80 is greater than one by 0.80. This implies that in real terms, every cedi invested in the production of fresh okro fruits would yield an average return of 0.80 of a cedi in the end. Dry season production o f fresh okro is higher (0.47) than rainy season fresh okro fruit production. This implies that a cedi invested in the production of fresh okro in the rainy or dry season, dry season fresh okro fruits production would yield 0.47, higher than rainy season fresh okro fruit production in the end. Table 4.5 The Financial Cash Flow (£’000,000) Season Enterprise Year Benefits Costs Discount at factor 29.7% Present worth benefits Present worth costs Rainy season Fresh okro 2001 6.67 5.00 0.7710 5.142600 3.8550 2002 6.67 5.00 0.5945 3.965315 2.9725 2003 6.67 5.00 0.4583 3.056861 2.2915 2004 6.67 5.00 0.3534 2.357178 1.7670 Total 14.521920 10.8860 Seed okro 2001 8.30 6.01 0.7710 6.39930 4.63371 2002 8.30 6.01 0.5945 4.93435 3.572945 2003 8.30 6.01 0.4583 3.80389 2.754383 2004 8.30 6.01 0.3534 2.93322 2.123934 Total 18.07076 13.08497 Dry season Fresh okro 2001 10.41 5.77 0.7710 8.026110 4.44867 2002 10.41 5.77 0.5945 6.188745 3.430265 2003 10.41 5.77 0.4583 4.770903 2.644391 2004 10.41 5.77 0.3534 3.678894 2.039118 Total 22.66465 12.56244 Source: Appendices 17 and 18. 40 University of Ghana http://ugspace.ug.edu.gh Table 4.6 Benefit-Cost Ratio of Fresh and Seed Okro Production Type o f Season Rainy Season Dry Season Type of Enterprise Fresh Okro Fruit Seed Okro Fresh Okro Fruit Total present worth benefit (B) 14.521920 18.07076 22.66465 Total present worth cost (C) 10.8860 13.08497 12.56244 Benefit-cost Ratio (B /C ) 1.33 1.38 1.80 Source: Computed from Table 4.5. 4.8 Return on Sale Return on sale (ROS) for rainy season fresh okro production was estimated as: y N R ROS = N Where, NR = Net revenue per farmer. TR = Total revenue per farmer. N = Number o f fanners The summary of return on sale for the enterprises is presented in Table 4.5. Return on sale for fresh okro fruit is 0.23, and that for seed okro is 0.34. High return on sale of an enterprise indicates larger operating margin of the enterprise per unit sales, and therefore the more attractive the investment in such an enterprise. This implies that investment in seed okro production could be more attractive than investment in fresh okro fruits production. 41 University of Ghana http://ugspace.ug.edu.gh Table 4.7 Summary of Enterprise Return on Sale Type of Season Rainy Season Dry Season Type of Enterprise Fresh Okro Fruit Seed Okro Fresh Okro Fruit Net Revenue (NR) 1.53 2.82 4.73 Total Revenue (TR) 6.67 8.30 10.41 Return on Sale (NR /TR) 0.23 0.34 0.45 Source: Table 4.4 Return on sale for dry season fresh okro fruit production is 0.45. This also implies that operating margin o f the enterprise per unit sales is high. Investment in this enterprise could be attractive. 4.9 Sensitivity Analysis Sensitivity analysis takes care of risks and uncertainties about the conclusions drawn on the acceptability of the enterprise. The initial conditions in costs and benefits estimates were used in the projections. Summary o f result on sensitivity analysis is presented in Tables 4.7,4.8, 4.9, and Table 4.10. Under unfavourable conditions, such as a 10 percent increase in costs, the benefit-cost ratio for fresh okro is 1.21 (see Table 4.11). 1.21 is greater than one (1.00) by 0.21. This implies that a cedi invested in the production o f fresh okro in the rainy season will yield 0.21 over costs. The benefit-cost ratio for seed okro at the same 10 percent increase in costs is 1.26. The benefit-cost ratio for fresh okro reduced by 0.12 and that for seed okro reduced by 0.13 as a result o f a 10 percent increase in costs. This implies that the production of seed okro is more sensitive to an increase in cost than fresh okro production. 42 University of Ghana http://ugspace.ug.edu.gh The benefit-cost ratio for fresh okro as a result of a 10 percent reduction in revenue is 1.20, and that for seed okro is 1.24. This indicates the acceptability of both fresh and seed okro production. It implies that a cedi invested in the production o f fresh okro will yield 0.20 over costs at the end. On' the other hand a cedi invested in the production o f seed okro will yield 0.24 over costs at the end. Further analysis revealed that the benefit-cost ratio o f a 10 percent increase in costs for fresh okro is 1.21, and that of a 10 percent reduction in benefits is 1.20. Again, the benefit-cost ratio o f a 10 percent increase in costs for seed okro is 1.26, and that o f a 10 percent reduction in revenue is 1.24. In both cases, the ratio is lower at 10 percent reduction in benefits than at a 10 percent increase in costs. This implies that the production o f fresh and seed okro are more sensitive to a reduction in benefits more than an increase in costs. The benefit-cost ratio o f a 50 percent increase in discount factor for fresh okro and seed okro in the rainy season are 1.33 and 1.38 respectively. It is 1.80 for fresh okro in the diy season. This implies that a cedi invested in the production o f fresh and seed okro in the rainy season will yield 0.33 and 0.38 respectively, dry season fresh okro production will yield 0.80 at the end. Considering fresh okro production in the dry season, a 10 percent increase in costs, a 10 percent reduction in benefits and a 50 percent increase in discount factor, resulted in a benefit-cost ratio o f 1.55, 1.62, and 1.80 respectively. This implies that an increase in costs is more sensitive to the production of fresh okro than a reduction in benefits. The least sensitive factor is an increase in discount factor. Farmers can therefore borrow from the banks to expand their farms. This will in turn increase their profit margin at the end. More attention should be paid to general sanitation and the use o f high yielding variety in an attempt to increase the benefits derived from the production o f both fresh and seed okro. 43 University of Ghana http://ugspace.ug.edu.gh Table 4.8 Sensitivity analysis at a 10% Increase in Costs Season Enterprise Year Benefits Costs Discount factor at 29.7% Present worth benefits Present worth costs Rainy season Fresh okro 2001 6.67 5.50 0.7710 5.14257 4.24050 2002 6.67 5.50 0.5945 3.96532 3.26975 2003 6.67 5.50 0.4583 3.05686 2.52065 2004 6.67 5.50 0.3534 2.35718 1.94370 Total 14.5219 11.9746 Seed okro 2001 8.30 6.61 0.7710 6.39930 5.09631 2002 8.30 6.61 0.5945 4.93435 3.92965 2003 8.30 6.61 0.4583 3.80389 3.02936 