PERFORMANCE OF MODERN RICE MILLS IN WESTERN AGRICULTURAL ZONE OF BAUCHI STATE, NIGERIA

Abstract

The study was conducted to assess the performance of modern rice mills in Western Agricultural Zone of Bauchi State. A multi-stage sampling technique was used in selecting 31 modern rice mills in the study area. The data were analyzed using descriptive statistics, inferential statistics and budgetary models. The result revealed that the average years of operation of the mills was 4 years, majority (71%) of the mills were owned by individuals and average number of employees were 15 workers. Also majority (67.7%) of mills engaged in both milling and marketing of rice, 48.4% obtained their capital through personal savings and all (100%) mills rely on electricity as a major source of energy. The result further showed that majority (58.1%) of mills obtain their paddy through marketers. The average working hour per day was 12 hours, average working days per week was 7 days, the average installed capacity was 1.4 tonnes per hour and average paddy milled per day was 4.7 tonnes. The monthly cost and return analysis indicated that variable cost constituted 89.60% of total cost while fixed cost constituted 10.40%. The total revenue (TR), Gross Margin (GM) and Net income (NI) were N15,849,961.28, N6,655,480.64 and N5,588,109.68 per month respectively. The return on Naira invested (ROI) and return on capital invested (ROCI) were N0.72 and N0.54 respectively. Also, years of operation, number of employees and working hours per day were found to influence the gross income of modern rice mills at P<0.001, while installed capacity and type of mill influence mill’s gross income at P<0.05. It was concluded that modern rice mill is a profitable venture in the study area. The study recommended that processors should collectively source credit facilities from formal financial institutions in order to acquire the required working capital. Rice mills should also form associations so that they could demand necessary facilities such as adequate electricity and water supply from concerned authorities in order to improve their performance.