Evaluation of the Production Efficiency and Profitability of Groundnut Production in Bwari and Gwagwalada Area Councils of Abuja, Nigeria

Abstract— This study assessed the production efficiency and profitability of groundnut farmers in Bwari and Gwagwalada Area Councils of Abuja, Nigeria. Using a multistage sampling technique, 200 respondents were surveyed through structured questionnaires. Descriptive statistics, stochastic frontier production function, and net farm income models were applied for analysis. Results showed that 55.0% of farmers were aged 31–50 years, while 57.55% had 5–15 years of farming experience, reflecting an active and knowledgeable farming population. Education was moderate, with 40.0% having secondary education, and household sizes were large, with 57.5% reporting 6 and above members. The stochastic frontier production function indicated that farm size (0.298, t = 4.14***), seed (0.215, t = 3.16***), and labour (0.176, t = 2.98**) significantly influenced economic efficiency, while fertilizer and capital were not significant. Inefficiency variables indicated that age (–0.112, t = –2.43**), farming experience (–0.158, t = –3.04***), education (–0.092, t = –2.42**), extension contact (–0.185, t = –2.98***), and cooperative membership (–0.132, t = –2.69***) significantly reduced inefficiency, while household size and access to credit were not significant. Profitability analysis confirmed viability, with a gross income of ₦145,500/ha, total cost of ₦52,790.00, and net farm income of ₦92,710.00. The return per naira invested (RNI) was 1.76. Key constraints included high input costs (81.0%), limited credit (74.0%), pest infestation (67.5%), and inadequate extension services (60.0%). Based on the findings, the study recommended the 81.0% of farmers identified high input costs as a major constraint, policies should focus on input subsidies, group purchasing schemes, or improved distribution systems to ensure farmers can access quality seeds, fertilizer, and agrochemicals at lower prices.