2004 8.30 6.61 0.3534 2.93322 2.33597 Total 18.0708 14.3913 Dry season Fresh okro 2001 10.41 6.73 0.7710 8.02611 5.18883 2002 10.41 6.73 0.5945 6.18875 4.00099 2003 10.41 6.73 0.4583 4.77090 3.08436 2004 10.41 6.73 0.3534 3.67889 2.37838 Total 22.6647 14.6526 Source: Computed from Table 4.5 Table 4.9 Sensitivity analysis at a 10% Reduction in Benefits Season Enterprise Year Benefits Costs Discount factor at 29.7% Present worth benefits Present worth costs Rainy season Fresh okro 2001 6.00 5.00 0.7710 4.626 3.8550 2002 6.00 5.00 0.5945 3.567 2.9725 2003 6.00 5.00 0.4583 2.7498 2.2915 2004 6.00 5.00 0.3534 2.1204 1.767 Total 13.0632 10.886 Seed okro 2001 7.47 6.01 0.7710 5.75937 4.63371 2002 7.47 6.01 0.5945 4.44092 3.57295 2003 7.47 6.01 0.4583 3.4235 2.75438 2004 7.47 6.01 0.3534 2.6399 2.12393 Total 16.2637 13.085 Dry season Fresh okro 2001 9.37 5.77 0.7710 7.22427 4.44867 2002 9.37 5.77 0.5945 5.57047 3.43027 2003 9.37 5.77 0.4583 4.29427 2.64439 2004 9.37 5.77 0.3534 3.31136 2.03912 Total 20.4004 12.5624 Source: Computed from Table 4.5 44 University of Ghana http://ugspace.ug.edu.gh Table 4.10 Sensitivity analysis at a 50% Increase in Discount Factor Season Enterprise Year Benefits Costs Discount factor at 44.55% Present worth benefits Present worth costs Rainy season Fresh okro 2001 6.67 5.00 0.6918 4.614306 3.4590 2002 6.67 5.00 0.4786 3.192262 2.3930 2003 6.67 5.00 0.3311 2.208437 1.6555 2004 6.67 5.00 0.229 1.52743 1.1450 Total 11.54244 8.6525 Seed okro 2001 8.30 6.01 0.6918 5.74194 4.157718 2002 8.30 6.01 0.4786 3.97238 2.876386 2003 8.30 6.01 0.3311 2.74813 1.989911 2004 8.30 6.01 0.229 1.9007 1.37629 Total 14.36315 10.40031 Dry season Fresh okro 2001 10.41 5.77 0.6918 7.201638 3.991686 2002 10.41 5.77 0.4786 4.982226 2.761522 2003 10.41 5.77 0.3311 3.446751 1.910447 2004 10.41 5.77 0.229 2.38389 1.32133 Total 18.01451 9.984985 Source: Computed from Table 4.5 Table 4.11 Sensitivity analysis at a 10% Increase in Costs, 10% Reduction in Benefits, and 50% Increase in Discount Factor Simultaneously_______ ______________________ _____ _ Season Enterprise Year Benefits Costs Discount factor at 44.55% Present worth benefits Present worth costs Rainy season Fresh okro 2001 6.00 5.50 0.6918 4.1508 3.8049 2002 6.00 5.50 0.4786 2.8716 2.6323 2003 6.00 5.50 0.3311 1.9866 1.82105 2004 6.00 5.50 0.2290 1.374 1.2595 Total 10.383 9.51775 Seed okro 2001 7.47 6.61 0.6918 5.167746 4.572798 2002 7.47 6.61 0.4786 3.575142 3.163546 2003 7.47 6.61 0.3311 2.473317 2.188571 2004 7.47 6.61 0.2290 1.71063 1.51369 Total 12.92684 11.43861 Dry season Fresh okro 2001 9.37 6.73 0.6918 6.482166 4.655814 2002 9.37 6.73 0.4786 4.484482 3.220978 2003 9.37 6.73 0.3311 3.102407 2.228303- 2004 9.37 6.73 0.2290 2.14573 1.54117 Total 16.21479 11.64627 Source: Computed from Table 4.5 45 University of Ghana http://ugspace.ug.edu.gh Table 4.12 Enterprise Benefit-Cost Ratios Type of Season Rainy Season Dry Season Type of Enterprise Fresh Okro Fruit Seed Okro Fresh Okro Fruit Sensitivity Factor 10% incr. in costs 10% red. in ben. 50% incr. in DF 10% incr. in costs 10% red. in ben. 50% incr. in DF 10% incr. in costs 10% red. in ben. 50% incr. in DF Total present worth benefit (B ) 14.52 13.06 11.54 18.07 16.26 14.36 22.67 20.40 18.02 Total present worth cost (C) 11.98 10.89 8.65 14.39 13.09 10.40 14.65 12.56 9.99 Benefit-cost Ratio (B /C ) 1.21 1.20 1.33 1.26 1.24 1.38 1.55 1.62 1.80 Source: Computed from Tables 4.7,4.8, and 4.9 4.10 Constraints to Okro Production. Figure 4.1 shows constraints faced by okro farmers interviewed in the study area. Pest and disease problems, high cost of agro-chemical, and poor market price are the problems facing the production of okro in the study area. Fig. 4.1 Constraint to Okro Production S Percentage Pest and disease High cost of agro-chemical Poor market price Constraint 46 University of Ghana http://ugspace.ug.edu.gh 4.10.1 Disease and Pest Problem Most farmers interviewed mentioned the nematode problem as the main constraint to production. Nematodes are tiny soil borne worms, which attack and nibble at the roots o f the plant, sucking out nutrients from the roots and thereby causing root malfunction through rot. The effect becomes severe only when there is a prolonged drought. The main symptom observed is wilting and finally dying of crops. Farmers, sometimes wrongly attribute this dying of crops to water shortages. The most problematic nematode in okro is root knot nematode, Meloidogyne spp. The general effect is that the life span o f the crop is reduced especially whenever water supply is limited. Ladybird beetle was found to be a major insect pest in the study area. Okro is attacked by a myriad o f pests, such as Podagrica uniformis, Spodoptera littoralis, and Sylepta doogata. Although there are various ways o f controlling the pest and disease problems, most farmers interviewed adopted the use o f insecticide to control pest on their farms. Other effective ways o f controlling pest and disease problem are by providing unattractive environment for both the larvae and the adult. This could be achieved by making sure that their alternative host plants such as weeds o f the malvaceae and cotton plants do not grow nearby, by clean weeding, and general removal of breeding sites, such as old stubbles. 4.10.2 High Cost of Agro-chemicals Many okro farmers interviewed reported that agro-chemicals are expensive and not readily available. None o f the farmers interviewed used weedicides to control weeds. Weeds were controlled by the use of cutlass or hoe. Agro-chemicals, such as 47 University of Ghana http://ugspace.ug.edu.gh insecticides and fungicides were used to control pest and diseases on the farm. Although, planting trap crops such as Crotalaria spp and African marigold after the growing season can prevent nematode infestations, none of the farmers interviewed used this method to reduce the incidence of nematode infestation on their farms. 