Journal of
Development and Agricultural Economics

  • Abbreviation: J. Dev. Agric. Econ.
  • Language: English
  • ISSN: 2006-9774
  • DOI: 10.5897/JDAE
  • Start Year: 2009
  • Published Articles: 445

Full Length Research Paper

Cost and returns of soybean production in Assosa Zone of Benishangul Gumuz Region of Ethiopia

Afework Hagos
  • Afework Hagos
  • Ethiopian Institute of Agricultural Research/Assosa Research Center, P. O. Box 265, Assosa, Ethiopia.
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Adam Bekele
  • Adam Bekele
  • Ethiopian Institute of Agricultural Research/Melkasa Research Center, Melkasa, Ethiopia.
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  •  Received: 17 April 2018
  •  Accepted: 16 August 2018
  •  Published: 30 November 2018

Abstract

In Ethiopia, the demand for soybean product is increasing as a result of increasing population growth, agro-processing and urbanization. Research needs to provide farm level evidence that could guide informed production decision-making. This research was conducted to assess costs and patterns of input use and determine the profitability of soybean production in Assosa zone of Benishangul-Gumuz region. Data for the study were collected from 59 randomly selected soybean farmers using a well-structured questionnaire. Descriptive statistics and enterprise budgets are used to analyze the data. Results of the gross margin analysis showed that total gross revenue of Birr 10566.38 ha-1 is generated from sales of soybean grain. The average variable cost incurred is 6634.43 Birr/ha. The gross margin and net-farm income was estimated to be 3931.956 and 3629.956 Birr/ha, respectively. The benefit cost ratio amounted to 1.52 which implies for every Birr incurred in costs, the farmer can expect a benefit of 1.52 Birr. Moreover, the sensitivity analysis indicated that profitability of soybean production is more sensitive to reduction in price than to increases in yield. The study therefore concluded that soybean production in Assosa Zone of Benishangul-Gumuz region is profitable enterprise. It is suggested that consistent government policies that would favor soybean production and market linkage between producers and soybean agro-industries in the area would attract investors and small-scale farmers would gain reasonable economic benefits from soybean production in Assosa zone.

Key words: Soybean, production, profitability, costs, returns, Benishangul-Gumuz.