4.10.3 Poor market price of produce Farmers in the study area reported that poor or low market price o f okro affected their net income. Obtaining higher price for okro can increase the net income in okro production. A high price is obtained when the bargaining power o f the farmers is good. This could be achieved by group action o f all okro fanners in the area. Price of okro fruits determined in this way is higher than when individual fanners determine price. Many agricultural markets such as marketing o f okro resemble competitive market model. Competitive market assumes that there are so many producers and buyers of a commodity such that interaction o f the sellers and buyers in the market produce one price which an individual seller or buyer cannot change alone. Contract agreement with an agency or individual to sell okro can also help the farmer to reduce price risk. 4.11 Suggested Strategies for Solving the Problems The farmers made both collective and individual effort to solve the above-mentioned problems encountered on their farms. Almost all the farmers, 95.71% used Furadan, a nematicide, to control nematode but were not very successful. As an attempt to minimize nematode infestation, farmers in the study area followed a fellow programme. Only about 37% of the farmers fallowed their plots. According to these farmers, they had this knowledge from the extension agents in the area. The result 48 University of Ghana http://ugspace.ug.edu.gh possibly implies that about 63% o f the farmers do not consciously know that the fallow period is meant to reduce nematode infestation. 3.3% of the farmers suggested the use of neem extract for the control o f pest and diseases on the farm. This also suggest that about 96.7% of the farmers do not know about the efficacy and use of neem extract to control pest and diseases on crops. Farmers suggested assistance from government and non-governmental organizations for the export o f fresh okro. This according to them could increase net income. Studying o f price and market trends may help to stabilize net income by taking advantage o f higher prices o f okro fruits and lower prices o f farm inputs for okro production. Information may be obtained from the District Agricultural Extension Office, District Agricultural Economics Office, by regular visits to traditional markets and other okro farmers in other district or region. Another way to obtain high price is to improve on the quality o f okro produced in the area. It should be noted that although extra cost is incurred, the extra returns makes the extra cost worthwhile. 49 University of Ghana http://ugspace.ug.edu.gh CHAPTER FIVE SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 5.1 Summary The study revealed that total cost associated with the production o f fresh okro is lower (05.14 million / ha) than that (05.47 million / ha) associated with the production o f seed okro in the rainy season. Total revenue was also found to be lower (06.67 million / ha) in fresh okro fruit production than in seed okro production, which is about 08.30 million / ha. Net income for seed okro production was found to be higher (02.82 million / ha) than that for fresh okro production, which is 01.53 million / ha. This implies that the higher cost incurred in the production o f seed okro is adequately rewarded with higher returns. Therefore, despite the higher cost associated with the production o f seed okro it is still more profitable to invest in it than the relatively low cost o f producing fresh okro in the rainy season. The study also revealed that a major reason for producing okro in the dry season is for the fresh and not for seed in the study area. This could be due to demand exceeding supply o f fresh okro in the dry season. Total cost, revenue, and net income for this enterprise are 05.68 million / ha, 010.41 million / ha, and 04.73'million / ha respectively. Sensitivity analysis carried out to take care o f risks and uncertainties revealed that the production o f fresh and seed okro are all profitable under unfavourable conditions such as a 10 percent increase in costs, a 10 percent reduction in benefits, and a 50 percent 50 University of Ghana http://ugspace.ug.edu.gh 5.2 Conclusion On the basis o f the foregoing results, it can be stated that both fresh and seed okro production in the rainy and dry seasons are profitable. It can also be stated that dry season production o f fresh okro is more profitable than production in the rainy season. Again, seed okro production is more profitable than the production o f fresh okro in the same rainy season. Okro farmers could therefore strategically invest more in seed okro production in the rainy season and fresh okro production in the dry season to increase their net income. The success o f this investment could be attributed to pricing o f the products, which is affected by demand and supply o f the products. Demand for fresh okro in the dry season far exceeds supply o f the product. Lack o f well co-ordinated and well- defined marketing rules and practices by majority o f the farmers could be a reason attributed to the inability o f most farmers to make high profits. The study also revealed that 80% o f the people actively involved in okro production are not trained farmers. Knowledge about okro production was gained through practice and experience. Considering their backgrounds, any bad practices are passed on from farm hand to farmhand, without any question. 5.3 Recommendations In the light o f the above findings o f the present study the following recommendations are made: 1. Nematode infestation is a problem in the study area, and it is recoinmended that; increase in discount factor. Further analysis revealed that reduction in benefits is more sensitive than an increase in costs. The least sensitive factor is an increase in interest rate. 51 University of Ghana http://ugspace.ug.edu.gh * There should be intensification o f extension education on planting o f trap crops such as Crotalaria sp and African marigold after the growing season to reduce the incidence o f nematode infestation. ■ As a form o f incentives to okro farmers, the government through the Ministry o f Food and Agriculture, and the Universities should organize seminars and short courses on eradication o f nematode infestation and other pest and diseases problems. This will in the long run improve the skills o f okro farmers. ■ There should be intensification o f extension education on land fallowing. Fallowing is one o f the methods used to reduce the incidence o f nematode and also to improve soil fertility. The problem o f high cost o f agro-chemicals could be reduced by education on the use o f neem extract to control pest. Neem tree was found to be abundant in the area. This implies that access to the leaf or seed, which is mainly used for the preparation o f the extract, is not a problem. Poor market price o f the products, which is one o f the major factors leading to low net revenue could be overcome by studying price trends in the district and region to take advantage o f high price o f okro fruits. The introduction o f exotic varieties for trials and a possible way o f exporting the crop should therefore be considered in the study area. 52 University of Ghana http://ugspace.ug.edu.gh REFERENCES Adjei-Twum, D. C. (1962). The Effects o f Seed treatments on the Germination o f Okra (Hibiscus esculentus) seeds. Diploma in Tropical Agric. Dissertation. University o f Science & Technology, Kumasi Ghana. Amoako, M. G. (1997). Benefit-Cost Analysis o f Fresh Milk Processing at Agricultural Research Station, Nungua. Unpublished B. Sc. Dissertation. Faculty o f Agriculture, University o f Ghana, Legon. Anaglo, J. N. (1990). Yield Reduction Due to Time o f Harvesting Okro (Abelmoschus esculentus), (L) Moench. B. Sc. Dissertation. Faculty o f Agriculture, University o f Ghana, Legon. Armah-Agyeman, G. C. (1990). Evaluation o f Eight Lines o f Okro (Abelmoschus esculentus), (L) Moench, for Yield and other Agronomic Characters. B. Sc. Dissertation, School o f Agriculture, University o f Cape Coast. Arthur, J. D. (1968). “Experience with Farm Management Analysis Technique in Kenya”. East A frica Journal o f Rural Development. No. 1 ,2 : 22 -32 . Asare, S. N. (2000). Cost-Benefit Analysis o f Citrus Production in the Eastern Region o f Ghana: Case o f Okumaning and Nkwantanang in the Kwaebibirem District. M. A. A. Dissertation, Faculty o f Agriculture, University o f Ghana, Legon. Bernard, C. S. and Nix, J. S. (1990). Farm Planning and Control. Cambridge University Press. 257pp Berry, S. K,; Kolra, C. L.; Sehgal, R. C.; Kulkami, S. G. and Sukhvirkour, M. R. S. (1988). Quality Characteristics o f Seed o f Five Okra (Abelmoschus esculentus), (L) Moench), cultivars.,/. Food Science Technology. 25 : 303 - 305. Carl, K. E. and Doyce, C. B. (1982). Research on Agricultural Development in Sub-sahara Africa: Critical survey. Department o f Agricultural Economics, Michigan State University, East Lansing, U. S. A. Charles, C. and Sherf, A. F. (1960). Vegetable D iseases and their Control. The Ronald Press Company. 70pp. Chauchan, K. S. and Bhanderi, Y. M. (1971). Fruit development and germination studies on okro (Abelmoschus esculentus), (L) Moench). India Journal Agric. Science. 1:833pp. Christensen, C. M. (1974). Storage o f cereal grain and their products. American Association o f Cereal Chemist Inc. America. 517pp. 53 University of Ghana http://ugspace.ug.edu.gh Cobley, L. S. and Steele, W. M. (1976). An Introduction to the Botany o f Tropical Crops. 2nd ed. Longman Group Ltd. London. 371pp. Dillion, J. L. and Hardaker, J. B. (1993). Farm management and research for small farmer development. Food and Agriculture o f the United Nations. Djokoto, J. G. (1990). Government Policy and Non Traditional Agricultural Export Earnings. A Dissertation Submitted to the Department o f Agricultural Economics and Farm Manaigement, University o f Ghana. Dzietror, A. (1995). It pays to plant good quality seeds. Legon Agricultural Research and Extension Journal. 4 :1 2 3 -1 24 . Ellis, R. H. and Roberts, E. H. (1980). Toward a rational basis fo r testing seed quality. Seed Production Buttermorths, London, 635pp. Ellis, R. H. and Roberts, E. H. (1982). The quantification o f ageing and survival in orthodox seeds. Seed Science Technology. 9:373 - 409. Ewete, F. K.; Taylor, T. A. and Cheda, H. R. (1980). “Determination o f the period to harvest okra (Abelmoschus esculentus), (L) Moench), for seed” . Ghana Journal Agric.Sc. 1 3 :107 -110 . George, R. A. T. (1985). Vegetable Seed Production. Longman Group UK Ltd. 318pp. Gittinger, J. P. (1982). Economic Analysis o f Agricultural Projects. 2nd ed. John Hopkins University Press, Baltimore and London. Herklots, G. A. C. (1972). Vegetables in South-East Asia. South China Morning Press Ltd., Hong Kong. 144pp. Hill, D. S. and Waller, J. M. (1988). “Pest and diseases o f tropical crops” . Longman Scientific and Technical J. 2:233 -234. Irvine, F. R. (1970). West African Crops. Oxford University Press, London. Johnson, D. T. (1990). The Business o f Farming. A Guide to Farm Business Management in the Tropics. 2nd Ed. MacMillan Pulishers Ltd. Londonand Basingstoke. 87 - 94 pp. Kohle, A. K. and Chavan, V. M. (1969). “Development o f fruits yielding capacity and influence o f fruit maturity on the reproductive and vegetative behaviour o f okra” . India Journal o f Agric. Sc. 37 : 155 - 166. Kozlowski, T. T. (1972). Seed Biology. Academic Press. London. 447pp. 54 University of Ghana http://ugspace.ug.edu.gh Londerback, J. G. and Dominiac, G. F. (1982). Managerial Accounting. 3rd ed. Kent Publishing Company, Bosh Massachsetts. Martin, F. W. and Roberte, R. (1978). Vegetables fo r Hot Humid Tropics. Longman Green and Co. Ltd. London. 346pp. Norman, J. C. (1992). Tropical Vegetable Crops. Arthur H. Stockwell Ltd. Great Britain. 187pp. Ofori, Y. (1997). Benefit-Cost Analysis o f Rabbit Production. Unpublished B. Sc. Dissertation, Department o f Agricultural Economy and Farm Management, University o f Ghana, Legon. Olayemi, J. K. (1974). Cost and Reyums to Cocoa and Alternate Crops in Western N igeria Institute o f Statistics and Economic Research, Legon. Ovenden, A. E. (1981). Cost and Earnings Investigations o f Primary Enterprises. Unpublished B. Sc. Dissertation. Faculty o f Agriculture, University o f Ghana, Legon. Owusu, S. S (1999), Harvesting okro: Appropriate Date for Picking Fruits for Seed. Unpublished B. Sc. Dissertation, Faculty o f Agriculture, University o f Ghana, Legon. Perkins, D. Y.; C. Julian, and S. L. Dallyn (1952). “Influence o f Fruit Maturity on the Vegetative and Reproductive Behaviour o f Okro”. Proc. Am. Soc. Hort. Sc. 60 : 311 -314 Purseglove, J. Y. (1968). Tropical Crops Dicot 2. Longman Green and Co. Ltd., London. 719pp. Purseglove, J. Y. (1986). Tropical Crops Dicot 2. Longman Green and Co. Ltd., London. 562pp. Ramadan, B. R.; Khalifa, A. H. and Aboul-Nasr, M. H. (1997). “Composition o f Okro Seed oil”. Assiut Journal o f Agric. Sc. 28: 153 - 156. Rice, R. P.; Rice, L.W. and Tindall, H. D. (1986). Fruit and Vegetable Reproduction In Africa. The MacMillan Press Ltd. London and Basingstokr. 371pp. Ruthemberg, H. (1968). Small Holder Farming and Small Holder Development in Tanzania: Ten case studies. Munich, West Germany. Salunkhe, D. K. and Desai, B. B. (1986). Postharvest Biotechnology o f Oil Seeds. C. R. C. Press, Inc. 571pp. 55 University of Ghana http://ugspace.ug.edu.gh Sinnadurai, S. (1992). Vegetable Cultivation. Asempa Publishers, Accra, Ghana. 208pp. Thompson, H. C. and Kelly, C. W. (1957). Vegetable Crops. McGraw Hill, London. 611pp. Tindall, H. D. (1968). Commercial Vegetable Growing. Oxford University Press, London, U. K. Tindall, H. D. (1983). Vegetables in the Tropics. The English Language Book Society. MacMillan. 415pp. Sinnadurai, S. (1974). Studies on Ghanaian Okro (Abelmoschus esculentus), (L) Moench), Cultivars. Proc. 11th Biennial Conference. Ghana Science Association, Kumasi. 56 University of Ghana http://ugspace.ug.edu.gh Appendix 1 Sample Questionnaire A. Socioeconomic characteristics of farmers. 1. Name o f farm er ........................................................................................................... 2. Age. [] Below 18. []18 - 35. Q 3 6 -6 0 . []Above 60. 3. Sex. [] Male. [] Female. 4. V illage ................... ........................................................................................................... 5. District.................................................................................................................................... 6. Marital status. [] Single. [] Married. [] Divorced. 7. Extent o f formal education. [] No education. []Primary education. [] M iddle/JSS. []SSS/SS. [JTertiary. l-: . !8. Occupation. A. M ajor....................................... b. M inor........................................................ Number o f children................................................................................................................ Ji. JlnpUt d a ta . lQ. Com plctelhe table below on the annual cost al the farm.level for okro production. Input M ajor (wet) season M inor (dry) season Quantity Unit price Quantity Unit price . Seed Fertilizer Insecticide .. Weedicides Fungicides 11. How much was paid as irrigation charges during a: Maior season................ b. Minor season 12. Fill the table below with the req uired information. Tools Quantity Unit price Total Cutlass Hoe Basket Knapsack sprayer Beer bottle 630 ml Other 57 University of Ghana http://ugspace.ug.edu.gh 13. Complete the table below on activities performed on the okro farm by different family and hired labou r.______________________ _ __________________________ Activities M aior season M inor season Family labour Hired labour Family labour Mired labor r Mont h No. of members No. o f workers hired No. of days wkd Mrs. wkd /day Mont h No. o f members No. o f workers hired No. o f days wkd I It'S, wktl /day Ploughing Harrowing Planting . . . Weedicide appl. Hand- weeding Fertilizer appl. Insecticide appl. Fungicide appl. Harvesting fresh okro Harvesting dried okro Shelling Irrigation 14. What is the size o f your farm under okro cultivation? ..................................................... 15.i. Do you pay rent on the farm you arc cultivating okro on? [] Yes. []No. ii. If yes, how much rent do you pay annually..................................................................... iii. If no, why (tick one of the options below). l.[]owner occupier 2.[]family land 3.[Jollier specify..................................................... 16. i. How much did you spend on transport of inputs to your farm this season?.............. ii. How-much did you spend on your own transporlalion'lo your farm this season? ... C. Output data. 17. a. Fresh okro production. Providb information on quantity of produce sold, given out as gifts, and for home consumption ill the table below for the 2001 production year:---______________________ Quantity of proc uce per acre M ajo r season M inor season Market sales Given out as gift Family consumption Used as seed Market sales G iven out as fii fl Family consumption Used as seed 58 University of Ghana http://ugspace.ug.edu.gh b. Seed okro production. Provide information on quantity o f produce sold, given out as gifts, and for home consumption in the table below for the 2001 production year. Quantity of produce per acre Ma jor season M inor season Market sales Given out as"'si ft Used as seed Market sales Given out as f»ift Used as seed D. M arketing of fresh okro: 18 a. Where do you sell your okro? [JFarm gale. []Local Torkor market. []Kpando market. b. What is the distance between production and sale point? 19. What is the method o f transporting your produce to the market? [JHired truck. []Own vehicle. []Not transported [JOthers specify .................................................................................... 20. How much does it cost you to get to the sale point?.............................................................. E. M arketing of seed okro: 21. Where do you sell your okro? [JFarm gale. QLocal Torkor market. []Outside Torkor. 22. What is the distance between production and sale po in t?.................................................... 23. What is the method o f transporting your produce to the market? f]Hired truck. []Own vehicle. []Not transported [JOthers specify ..................................................................................... 24. How much does it cost you to get to the sale point?.............................................................. F. Problems 25. What four major problems do you have with okro p roduction?................................ 26. How can the problems listed above be so lv ed ? ...................................................................... G. Sources of Finance 27. W hat are your sources o f finance? [] Equity []Bank loan []Moncy lender [JOther (specify) 28. A re you able to pay the loan with interest? [JYcs []No 29. I f No, state reason(s)....................................................................................................................... 59 University of Ghana http://ugspace.ug.edu.gh Append ix 1 PLOT SIZE PER FARMER BY ENTERPRISE Rainv Season Dry Season Fresh Okro Seed Okro Fresh Okro Respondent Plot Size (Ha) Respondent Plot Size (Ha) Respondent Plot Size (Ha) 001 0 .4 031 0 .4 061 0.8 002 0 .4 032 0.2 062 0.4 003 0.3 033 0.3 063 0,7 004 0 .5 034 0.4 064 0.7 005 0.4 035 0.2 065 0 .8 006 0.6 036 0.3 066 0.3 007 0 .5 037 0.3 067 0.6 008 0 .6 038 0.3 068 0 .7 009 0 .5 039 0.2 069 0.7 010 0 .5 040 0.3 070 0 .6 011 0.3 041 0.2 071 0.6 012 0.6 042 0.2 072 0.7 013 0 .5 043 0.3 073 0.6 014 0 .3 044. 0.2 074 0.4 015 0 .3 045 0.2 075 0.4 016 0 .5 046 0.3 076 0 .6 017 0.4 047 0.4 077 0 .4 018 0 .5 048 0.2 078 0.4 019 0 .6 049 0.2 079 o .5 n 020 0 .4 050 0.3 080 0.7 021 0 .4 051 0.4 081 0.8 022 0 .5 052 0.2 082 0.4 023 0 .5 053 0.4 083 0 .4 024 0 .3 054 0.3 084 0.6 025 0 .5 055 0.2 085 0.8 026 0 .4 056 0.2 086 0.7 027 0 .5 057 0.2 087 0 .3 028 0.6 058 0.2 088 0.4 029 0.6 059 0.3 089 0.7 030 0 .4 060 0.4 090 0.7 Total 13.8 Total 8.2 Total 17.4 Mean (X) 0 .46 Mean 0 .27 Mean 0.58 Std. Dev. 0 .1003 Std. Dev. 0 .0785 Std. Dev. 0 .1606 C Var. 0.2181 C Var. 0 .2872 C Var. 0 .2769 Min. 0 .3 Min. 0 .2 Min. 0 .3 Max. 0 .6 Max. 0.4 Max. 0.8 Source: Computed From Field Data 60 University of Ghana http://ugspace.ug.edu.gh Appendix 2 FIXED COST ESTIMATES PER HECTARE ■OR FRESH OKRO FARMERS IN THE Respondent Rent Depreciation Total Fixed Cost 001 0.16 0.45 0.61 002 0.16 0.43 0.59 003 0.16 0.38 0.53 004 0.16 0.46 0.62 005 0.16 0.48 0.60 006 0.16 0.44 0.59 007 0.16 0.49 ■ 0.64 008 0.16 0.55 0.71 009 0.16 0.46 0.61 010 0.16 0.53 0.68 011 0.16 0.45 0.60 012 0.16 0.48 0.63 013 0.16 0.46 0.61 014 0.16 0.53 0.68 015 0.16 0.47 0.63 016 0.16 0.46 0.60 017 0.16 0.45 0.61 018 0.16 0.48 0.64 019 0.16 0.48 0.63 020 0.16 0.38 0.53 021 0.16 0.47 0.63 022 0.16 0.53 0.68 023 0.16 0.47 0.63 024 0.16 0.43 0.58 025 0.16 0.43 0.58 026 0.16 0.46 . 0.62 027 0.16 0.43 0.58 028 0.16 0.48 0.63 029 0.16 0.45 0.61 030 0.16 0.22 0.37 Total 4.80 13.58 18.30 Mean (X) 0.16 0.45 0.61 Std. Dev. (SD) 0 0.06 0.06 C Var. (SD / X) 0 0.1309 0.0973 Min. 0.16 0.22 0.37 Max. 0.16 0.55 0.71 Source: Computed from Field Data University of Ghana http://ugspace.ug.edu.gh Append ix 3 F IX E D C O S T E S T IM A T E S P E R H E C T A R E F O R I N D IV ID U A L S E E D O K R O F A R M E R S IN T H E R A IN Y S E A S O N ( IN M 1 L L 1Q N C E D I S ) __________________ Respondent Rent Depreciation Total Fixed Cost 031 0.16 0.46 0.62 032 0.16 0.50 0.65 033 0.16 0.60 0.76 034 V 0.16 0.50 0.66 035 0.16 0.53 0.69 036 0.16 0.61 0.77 037 0.16 0.47 0.63 038 0.16 0.61 0.77 039 0.16 0.62 0.77 040 0.16 0.54 0.69 041 0.16 0.63 6.78 042 0.16 0.46 0.61 043 0.16 0.60 0.76 044 0.16 0.50 0.65 045 0.16 0.50 0.65 046 0.16 0.58 0.74 047 0.16 0.50 0.65 048 0.16 0.56 0.72 049 0.16 0.47 0.63 050 0.16 0.49 0.64 051 0.16 .0.53 0.68 052 0.16 0.50 0.65 053 0.16 0.50 0.65 054 0.16 0.54 0.69 055 0.16 0.49 0.64 056 0.16 0.51 0.67 057 0.16 0.51 0.66 058 0.16 0.50 0.65 059 0.16 0.52 0.68 060 0.16 0.57 0.73 Total 4.80 15.S4 20.53 Mean (X) 0.16 0.53 0.68 Std. Dev. (SD) 0 0.05 0.05 C Var. (SD/X) 0 0.0962 0.0742 Min. 0.16 0.46 0.62 Max. 0.16 0.63 0.78 Source: Computed from Field Data 62 University of Ghana http://ugspace.ug.edu.gh Append ix 4 F IX E D C O S T E S T IM A T E S P E R H E C T A R E F O R F R E S H O K R O F A R M E R S IN T H E D R Y S E A S O N ( IN M I L L IO N C E D IS ) _____________ _____________ ___________________ Respondent Rent Jrrigalion Charges Depreciation Total Fixed Cost 061 0.16 0.20 0.41 0.76 062 0.16 0.20 0.40 0.76 063 0.16 0.20 0.36 0.72 064 0.16 0.20 0.38 0.74 065 0.16 0.20 0.3.8- 0.74 066 0.16 0.20 0.65 1.01 067 0.16 0.20 0.39 0.75 068 0.16 0.20 0.46 0.80 069 0.16 0.20 0.40 0.75 070 0.16 0.20 0.38 0.73 071 0.16 0.20 0.46 0.80 072 0.16 0.20 0.38 0.73 073 0.16 0.20 0.53 0.88 074 0.16 0.20 0.38 0.73 075 0.16 0.20 0.46 0.80 076 0.16 0.20 0.39 0.75 077 0.16 0.20 0.53 0.88 078 0.16 0.20 0.41 0.76 079 0.16 0.20 0.40 0.76 080 0.16 0.20 ' 0.43 0.78 081 0.16 0.20 0.42 0.78 082 0.16 0.20 0.43 0.78 083 0.16 0.20 0.46 0.82 084 0.16 0.20 0.43 0.78 085 0.16 0.20 0.39 0.74 086 0.16 0.20 0.43 0.78 087 0.16 0.20 0.45 0.81 088 0.16 0.20 0.46 0.80 089 0.16 0.20 0.45 0.80 090 0.16 0.20 0.44 0.79 Total 4.80 6.00 12.83 23.51 Mean (X) 0.16 0.20 0.43 0.78 Std. Dev. (SD )" 0 0 0.06 0.06 C Var. (SD / X) 0 0 0.1358 0.0740 Min. 0.16 0.20 0.36 0.72 Max. 0.16 0.20 0.65 1.01 Source: Computed from Field Data 63 University of Ghana http://ugspace.ug.edu.gh Append ix 5 V A R I A B L E C O S T E S T IM A T E S P E R H E C T A R E F O R F R E S H O K R O F A R M E R S IN T H E R A IN Y S E A S O N ( IN M IL L IO N C l iD I S ] ^ ________________________ _____ Respondent Labour Fertilizer Agro­ chemical Planting Material Transport Total Variabl e Cost 001 2.30 0.43 0.68 0.35 0.11 4.46 002 2.33 0.49 0.70 0.38 0.11 4.60 003 2.50 0.40 0.75 0.35 0.10 4.63 004 2.28 0.50 0.75 0.40 0.08 4.63 ! 005 2.33 0.51 0.68 0.35 0.12 4.57 006 2.50 0.43 0.68 0.30 0.15 4.69 007 2.33 0.40 0.75 0.40 0.11 4.73 008 2.48 0.43 0.70 0.35 0.11 4.67 009 2.33 0.50 0.68 0.30 0.10 4.59 010 2.63 0.43 0.70 0.40 0.08 4.85 011 2.33 0.42 0.68 0.35 0.12 4.48 012 2.28 0.28 0.75 0.34 0.13 4.38 013 2.33 0.43 0.75 0.35 0.10 4.67 014 2.63 0.45 0.68 0.35' 0.13 4.87 015 2.33 0.26 0.70 0.30 0.09 4.29 016 2.42 0.36 0.70 0.36 0.11 4.57 017 2.33 0.44 0.57 0.28 0.09 4.35 018 2.28 0.36 0.75 [0.30 0.09 4.42 019 2.33 0.42 0.68 0.37- 0.08 4.41 020 2.39 0.44 0.70 0.30 0.11 4.54 021 2.30 0.24 0.70 0.38 0.10 4.39 022 2.64 0.36 0.68 0.30 0.09 4.71 023 2.35 0.40 0.63 0.36 0.12 4.42 024 2.28 0.42 0.75 0.30 0.10 4.42 025 2.34 0.39 0.73 0.40 0.09 4.58 026 2.30 0.38 0.73 0.32 0.09 4.40 027 2.33 0.36 0.75 0.39 0.12 4.55 028 2.34 0.38 0.73 0.37 0.09 4.51 029 2.26 0.36 0.68 0.36 0.11 4.15 030 2.27 0.40 0.65 0.36 0.09 4.40 Total 70.99 12.02 20.99 10.40 3.20 135.87 Mean (X) 2.37 0.40 0.70 0.35 0.11 4.53 Std Dev. (SD) 0.11 0.06 0.04 0.04 0.01 0.16 C Var. (SD / X) 0.0460 0.1599 0.0608 0.1023 0.1592 0.0355 Min. 2.20 0.24 0.57 0.28 0.08 4.15 Max. 2.64 0.51 0.75 0.40 0.15 4.86 Source: Computed from Field Data 04 University of Ghana http://ugspace.ug.edu.gh Append ix 6 THE RAINY SEASON (IN MILLION CEDIS). Respondent Labour Fertilizer Agro­ chemical Planting Material Transport Total Variable Cost 031 2.53 0.42 0.71 0.38 0.11 4.14 032 2.99 0.43 0.73 0.38 0.11 4.63 033 2.78 0.48 0.70 0.36 0.13 4.43 034 2.59 0.43 0.73 0.39 0.10 4.22 035 2.25 0.39 0.70 0.29 0.11 3.74 036 2.46 0.45 0.73 0.40 0.11 4.15 037 3.19 0.43 0.71 0.38 0.10 4.81 038 2.99 0.45 0.72 0.37 0.13 4.66 039 4.20 0.43 0.73 0.39 0.09 5.84 040 3:03 0.41 0.71 0.37. 0.12 4.64 041 2.54 0.45 0.79 0.39 0.10 4.26 042 2.59 0.43 0.74 0.38 0.11 4.25 043 3.88 0.46 0.71 0.41 0.11 5.58 044 2.56 0.48 0.71 0.38 0.09 4.21 045 2.78 0.41 0.73 0.37 0.10 4.39 046 2.63 0.45 0.71 0.39 0.10 4.28 047 4.24 0.40 0.72 0.38 0.13 5.87 048 2.54 0.47 0.71 0.37 0.10 4.18 049 3.11 0.45 0.68 0.39 0.10 4.73 050 3.70 0.43 0.79 0.40 0.13 5.46 051 4.13 0.50 0.71 0.37 0.10 5.79 052 2.75 0.50 0.73 0.38 0.09 4.44 053 4.00 0.44 0.72 0.39 0.11 5.66 054 3.03 0.45 0.73 0.40 0.10 4.70 055 3.11 0.40 0.72 0.39 0.11 4.73 056 3.06 0.39 0.76 0.38 0.11 4.69 057 2.55 0.44 0.71 0.38 0.14 l4.22 058 3.07 0.45 0.72 0.37 0.10 4.71 059 3.90 0.43 0.72 0.38 0.13 5.56 060 4.98 0.46 0.72 0.36 0.11 6.62 Total 94.09 13.18 21.71 11.35 3.27 143.60 Mean (X) 3.14 0.44 0.72 0.39 0.11 4.79 Std. Dev. (SD) 0.68 0.03 0.02 0.02 0.01 0.7 C Var. (S D /X ) 0.2154 0.0649 0.0319 0.0529 0.1189 0.1433 Min. 2.25 0.39 0.68 0.29 0.09 3.74 Max. 4.98 0.50 0.79 0.41 0.14 6.62 Source: Computed from Field Data 65 University of Ghana http://ugspace.ug.edu.gh Append ix 7 Respondent Labour Fertilizer Agro­ chemical Planting Material Transport Total Variable Cost 061 3.38 0.44 0.73 0.35 0.10 4.99 062 3.50 0.43 0.75 0.36 0.10 5.14 063 3.50 0.50 0.73 0.3.8 0.13 5.23 064 3.30 0.43 0.71 0.32 0.12 4.89 065 3.30 0.51 0.75 0.38 0.12 4.96 066 3.00 0.44 0.71 0.38 0.11 4.64 067 3.12 0.45 0.72 0.35 0.10 4.75 068 2.99 0.44 0.71 0.41 0.16 4.70 069 3.00 0.44 0.72 0.312 0.13 4.62 070 3.24 0.46 0.75 0.33 0.12 4.90 071 3.25 0.50 0.72 0.36 0.10 4.96 072 3.25 0.45 0.71 0.33 0.09 4.83 073 3.15 0.42 0.72 0.34 0.12 4.76 074 3.15 0.45 0.75 0.33 0.10 4.78 075 3.15 0.50 0.71 0.34 0.12 4.82 076 3.47 0.55 0.73 0.38 0.10 5.22 077 3.14 0.50 0.78 0.32 0.10 4.83 078 3.26 0.43 0.71 0.35 0.12 4.85 079 3.00 0.45 0.71 0.33 0.14 4.621 080 3.01 0.46 0.72 0.39 0.12 4.69 081 3.20 0.48 0.73 0.38 0.11 4.87 082 6.42 0.42 0.76 0.38 0.10 8.03 083 2.93 0.44 0.72 0.33 0.11 4.24 084 2.75 0.45 0.72 0.47 0.10 4.50 085 3.28 0.47 0.71 0.35 0.13 4.98 086 3.50 0.50 0.75 0.35 0.13 5.19 087 -- 2.27 0.42 0.71 0.33 0.12 3.68 088 3.00 0.51 0.53 0.39 0.10 4.25 089 3.15 0.13 0.25 0.46 0.11 4.58 090 3.50 0.53 0.75 0.42 0.18 5.41 Total 98.07 13.56 21.30 10.50 3.47 146.89 Mean (X) 3.27 0.45 0.71 0.35 0.12 4.50 Std. Dev. (SD) 0.65 0.07 0.25 0.07 0.02 0.68 C Var. (SD / X) 0.1975 0.1568 0.1358 0.2019 0.1688 0.1389 Min. 2.27 0.13 0.25 0.03 0.09 3.68 Max. 6.42 0.55 0.78 0.47 0.18 8.03 Source: Computed from Field Data 66 University of Ghana http://ugspace.ug.edu.gh Append ix 8 T O T A L C O S T E S T IM A T E S P E R H E C T A R E F O R F R E S H O K R O F A R M E R S IN T H E R A IN Y S E A S O N ( IN M I L L IO N C E D I S ) . ____________________ _________________________ Respondent Total Fixed Cost Total Variable Cost Total Cost 001 0.61 4.46 5.07 002 0.59 4.60 5.18 003 0.53 4.63 5.16 004 0.62 4.63 5.24 005 0.59 4.57 5.16 006 0.64 4.69 5.33 007 0.71 4.73 5.44 008 0.61 4.67 5.28 009 0.68 4.59 5.27 010 0.60 4.85 5.45 011 0.63 4.48 5.11 012 0.61 4.38 4.99 013 0.68 4.67 5.34 014 0.63 4.87 5.48 015 0.60 4.29 4.89 016 0.61 4.57 5.17 017 0.64 4.35 4.98 018 0.63 4.42 5.05 019 0.53 4.41 4.94 020 0.63 4!54 5.17 021 0.68 4.39 5.07 022 0.63 4.71 5.33 023 0.58 4.42 5.00 024 0.58 4.42 5.00 025 0.62 4.58 5.20 026 0.58 4.40 4.98 027 0.63 4.55 5.18 028 0.61 4.51 5.12 029 0.37 4.15 4.52 030 0.62 4.40 5.02 Total 18.30 135.87 154.14 Mean (X) 0.61 4.53 5.14 Std. Dev. (SD) 0.06 0.16 0.2 C Var. (SD / X) 0.0973 0.0355 0.0380 Min. 0.37 4.15 4.52 Max. 0.71 4.86 5.48 Source: Computed from Field Data University of Ghana http://ugspace.ug.edu.gh Append ix 9 T O T A L C O S T E S T IM A T E S P E R H E C T A R E F O R S E E D O K R O F A R M E R S IN T H E R A IN Y S E A S O N ( IN M I L L IO N C E D I S ) . ___________________________________________ Respondent Total Fixed Cost Total Variable Cost Total Cost 031 0.62 4.14 4.76 032 0.65 4.63 5.28 033 0.76 4.43 5.19 034 0.66 4.22 4.87 035 0.69 3.74 4.42 036 0.77 4.15 4.92 037 0.63 4.81 5.44 038 0.77 4.66 5.42 039 0.77 5.84 6.61 040 0.69 4.64 5.33 041 0.78 4.26 5.04 042 0.61 4.25 4.87 043 0.76 5.58 6.33 044 0.65 4.21 4.86 045 0.65 4.39 5.04 046 0.74 4.28 5.05 047 0.65 5.87 6.52 048 0.72 4.18 4.90 049 0.63 4.73 5.36 050 0.64 5.46 6.10 051 0.68 5.79 6.47 052 0.65 4.44 5.10 053 0.65 5.66 6.31 054 0.69 4.70 5.40 055 0.64 4.73 5037 056 0.67 4.69 5.36 057 0.66 4.22 4.88 058 0.65 4.71 5.37 059 0.68 5.56 6.24 060 ■0.73 6.62 7.35 Total 20.53 143.60 164.13 Mean (X) 0.68 4.79 5.47 Std. Dev. (SD) 0.05 0.7 0.69 C Var. (SD /X ) 0.0742 0.1433 0.1266 Min. 0.62 3.74 4.42 Max. 0.78 6.62 7.35 Source: Computed from Field Data 08 University of Ghana http://ugspace.ug.edu.gh Append ix 10 T O T A L C O S T E S T IM A T E S P E R H E C T A R E F O R F R E S H O K R O F A R M E R S IN T H E D R Y S E A S O N ( IN M I L L IO N C E D IS ) . Respondent Total Fixed Cost Total Variable Cost Total Cost 061 0.76 4.99 5.75 062 0.76 5.14 5.90 063 0.72 5.23 5.95 064 0.74 4.89 5.62 065 0.74 4.96 5.69 066 1.01 4.64 5.64 067 0.75 4.75 5.49 068 0.80 4.70 5.50 069 0.75 4.62 5.37 070 0.73 4.90 5.63 071 0.80 4.96 5.76 072 0.73 4.83 5.56 073 0.88 4.76 5.64 074 0.73 4.78 5.51 075 0.80 4.82 5.62 076 0.75 5.22 5.98 077 0.88 4.83 5.72 078 0.76 4.85 5.61 079 0.76 4.621 5.38 080 0.78 4.69 5.47 081 0.78 4.87 5.65 082 0.78 8.03 8.81 083 0.82 4.24 5.06 084 0.78 4.50 5.28 085 0.74 4.98 5.72 086 0.78 5.19 5.97 087 0.81 3.68 4.49 088 0.80 4.25 5.05 089 0.80 4.58 5.39 090 0.79 5.41 6.20 Total 23.51 146.89 170.41 Mean (X) 0.78 4.50 5.68 Std. Dev. (SD) 0.06 0.68 0.67 C Var. (SD / X) 0.0741 0.1389 0.1187 Min. 0.72 3.68 4/1 9 Max. 1.01 8.03 8.SO Source: Computed from Field Data 69 University of Ghana http://ugspace.ug.edu.gh Appendix 1 1 T O T A L R E V E N U E E S T IM A T E S P E R H E C T A R E F O R F R E S H O IC RO F A R M E R S IN T H E R A IN Y S E A S O N . ____________________________ _____________ Respondent Quantity of Fresh Okro Produced (In Baskets) Pricc Per Basket (£ ’000) Quantity Used as Seed (in 680 ml bottles) Price Per Bottle (£ ’000) Total Revenue ( f 000,000) 001 165 35 2.5 20 5.83 002 155 45 3.8 20 7.05 003 137.5 45 3.8 20 6.26 • 004 165 40 1.3 20 6.63 005 170 35 3.8 20 6.03 006 160 40 3.8 20 6.48 007 170 35 13 20 5.98 008 165 35 2.5 20 5.83 009 170 45 3.8 20 7.73 010 150 45 1.9 20 6.79 011 175 40 3.8 20 7.08 012 175 35 3.5 20 6.20 013 142.5 40 2.5 20 5.75 014 125 45 3.8 20 5.70 015 175 45 2.5 20 7.93 016 148 40 1.9 20 5.96 017 185 45 3.5 20 8.40 018 198 30 3.8 20 6.02 019 155 35 1.9 20 5.46 020 180 40 3.8 20 7.28 021 135 45 3.8 20 6.15 022 175 35 2.5 20 6.17 023 170 40 1.9 20 6.84 024 165 45 3.8 20 7.50 025 165 45 19 20 7.46 026 175 40 2.5 20 7.05 027 165 45 3 20 7.49 028 194 40 2.5 20 7.81 029 150 35 2.5 20 5.30 030 175 45 4.5 20 7.97 Total 4935 1209.9 88.4 600 200.1 Mean (X) 164.5 40.33 2.94 20 6.67 Std. Dev. (SD) 16.58 4.54 0.90 0 0.85 C Var. (SD / X) 0.1008 0.1125 0.3057 0 0.1270 Min. 125 30 1.3 20 5.30 Max. 198 45 4.5 20 8.40 Source: Computed from Field Data 70 University of Ghana http://ugspace.ug.edu.gh Appendix 12 TOTAL REVENUE ESTIMATES PER HECTARE FOR SEED OKRO FARMERS IN THE RAINY SEASON Respondent Quantity of Fresh Okro Produced (In Baskets) Price Per Basket (jzi’000) Quantity Used as Seed (In Bottles) Price Per Bottle Total Revenue (^ ’000,000) 031 V 50 25 367.5 20 8.60 032 52.5 30 382.5 20 9.23 033 60 25 402.5 20 9.55 034 50 20 352.5 20 8.05 035 52.5 30 395 20 9.48 036 45 35 360 20 8.78 037 40 25 390 20 8.80 038 45 25 352.5 20 8.18 039 37.5 25 340 20 7.74 040 52.5 30 360 20 8.78 041 35 35 340 20 8.03 042 40 25 365 20 8.30 043 45 35 355 20 8.68 044 45 25 345 20 8.03 045 40 20 360 20 8.00 046 50 30 342.5 20 8.35 047 55 25 372.5 20 8.83 048 60 30 320 . 20 8.20 049 45 25 360 20 8.33 050 40 25 350 20 8.00 051 45 25 360 20 8.33 052 50 30 260 20 6.70 053 40 25 320 20 7.40 054 37.5 30 310 20 7.33 055 32.5 25 385 20 8.51 056 45 25 355 20 8.23 057 30 30 375 20 8.40 058 30 25 350 20 7.75 059 40 20 372.5 20 8.25 060 35 25 360 20 8.08 Total 1325.1 804.9 10659.9 600 249 Mean (X) 44.17 26.83 355.33 20 8.30 Std. Dev. (SD) 8.02 4.04 27.81 0 0.60 C Var. (SD / X) 0.1817 0.1507 0.0783 0 0.0724 Min. 30 20 260 20 6.70 Max. 60 35 402.5 20 9.55 Source: Computed from Field Data 71 University of Ghana http://ugspace.ug.edu.gh Appendix 13 TOTAL REVENUE ESTIMATES PER HECTARE FOR FRESH OKRO FARMERS IN i n c j jk x oJc/voL Respondent JIN Quantity of Fresh Okro Produced Price Per Basket Quantity Used as Seed (In Price Per Bottle Total Revenue (^ ’000,000) (In Baskets) U'000) Bottles) 061 180 60 1.3 20 10.83 062 180 60 2.5 20 10.85 063 185 60 2.5 20 11.15 064 190 60 1.3 20 11.43 065 180 60 1.9 20 10.84 066 175 60 2.5 20 10.55 067 185 60 2.5 20 11.15 068 190 60 3.8 20 11.48 069 180 60 1.3 20 10.83 070 190 i_60 2.5 20 11.45 071 195 60 2.5 20 11.75 072 185 60 1.3 20 11.13 073 135 60 1.9 20 8.14 074 180 60 1.9 20 10.84 075 185 60 1.3 20 11.13 076 135 60 3.8 20 8.18 077 185 60 3.8 20 11.17 078 180 60 5.0 20 10.90 079 135 60 1.3 20 8.13 080 180 60 2.5 20 10.85 081 142 60 5.0 20 8.65 082 175 60 1.3 20 10.53 083 180 60 3.8 20 10.88 084 135 60 2.0 20 8.14 085 175 60 2.0 20 10.54 086. 150 60 4.0 20 9.08 087 180 60 2.0 20 10.84 088 190 60 2.0 20 11.44 089 180 60 2.5 20 10.85 090 143 60 2.0 20 8.59 Total 5180.1 1800 75 600 3123 Mean (X) 172.67 60 2.5 20 10.41 Std. Dev. (SD) 19.50 0 1.08 "0 1.17 C Var. (SD / X) 0.1129 0 0.4377 0 0.1121 Min. 135 60 1.3 20 8.13 Max. 190 60 5.0 20 11.75 Source: Computed from Field Data 72 University of Ghana http://ugspace.ug.edu.gh Append ix 14 N E T R E V E N U E E S T IM A T E S P E R H E C T A R E F O R F R E S H O K R O F A R M E R S IN I H E R A I N Y S E A S O N ______________________________________________________________ Respondent Total Revenue (tf’000,000) Total Cost (^ ’000,000) Net Revenue (tf’000,000) 001 5.83 5.07 0.76 002 7.05 5.18 1.87 003 6.26 5.16 1.12 004 6.63 5.24 .1.38 005 6.03 5.16 0.87 006 6.48 5.33 1.15 007 5.98 5.44 0.54 008 5.83 5.28 0.54 009 7.73 5.27 2.45 010 6.79 5.45 1.34 011 7.08 5.11 1.96 012 6.20 4.99 1.21 013 5.75 5.34 0.40 014 5.70 5.48 0.22 015 7.93 4.89 3.04 016 5.96 5.17 0.79 017 8.40 4.98 3.41 018 6.02 5.05 0.96 019 5.46 4.94 0.53 020 7.28 5.17 2.11 021 6.15 5.07 1.08 022 6.17 5.33 0.84 023 6.84 5.00 1.84 024 7.50 5.00 2.50 025 7.46 5.20 2.26 026 7.05 4.98 2.07 027 7.49 5.18 2.30 028 7.81 5.12 2.69 029 5.30 4.52 0.78 030 7.97 5.02 2.94 Total 200.1 154.14 . 45.9 Mean (X) 6.67 5.14 1.53 Std. Dev. (SD) 0.85 0.2 0.88 C Var. (SD / X) 0.1270 0.0380 0.5776 Min. 5.30 4.52 2.19 Max. 8.40 5.48 3.41 Source: Computed from Fie ld Data 73 University of Ghana http://ugspace.ug.edu.gh Appendix 15 N E T R E V E N U E E S T IM A T E S P E R H E C T A R E F O R S E E D O K R O F A R M E R S IN T H E R A IN Y S E A S O N _____________________________________________________________ Respondent Total Revenue Total Cost Net Revenue (^ ’000,000) (0’OOO,OOO) (* ’000.000) 031 8.60 4.76 3.84 032 9.23 5.28 3.94 033 9.55 5.19 4.36 034 8.05 4.87 3.18 035 9.48 4.42 5.05 036 8.78 4.92 3.86 037 8.80 5.44 3.36 038 8.18 5.42 2.75 039 7.74 6.61 1.13 040 8.78 5.33 3.44 041 8.03 5.04 2.98 042 8.30 4.87 3.43 043 8.68 6.33 2.34 044 8.03 4.86 3.16 045 8.00 5.04 2.96 046 8.35 5.05 3.33 047 8.83 6.52 2.31 048 8.20 4.90 3.30 049 8.33 5.36 1 2.96 050 8.00 6.10 1.90 051 8.33 6.47 1.85 052 6.70 5 .10 1.60 053 7.40 6 .3 1 1.09 054 7.33 5.40 1.93 055 8.51 5037 3.14 056 8.23 5.36 2.S7 057 8.40 4.88 3.52 058 7.75 5.37 2.38 059 8.25 6.24 2.01 060 8.08 7.35 0.73 Total 249 164 .13 84.6 Mean (X) 8.30 5.47 2.82 Std. Dev. (SD) 0.60 0.69 1.0 C Var. (SD / X) 0.0724 0 .1266 0.3529 Min. 6.70 4.42 0.73 Max. 9.55 7.35 5.05 Source: Computed from Field Dala University of Ghana http://ugspace.ug.edu.gh NET REVENUE ESTIMATES PER HECTARE F( THE DRY SEA SON _ Appendix 16 Respondent Total Revenue ( f ’000,000) Total Cost (('’000,000) Net Revenue (eS’000,000) ’ 061 10.83 5.75 5.08 062 10.85 5.90 4.95 063 11.15 5.95 5.20 064 11.43 5.62 5.80 065 10.84 5.69 5.14 066 10.55 5.64 4.91 067 11.15 . 5.49 5.66 068 11.48 5.50 5.97 069 10.83 5.37 5.46 070 11.45 5.63 5.82 071 11.75 5.76 5.99 072 11.13 5.56 5.57 073 8.14 5.64 2.50 074 10.84 5.51 5.33 075 11.13 5.62 5.51 076 8.18 5.98 2.20 077 11.17 5.72 5.46 078 10.90 5.61 5.29 079 8.13 5.38 2.75 080 10.85 5.47 5.38 081 8.65 5.65 3.05 082 10.53 8.81 1.72 083 10.88 5.06 5.82 084 8.14 5.28 2.86 085 10.54 5.72 4.82 086 9.08 5.97 3.11 087 10.84 4.49 6.35 088 11.44 5.05 6.39 089 10.85 5.39 5.46 090 8.59 6.20 2.39 Total 312.3 170.41 141.9 Mean (X) 10.41 5.68 4.73 Std. Dev. (SD) 1.17 0.67 1.39 C Var. (SD / X) 0.1121 0.1187 0.2949 Min. 8.13 4.49 1.72 Max. 11.75 8.80 6.39 Source: Computed from Field Data 75 University of Ghana http://ugspace.ug.edu.gh Appendix 17 CAPITAL AND OPERATING COSTS Item Rainy Season Dry Season 1 Fresh Okro (£ ’000,000) Seed Okro (£'000,000) Fresh Okro (£ ’000,000) C ap ita l Costs: Tools & Equipment 0.91 1.06 0.86 Rent 0.16 0.16 0.16 Irrigation Charges - - 0.20 Sub-Total 1.07 1.22 1.22 Operating Costs: P lanting Material 0.35 0.39 0.33 Labour 2.37 3.14 3.27 Fertilizer 0.40 0.44 0.45 Agro-Chemical 0.70 0.72 0.71 Transport 0.11 0.10 0.12 Sub-Total 3.93 4.79 4.88 Total 5.00 6.01 6.00 Source: Computed from Field Data Appendix 18 FINANCIAL BENEFITS FROM SALES Item Rainy Season Dry Season Fresh Okro ($<’000,000) Seed Okro ' (£ ’000,000) Fresh Okro (£ ’000,000) Quantity o f fresh okro produced (baskets per hectare) 164.50 44.17 172.67 Price per basket 0.04 0.03 0.06 Quantity o f seed okro produced (680 m l bottle per hectare) 2.95 355.33 2.47 Price per bottle 0.02 0.02 0.02 Total sales 6.67 8.30 10.41 Source: Computed from Field Data University of Ghana http://ugspace.ug.edu.gh